Building Digital Capacity for Employability Programs Through Impact Bonds in Colombia

• In Event: From Data to Decisions: Empowering Schools and Policy Makers Through Digital Information Systems

Proposal

Historically, Colombia's local and national governments has invested substantial resources in employability programs designed to enhance participants' skills and competencies. However, these programs often prioritized broad service coverage over achieving measurable outcomes, such as effective job placement and retention. The lack of robust measurement in these programs has hindered the ability to assess their impact, evaluate cost-effectiveness, and ensure transparent use of public resources.

SIBs.CO, Colombia's Social Impact Bond program was established to tackle unemployment amongst vulnerable groups in Colombia. In addition to tackling the socio-economic challenges underlying unemployment, SIBs.CO also aimed to address the limitations around the employment data infrastructure, which made it difficult to assess and address these challenges effectively.

SIBs.CO has driven transformative change by fostering public-private partnerships and promoting data-driven decision-making to address complex challenges and achieve verifiable results. A key element of this effort was the development of an information management tool, which has been crucial for real-time monitoring and evaluation of the SIBs.CO interventions. Although the tool itself is relatively simple, its interoperability with various data sources has proved essential, centralizing access to key information and optimizing decision-making throughout the intervention lifecycle.

In addition to monitoring and adjusting interventions, the digital information tool provides greater traceability between interventions and their impact on participants' lives. The tool allows for the collection of detailed participant data, revealing important insights, such as a positive correlation between the number of soft skills training hours and successful job placements. It also highlights improvements in access, retention strategies, profiling, and matchmaking practices, which has enhanced intervention efficiency and employability.

The tool has not only deepened the understanding of intervention pathways, such as those related to job placement and retention, but has also uncovered significant impacts that might have otherwise gone unnoticed. For instance, data revealed that participants made meaningful progress in other aspects of their lives, such as gaining access to formal financial services.

As a result of SIBs.CO, formal employment among participants increased by 12 percentage points after three months and 8 percentage points after one year, with the formal employment gap among women being reduced by 8.4 percentage points.
Collaboration with the government has been instrumental in driving a cultural shift within public institutions towards better tracking, monitoring, and verifying results. This initiative has been a key exercise in capacity building, enabling entities to make more informed decisions based on reliable, real-time data from the field. By integrating digital information systems into results-oriented contracting and spending, it has been demonstrated that a data-driven, outcome-focused approach not only enhances transparency but also offers a more cost-effective alternative for public procurement. This shift is helping to build the digital capacity of Colombia's government institutions, setting a precedent for more accountable and efficient public services.

In this panel, we will share how SIBs.CO contributed to the establishment of a digital employability program information system and build the digital capacity of Colombia's government institutions.

Author

• Rafael Arias, Fundación Corona