On the job: Development and promotion of technical and vocational training key to improving employment rates

Although countries vary in their economic priorities, the need for skilled labour is both a cause of and a requirement for accelerated growth that spans markets and continents. This demand for technical specialists is often most concentrated in the sectors that are vital to economic advancement, including infrastructure, oil and gas exploration and extraction, and value-add processes for agricultural commodities.

Efforts to expand this expertise locally, rather than relying solely on international organisations or expatriate leadership, have come to the fore in recent years, both as part of individual country schemes and multinational efforts. As a result, markets around the world are using a range of strategies to overcome common challenges and align legal frameworks, policies, and education and training systems with industry needs.

SKILLS MISMATCH: Global unemployment remains an ongoing challenge, particularly in developing economies. According to the “World Employment Social Outlook: Trends 2017” report by the International Labour Organisation, the number of unemployed people around the world is expected to rise by 2.7m in 2018, compared to the 3.4m increase expected in 2017, with Latin America and sub-Saharan Africa particularly affected. Provision of employment opportunities is acknowledged as a global need by international entities like UNESCO, which estimates that at least 475m new jobs must be created over the next decade to absorb 73m currently unemployed youth and the influx of 40m new entrants to the labour market each year.

It is not the case that high unemployment rates result from a lack of jobs, but rather from a mismatch between the skills needed by the market and the education of the populace. A 2014 World Bank report on Ghana’s labour market, for example, estimated that over 1m jobs could become available in the country’s booming construction sector between 2015 and 2020. However, this demand is not being met by the local supply of talent, resulting in an estimated deficit of 60,000-70,000 skilled workers.

This is also an issue across Latin America. According to data collected between 2010 and 2017 by the World Bank Enterprise Surveys, 31.6% of responding firms highlighted that finding a qualified workforce is a key challenge, compared to 17.3% among firms in high-income OECD countries. The situation in Panama is particularly acute: the US International Trade Administration noted that the unemployment rate for skilled employees is actually negative due to the severe shortage of workers in technical fields, including IT and construction, with Panamanian employers citing the lack of skilled labour as a hindrance to growth.

Furthermore, necessary skill sets are constantly shifting as industries change more rapidly. As per the World Economic Forum, between 2015 and 2020 the top-10 skills required by companies will have changed.

NEGATIVE PERCEPTIONS: While technical and vocational education and training (TVET) programmes can, in theory, provide the unemployed with the specific tools they need to be attractive to an employer, a fundamental challenge to this is combatting the perception of vocational training. Indeed, a 2016 report from UNICEF found that negative attitudes toward TVET are “often associated with academic failure, rather than being an alternative path to productive and decent work”.

According to the World Bank, the general perception of TVET across the Middle East is that it is an inferior option compared to university. A 2015 OECD study found that in Egypt, TVET programmes are considered to lack prestige and are seen as the “low-status” option for those who did not do well on the country’s standardised general secondary exam. Vocational training also sees a general lack of interest in the Gulf states; only 3% of post-secondary graduates pursue vocational training in Abu Dhabi. Similarly, according to UNESCO, enrolment across Africa in TVET courses is less than 5% due in part to these negative attitudes. Raising enrolment will require ensuring that offerings lead to real opportunity and align with student preferences.

PRACTICAL TRAINING: In order to directly link TVET programmes to employment, markets are increasingly focused on apprentice-style training to best prepare students for the work they will eventually be doing. For example, in 2015 Nigeria established vocational enterprise institutions (VEIs) and innovative enterprise institutions (IEIs). These private schools – 77 approved VEIs and 140 IEIs as of September 2017, according to the National Board of Technical Education – are directly partnered with various businesses to provide tailored technical training. Another instance in the region of linking training with industry is the Moroccan Aerospace Institute (Institut des Métiers de l’Aéronautique, IMA), a training centre established in 2011 as a partnership between the Moroccan Aerospace Industries Group, the Moroccan government, the French Union of Metal Industries and the French Development Agency to develop local capacity to support the kingdom’s growing aerospace activities. Hamid Benbrahim El Andaloussi, founder of the IMA, told OBG that as of 2017 the institute had already graduated over 1500 trainees and doubled its capacity to meet growing demand.

As oil- and gas-producing states in the Gulf continue efforts to build local operating capacity, there has also been an increased focus on education that prepares students for specific roles within the energy industry. Reshaping programmes have involved increased collaboration with industry players, such as Qatar Petroleum, which now hosts students on site visits and provides mentorship. “If you don’t see this work in action 20 miles away, you don’t understand what it feels like,” Mike Bowman, chair of the Petroleum Engineering Programme at Texas A&M University at Qatar from 2015 to 2017, told OBG. “We need to make sure that in addition to learning the theory, students see the practice.”

GOVERNMENT-LED EFFORTS: Another positive – and necessary – trend in recent years has been for governments to incorporate TVET programmes into their national education and economic strategies, although the challenge of streamlining this public involvement remains. The OECD points out that when too many departments or ministries become engaged, it can “confuse students and employers, involve some duplication of tasks such as curriculum design, and complicate transitions”. In Egypt, for instance, the state’s engagement in TVET has historically involved more than 20 ministries and institutions, leading the European Commission to cite “inappropriate mechanisms for an effective and efficient governance and financing of the TVET system” as one of the key barriers to a successful programme. Efforts to consolidate this public involvement in Egypt continue, with support from the EU, among others. Similarly, until recently in Ghana, aspects of TVET programming were overseen by up to 18 ministries, negatively impacting coordination. However, speaking to local press in August 2017, Ghana’s minister of education announced a plan to align all TVET programming under the Ministry of Education.

Indeed, there are various success stories with regard to government reform that can serve as blueprints. According to the OECD, in South Africa the 2009 establishment of the Department of Higher Education and Training (DHET) was a key step in integrating and consolidating vocational education and training policy. Rather than dividing responsibilities between the Department of Education and the Department of Labour, the DHET now bears responsibility for an integrated “post-school” system consisting of universities and colleges, the Sector Education and Training Authority, the National Skills Fund and the regulatory bodies that oversee quality.

Another government step has been increased public investment in TVET programming. The Asian Development Bank notes that some of the most economically successful countries in the region, such as Singapore and South Korea, have invested public funds in skills development as a growth strategy, and other countries in the region have begun to follow suit. In Indonesia, for instance, vocational training is growing and is seen by the government as a way to tackle the country’s skills shortage, particularly in manufacturing. Airlangga Hartarto, the minister of industry of Indonesia, told OBG, “The Ministry of Industry is pushing for linkages between the needs of industrial development and the availability of education. Therefore, technical training and vocational schools are at the centre of our policy to develop our people’s capabilities, as well as push for new entrepreneurship. The ministry has built and is operating nine vocational schools, nine polytechnics and a community college.”

PUBLIC-PRIVATE PARTNERSHIPS: As highlighted by the World Economic Forum, the World Bank and markets with long-standing successful vocational training programmes, such as Germany and Austria, when these government strategies directly align with and support on-the-job training provided by private companies, economies have the most to gain. This model of cooperation is becoming more articulated across markets, including by the Shared Value Initiative, a programme operated by US-headquartered consulting firm FSG that promotes education collaboration strategies among companies and governments.

In Malaysia, the Department of Skills Development works closely with companies participating in the National Dual Training System, providing guidance on programme content. In Egypt, building on the original efforts of the “dual system”, German companies in particular, like Mercedes-Benz and Siemens, have remained major players in the vocational training space, providing educational centres that equip engineers and technicians to support government projects to revitalise the country’s industry and energy sectors.

Economies around the world are becoming increasingly aware of the lack of a skilled labour force, and efforts to reduce this supply-demand gap are under way. Governments, in conjunction with private-sector companies, are working on improving education in the classroom as well as offering vocational training to equip graduates with the necessary skills to bring to the workplace. Promoting this kind of cooperation and commitment will produce a stronger pool of talent to help grow economies throughout the 21st century.