Business & Investment sat down with Alfonso Prada, Managing Director of SENA, talking about the country’s future projects, quality education, and the prospects for employment growth.
The World Bank named Colombia as the most attractive Latin American economy in the “Ease of Doing Business” Index. Fortune also placed it as one of the seven most attractive economies for investment, and the Exim Bank put it in its Top 10 for the trade sector. But it is true that this year, given the global economic situation, there has been a drastic reduction in foreign direct investment. However, President Santos said that we are only facing a cloud. What is your assessment of the Colombian economy during 2015? What are your predictions for the future?
Colombia is growing with the best growth rate in Latin America and we have projected a growth, though some of the economies will grow negatively, or be located barely above 0 or 1%, what we estimate is that we will be above 3, we can even make 4%.
That makes us be perceived as a dynamic, stable, solid economy, with quite strong public political institutions, and that makes us think that things will not change much in maintaining this rate of growth. But, in addition, President Santos has promoted a strong policy of public credit, of international relations, expanding Colombian markets to more than 1,200 million consumers through the signing of the FTAs, which open up a potential market that keeps us in line with growth in exports.
The revaluation itself, the price of the dollar today suits the Colombian economy too much, and particularly some industries. We have to think we have sectors like BPO, growing above 21%, even if the economy grows at of 3%, 4% or 5%.
In the footwear industry, leather goods, some movement can already be felt, and everything will be part of a strategy of changing production programs of the Ministry of Commerce, which together with the Ministry of Labour, the SENA, with the national police, with the DIAN, work as a team to ensure that they have very good conditions to be able to, one way or another, take advantage of the current economic situation in Latin America, the present circumstances in relation to the dollar, the export potential, and obviously, we as SENA, put ourselves in the group of public institutions that will try to exploit the situation despite the adversities.
We know of the invitation from the OECD to Colombia, and that you are expected to become a member in 2017. Minister Cardenas said "we are a very open country, and comply with international standards required by the OECD." What can Colombia’s experience bring to this organization? What can Colombia learn from them?
We both have much to learn. I think we can learn more from the countries with good practices and that’s what this is about. In the sector where SENA is, you have to play hard with the objective measurements that can register the quality of the final product that we produce.
During the past 12 years SENA measurements show how many students or trainees are trained annually in certain areas and what their level of training is. It shows a growth curve throughout the country. The question is, "How many of them are employed? How many of them have created a company?" That's where we connect with the OECD, which suggests good practices, with good measurements, so that the issue is not just coverage, but also the quality of the training and what the best system to improve quality is.
The largest university in Colombia is the National University, which is public, and has 52,000 students, and SENA has 1,200,000. That shows how the training at SENA has economic consequences. If those students are trained with higher quality, this has an impact on the productivity and competitiveness of enterprises and economic growth, and at the end of the day, what mostly interests SENA as part of the labor sector is the impact on employment generation.
With this experience we contribute so that the ways we have been putting together this structure can be studied. Thanks to this structure we will go on for many years, and we’ve had, at least during this administration, an increase in the number of sustained employment, low unemployment, and a goal that should lead us to 8% or less. We incorporated in the Colombian development plan earlier this year the new system of tertiary education, with the qualification framework that will allow a chain of more transparent, democratic and better quality training, and I'm sure at the OECD they will look at this enthusiastically, because I've participated in some debates on education in some countries of the world with institutions which are similar to SENA, and they see clearly the experience of Colombia in the SENA, and the new qualification framework, and the new chain of training, as a new study route for export.
In this historic moment that Colombia is living in, with the most ambitious infrastructure works in the country's history, Mr. Andrade told us about the ANI (National Infrastructure Agency) and how they have been working with you training people of the regions, so that they can benefit from all the development that is coming to the country. We know there is a goal to create 227,000 jobs over the next four years. What strategy are you taking to the regions to employ all those people? What impact do you hope to leave behind?
The first thing we did was to sign an agreement with the Vice President, the President of ANI, the Minister of Transport, and we adequately coordinated this with the President’s office, and the Department for Social Prosperity - DPS. First the infrastructure investment is made, and the Department for Social Prosperity, the Presidency and the SENA, do social work training, focused first on the poorest people in the municipalities where the fourth generation highways will pass. Today for example, we are in a city which is well-known in the world, Cartagena; we have about 12 centers there, along with the DPS, which focuses on poverty and tries to get the Colombians out of it. The figures of poverty declined dramatically, we got 4.5 million people out of poverty in these first five years of President Santos’s government, and we took them out with programs like this one. The DPS today in those 12 centers in Cartagena shows me as SENA who the poorest people of the municipality are. These are the people we contact first to tell them about the fourth generation highway, which will go from Cartagena to Barranquilla and will require 6,000 jobs, which are for people who can operate heavy machinery, for topography, soils, construction of tunnels and viaducts, and in SENA we are specialists in the training of such technicians and technologists, operators and assistants, and we ask them which one of these techniques they want to study, to have a job in the coming years in the construction of this infrastructure. We are conducting the census, and simultaneously with the team of curriculum design and the teaching staff of SENA, we are preparing the training courses. Some have already started in another highway from Puerto Salgar to Girardot. Once we have the course focus and the profiles defined regarding what the requirements for the job are, we start training, and simultaneously the process of employment begins. Along with the dealers, who are the builders of the road, we start the process again, they identify all the positions that are required, we form all these positions, and finally through something we have in the SENA, which is the Public Employment Agency, which has 25 years of experience, we record those trained and help to formalize labor contracts. That's what we do before and during the construction of the work. Then, when the work is finished, we leave trained and skillful people, who will stay maintaining the work in the next 50 years. But these projects will bring changes to the soil structure of the municipalities, there will be new land use plans, which will allow the entry of more industry, more companies, more housing, more public service infrastructure, these new municipalities will be built by those people that SENA has trained. With that we leave a talented labor, which will be the tool to combat poverty in a stable manner. They will not be poor again and they will always have a job.
Another key sector is Agriculture. Minister of Labour Garzón told us that "this country will be viable if it looks at the countryside with real possibilities." We know you have a plan of socioeconomic training for producers and communities, both rural and urban. How will you work to maximize this resource that Colombia has and thus promote job creation?
Here we work with the Ministry of Labour, not with the Ministry of Transportation any longer, with ANI, but with the Minister of Agriculture and we have a program called SENAGRO, SENA for agriculture. We have 17 farms which are training environments, and about 70 agricultural supply centers. They offer to train people in the production of palm oil, sugar, cocoa, livestock, but also in the process of productive transformation of that supply. Two days ago I had a meeting in Caquetá, southern Colombia, in an area that has been protagonist of the conflict with farmers. The great distress they have there is that they do not want to continue selling live cattle so that later the meat is exploited separately from the leather, which is exported from Colombia to Mexico, from where it ends up returning in the form of very expensive shoes, which could have been made by us. SENA is training people so that leather does not have fire wounds and it can be used better, but also, it is training technicians in the tanneries to make leather handling technically better, and simultaneously it is training designers and clothing manufacturers of the final product, to compete in the market and not lose the wonderful production we have. We need to have a policy that also arises, in this government, with all that has been done in the field of agriculture, but that is reaffirmed when it affirms the agricultural pacts signed one year ago, and thereafter we ordered the agricultural supply a lot. For example with palm, we have a specific agreement to teach people how to properly produce palm. We have agro schools across the country, in addition to our farms, pointing to the fact that half of Colombia is agricultural, and therefore half of the offer must be agricultural training.
SENA was created in 1957 by Rodolfo Martínez Tono and today it has become the institution that is most beloved by Colombians, making real the dream of many citizens to have access to quality education. Today 1 in 4 graduates of higher education in Colombia come from SENA. What are the major milestones that you have reached in these almost 6 decades of activity?
1 in 4 college students are studying at SENA. We have an annual offer, not only in higher education, but also technical and technological training, but technique doubles education. We are almost 70% of the offer of technical training in Colombia, and 25% of higher education, and that makes us absolutely strategic in the formation of Colombians. Our milestone has been to reach that level of coverage, and I believe another milestone is having achieved a presence in all Colombian municipalities. We are in 1,031 of the 1,100 municipalities that Colombia has, but we get to the others through training processes, through programs like Young Rural Entrepreneurs, or in preparation for entrepreneurship. There are very remote sites, so wild and mountainous that you have to get there on horseback, by boat, and there SENA is present, to provide complementary training, in a smaller, less sophisticated but very practical way, and I think that is a huge milestone. SENA is now a generator of employment and productivity, which I think is another important milestone that has been achieved in these 58 years of existence.
Facing the fall in oil prices, Minister Garzón also said that it is essential to diversify economy. We have already talked about some sectors you are working with, but how are you collaborating to generate graduates and technicians for other productive sectors?
I'll give you two examples. Training in hydrocarbons, in departments such as Casanare, Arauca, Meta, was 70% of our training offer. Today, July 31 at noon, President Santos will make an announcement on live television saying that SENA enrollment for the last quarter is open, and in this enrollment the offer has changed: training in hydrocarbon production goes down from 70% to 30% and agricultural training goes up to 70%, so we will be connected to the change of productive vocation towards agriculture in these regions through training. In Arauca, we met with cocoa farmers, livestock farmers, and made training plans with them, so that all those people with a lot of talent that are out of work from the fall in hydrocarbons and oil in particular have quick training and labor opportunities in the agriculture sector.
Another one of your roles is to promote entrepreneurship among the people working with you, so that sustainable, profitable companies are created. Minister Garzón said that you invest 10% of your budget on this. What programs do you have? How would you describe the entrepreneurial spirit of the Colombian people?
SENA has an entrepreneurial fund, which thrives on resources provided by law. We estimate that in four years we will have 200,000 to 250,000 million pesos to provide to the seed capital, which is between 40 and 108 million. For the seed capital, there is a preliminary procedure that starts with registrating the person at SENA, presenting a basic business idea, and accompanying SENA experts in developing a project. There is competition for these resources because for each contribution of that amount of pesos 50 people can show up, and the SENA through a specific methodology, works with another public entity, which is The National Development Fund, FONADE, a financial fund from the state. There are the resources and experts analyze the most elaborate business ideas, those with more impact on stability, sustainability and job creation, and finally we assign it to the winners. At the end of those four years, we want 42,000 Colombians to have a stable, sustainable, formal employment, well-paid, through these investments of 200,000 or 250,000 million pesos. But more than these 42,000 jobs, we want a company that today starts with 2, 3, or 4 stable jobs to generate 20, 50 or 100 jobs in 5 or 10 years. A recent impact study shows that 7 out of 10 enterprises survive stably, and that is one of the indicators that makes us think this is a good route.
The productive sector also says that when a graduate of SENA holds a job position, productivity goes up automatically. You recently said that "this institution is on track to be the engine of the country's productivity." What does that say about the quality of the lessons that are taught?
That's the biggest bet SENA has today. I think we are at acceptable levels of coverage; we are not distressed about the numbers of places because we have a presence throughout the whole country. Now our strongest commitment is investing in quality, which has 2 backbones. One of the backbones is infrastructure; there cannot be quality if the infrastructure is not suitable for the training process. The second is technology; there cannot be good quality in the learning process if the technology installed is not modern. We are going to grow enormously, 300% on the improvement of the infrastructure and we will grow almost 100% on investments in technology. The figures are 1 billion pesos in infrastructure and 1.8 billion in technology, with that we aim to make the quality better every day, because the equation is very clear, there will be more productivity when someone from SENA holds a job, that job produces more for the company, then the company is more competitive, it will grow economically, it will pay more taxes, thus we will be able to better finance health, education, housing, infrastructure, and there will be more jobs because there are more investments. It is a circle in which SENA is vital, and it all starts with the quality of the training process, and ends with economic growth.
You have extensive experience in the public sector, having been in various leading positions. What is the added value that you bring to SENA?
I do not think that I can contribute much. I have argued that a good director of SENA is someone that allows it to flow and does not obstruct the processes. The only thing is that with my experience of having been in the Congress of Colombia, having held other administrative positions, I have the necessary calmness to run such a robust organization, with such regional strength. SENA in each region is almost larger than every university in Colombia, we have 117 large training centers, with 450 different infrastructures, about 37,000 people providing services to SENA to fulfill its mission, it’s a very strong institution. I think the only added value I can contribute to this experience is calmness and moderation in understanding where to lead SENA and maintain this leadership firmly.
Lao-Tzu was a Chinese philosopher who said that if you give a man a fish you feed him for a day, but if you teach him to fish you feed him for life. In 2025, when Colombia becomes the most educated country in Latin America, where will we see SENA?
It is our dream that it should be the most educated institution, providing the best education in Latin America on the technical and the technological level. We're already one of the firsts, if not the first. We have very important organizations such as the SENAI in Brazil, which is our rival. In fact, when we compete in the Worldskills competitions in America, the great competition focuses on how many medals SENAI wins and how many SENA wins, and we fight for first and second place. In the last competition of the Americas, Brazil came in first and Colombia second, we hope that in 5 years’ time the first place in quality in the competition will be for Colombia, so that it is consolidated as the first in Latin America, and as one of the first in the world. In September we will travel to Sao Paulo, for a competition with 62 countries that take 62 technicians and technologists SENA type, and compete in robotics, nanotechnology, infrastructure and construction of drivers, and the one who does it best wins the gold medal, with 8 hours of competition, or 3 consecutive days, when it is a complex structure of a robot. We want to improve the position of SENA at the international level, today we must be around 20th in the world, every time we go up, we will be approaching the goal that President Santos has set, which is to be the most educated country by 2025, and that involves SENA.