By Lilia Burunciuc

News Americas, NEW YORK, NY, Tues. June 24, 2025: Earlier this year, I met a young graduate who had spent the entire summer searching for a job that matched her education – without success. As the weeks passed and her options narrowed, she applied to a local meat shop, hoping to find some form of employment. But even there, she was turned away – she was “overqualified” to pack chicken legs.

Her story is not unique. Across several Caribbean countries, young people are discovering that academic qualifications, while essential, do not always open the doors they expected. Businesses, in turn, report difficulty filling positions, not because of a lack of applicants, but because many job seekers simply don’t have the technical skills or experience required. This disconnect – between the supply and demand of skills – is one of the most persistent growth constraints in the region.

In Grenada and Saint Vincent and the Grenadines, for example, firms consistently rank the shortage of a skilled workforce among the top two obstacles to doing business. The impact of this shortage is striking: in 2020, 50% of all job vacancies in Saint Vincent and the Grenadines requiring skilled workers remained unfilled due to a lack of qualified applicants. In neighboring Saint Lucia, 40% of employers reported that the skills and education of workers hindered the country’s competitiveness. Meanwhile, the problem extends beyond businesses – 61% of youth report difficulties finding jobs or earning a living, often because their academic qualifications do not align with the demands of the labor market.

The ramifications are wide-ranging. Youth unemployment in Grenada and Saint Lucia exceeds 40%, among the highest in the Eastern Caribbean. For those who do find work, many are employed in roles for which they are underqualified—57% of workers in Saint Lucia lacked the necessary qualifications for their roles in 2019 – or that fail to fully utilize their education and skills. While such employment may offer income, it can also lead to mismatches between workers’ capabilities and job demands, leaving many young people frustrated and limiting the potential of businesses to operate at full productivity.

These challenges reflect deeper structural issues, including inadequate quality of basic education and insufficient collaboration between post-secondary institutions and the private sector. Post-secondary institutions often operate in isolation from industry, leaving students with academic credentials but without the practical or technical skills employers need.

Compounding the issue, the Eastern Caribbean spends around14% of their education budget on post-secondary education, compared to 25% in Latin America and 32% in OECD countries. With outdated laboratories, limited digital infrastructure, and low capacity to support inclusive education, many institutions are ill-equipped to prepare students for the demands of today’s labor market.  These challenges are further amplified by the emigration of highly skilled workers, who often leave the region in search of better opportunities abroad. This loss of talent reduces the availability of skilled professionals at home and weakens the return on public investments in education.

The skills shortage not only impacts individual job seekers; it undermines the broader economy by stifling productivity, reducing business competitiveness, and limiting opportunities for innovation.

Partly due to missing skills, Eastern Caribbean firms are not adequately investing in and engaging in innovative activities. Only 2.7% of firms in Grenada and 3.2% of firms in Saint Lucia have human resources dedicated to research and development.

Research and development are vital for fostering creativity, developing new technologies, and improving business processes. For the Caribbean, investment in research and development is particularly important to address challenges in key sectors such as tourism, agriculture, and renewable energy, unlocking new opportunities for sustainable growth.

However, many firms perceive the cost of innovation as too high relative to the market size. In small economies, businesses often believe that investing in innovation won’t yield sufficient returns due to limited local demand or the high costs of implementing new technologies. This perception discourages companies from pursuing innovation, limiting their growth and competitiveness.

There is no single solution to these challenges – but there are clear areas for action. First, post-secondary education should receive more attention to ensure institutions are equipped to deliver relevant, high-quality training. Modernizing curricula to include both technical and transversal skills—such as problem-solving, adaptability, and digital literacy—is essential for preparing youth for the demands of today’s economy.

Equally important is fostering closer collaboration between educational institutions and the private sector. While some institutions already maintain partnerships—particularly in tourism—there is a need to expand these efforts across a wider range of sectors. Deeper and more diversified collaboration can help ensure that training programs align with evolving industry needs, encourage workplace-based learning opportunities, and support research and development initiatives that foster innovation and job creation.

Expanding regional frameworks, such as shared learning standards and qualification recognition, would allow for greater mobility of talent and ensure consistent skill development across the region.  For small island states, such collaboration also offers a practical advantage: the ability to pool resources and benefit from cost-sharing opportunities, making education and training systems more efficient and sustainable.  Finally, addressing barriers to innovation by creating incentives for businesses to invest in research and development and improving digital infrastructure will help unlock the region’s economic potential.

The World Bank is working with Caribbean countries to support these goals. The OECS Skills and Innovation Project is one example. With $36 million in financing, the project focuses on enhancing youth skills, fostering regional collaboration, and strengthening a culture of innovation. By supporting 40,000 young people with targeted training, establishing common learning standards, and encouraging partnerships between businesses and post-secondary institutions, the initiative aims to build an ecosystem where innovation and skills development drive growth.

Beyond the Eastern Caribbean, countries like Guyana and Belize are also stepping up efforts to close the skills gap. In Guyana, the World Bank is supporting the government’s investment in a broad set of skills needed to power its rapidly expanding economy—with a strong emphasis on technical and vocational education and training. Meanwhile in Belize, where women’s labor force participation remains significantly lower than men’s, a forthcoming project will focus on early childhood development and female empowerment—with a dedicated component aimed at expanding women’s employment opportunities through skills development and support for businesses in the care and education sectors.

The Caribbean holds immense potential. Tapping into that potential will require a coordinated effort, long-term investment, and a shared commitment to aligning skills with opportunity. Encouragingly, that work is already underway.

EDITOR’S NOTE: Lilia Burunciuc is the World Bank Director for Caribbean countries. Ms. Burunciuc, a Moldovan national, is
responsible for maintaining the partnership with the countries to address their development challenges. She has extensive experience on leading policy dialogue with governments on various aspects of development.