Abstract:

Picture this : Young people aged 15–24 in Africa, Asia and the Pacific will comprise 77.0 per cent of the world’s youth labour force by 2030. In contrast, 70.9 million young people are also estimated to be unemployed (ILO Global Employment Trends 2017). The Global Skills & Jobs mismatch is widening with more young people falling out of the job market each year. Vocational Education & Training (VET) Systems have to successfully bridge this gap by creating a steady supply of skilled and job-ready workforce. In majority of countries the public & private sector often work parallely leading to VET systems that are expensive, not relevant and lack quality. This paradox - where on one hand workforce demand is being triggered by the fourth industrial revolution while more young people are out of school, unemployed or have little opportunity for school to work transition - is one of the most pivotal challenges of the next decade. While, there isn’t one strategy that fits all and works for all, there are best practices that can act as effective reference points.

Several studies conducted in EU, Australia, East Asia, Sub Saharan Africa and Latin America have documented the short-term and long-term impact of companies investing in VET. There is evidence that Companies who are active participants in provision of apprenticeships gain greater returns in form of quality of workforce, productivity, reputation etc. A German company, for example, invests ~ €18,000 per apprentice per annum towards his/her training. It bears the costs towards Apprentices (monthly remuneration, social benefits), Training (Trainers, Staff ), Premises, Materials, Equipments etc. Besides the many short & long term benefits for companies like improved brand, saved recruitment costs, supply of trained workforce; 70% of this investment is refinanced by the productive contribution of trainees during the training period. Several similar experiences are available from companies in Switzerland, Netherland, Austria, Finland, Denmark, Australia where VET is a partnership between the public and private sector.

As emerging and developing economies struggle to reform their VET systems, there is much to gained from the available best practices. Governments across the globe have launched initiatives to promote VET and apprenticeships. The biggest struggle is engaging the private sector especially SMEs as a co-partner of apprenticeships. This not only increases the training bill for the Government but also results in creation of private training market which ‘simulates’ the work environment and prepares the trainee for a ‘job’ and not on a ‘skill’. The involvement of the company becomes more important to ensure the relevance and linkage to the job market. It is in this context that some key questions emerge - What are the experiences of VET systems where the companies invest in training? What direct & indirect benefits do they gain in the process ? How do these economies cope with the evolving skills needs? Why should Companies invest in Vocational Education & Training?

Through my paper presentation, I would like to trigger a dialogue around practices, motivations and examples of private sector engagement in VET. This paper will trace the motivation of companies (especially SMEs) in complimenting the public training initiatives. The highlight will be identifying some best practices that are relevant for other countries – within or outside the EU.

Keywords:

Investing in Vocational Training, Investing in Skills, RoI of VET, Funding Apprenticeships, Private Sector Investments in Vocational Training, Apprenticeships.