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Role of vocational education training (vet) policy in creating high skill society


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Dr. Awais e Siraj Managing Director Genzee Solutions, A Strategy, Balanced Scorecard, Scenario Planning, Competency Based Human Resource Management Consulting Company

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Role of vocational education training (vet) policy in creating high skill society

  1. 1. Role of Vocational Education Training (VET) Policy in Creating High Skill Society Siraj, A. (Managing Director Genzee Solutions, A Consulting Company)Abstract:This paper looks at the extent to which a ‘high skills’ society can be created using a VETPolicy by initially describing what VET means to different people. After briefly discussingthe human capital theory and the welfare economics of training, it gives a summary ofvarious VET classification systems to establish that the meaning of globalization in VETcontext is the knowledge system, ICT and social change. The final debate looks at howvarious high skills societies have been created eventually concluding that countrieshave been successful in creating a high skills economy through VET policy only whenthey had a clear strategy for development and competitiveness in the global economy tosuit their environment, institutions and cultures.. The individual models work best in theowner environment and there have been serious challenges in reaching a universalmodel because of differences in common definitions of assessment criteria, legislation,technology, institutions, skills, culture and priorities.Introduction:Vocational training is a learning intervention for a specific work in industry or trade oragriculture. Vocational education, focusing on future occupations is aimed at advancingan individual’s general proficiency in manual or practical activities. (Shah et al 2011)With the rapid growth of economies and dependence on technology, this has becomeso important that governments and businesses started heavily investing in it. Whether itis retail, information technology, tourism, cosmetics, services, cottage industries ortraditional crafts, vocational education has established its grounds extensively.In the last few decades, political scientists, educationalists, sociologists and economistshave come to believe on the conventional wisdom that economic performance of anycountry is directly linked to education and training. (Ashton and Green 1996) Cantor(1989), OECD (1985), Caillods (1994) and CEDEFOP (1984) drew attention to thevarious ways in which education and training is provided in different countries andclassified three different models in operation: First is the ‘dual’ model as practiced inGermany, Switzerland and Austria, whereby young people enroll in apprenticeship incontinuous vocational education after leaving school. They are not on jobs during thisperiod. In the second model as practiced in Belgium, Sweden, North America andJapan, the schools provide vocational education up to the age of 18 and are thus called‘schooling’ model. In France, however, the vocational schools are characteristicallydistinct from the educational schools and in Sweden, vocational and academiceducation is provided within one institution. (Green 1991) The third model as practiced
  2. 2. in Great Britain, youths are provided vocational education outside the schools in a non-formal sector. (Furth, 1985)Human Capital Theory and VETThe relationship of VET with Human Capital Theory (“The set of skills which anemployee acquires on the job, through training and experience, and which increase thatemployees value in the marketplace”. can be traced by itsroots in the ‘liberal’ system which supports the view that individuals may not be leftalone to fight market forces for their education and training and that the state is equallyresponsible for providing equal opportunity to workforce to compete in the market. Theother leg of the liberal system, the educationalist system generally ascribes educationand training to economies but cannot categorically connect it to economic development.Therefore we only take on the Human Capital Theory for further discussion.Human Capital Theory compares human capital input at an equal level with the physicalcapital input except that unless in a slave society, it cannot be liquidated thus providinga rationale for the need of education and training by individuals.. The cost of investmentis calculated by the individual’s capitalization ability with discounting of income in future.Thus a ‘general’ training cost is to be borne by the employee and a specialized costcould be shared. Collecting the sum of its parts, a society as a whole decides itcollective needs for investment in training. The fundamental weakness in this theory isits description of human beings as ‘things’ thus humbling social relations, invitesconsiderable criticism but on the whole, this theory has been used for extensively forpolicy decision and planning across the world. The theory supports the laws ofneoclassical economics which emphasize, the state needs to intervene, regulate,subsidize and stimulate vocational education and training if it has to improve nationalproductivity and national economy.The Welfare Economics of TrainingThere are three basic arguments as to who should bear the cost of training: a. The Employer b. The Employee c. The State or GovernmentThere are bright and dark sides of all. The employers see it as ‘investment’ as well asan ‘expense’. If the employer is imparting training to an individual, it is necessarilyenhancing the skill level of the individual resulting in enhanced productivity. However,when the productivity of an employee is enhanced, he or she becomes an ‘expensive’commodity and an employer is bound to raise his salary to retain him within theorganization or else he will be poached by other employers. Therefore some employers
  3. 3. see it as lose-win situation and refrain from spending on training of its employees.Logically an employer will only pay for training when it is expected to bring more returnthan the investment. An exception to this would be a ‘monopsonic’ situation where thefirm trains the people for its short term benefits but cannot hold them for a long time inemployment because of their inability to afford higher wages whereas some other firmscan exploit the same and poach the employees with higher wages.Becker (1964) has argued that firms will not bear the cost of training if they cannot reapthe benefits. It is the individual who reaps the benefits. He can sell his services for moreif he is sure of his enhanced productivity and therefore should pay the cost.If the state wishes to increase the overall productivity and competitiveness of societyand nation, it must take the burden of training. This issue has been much debatedaround the argument that ‘market failures’ (Annexure I) should take a decisive role inwhether the state should or should not spend on training and if it does, it shouldnecessarily be equitable.The law of diminishing returns also applies on training. If we consider the investment ontraining as a cost, then the rate of return on the additional money spent decreasesconsiderably if major investment has already been done. If the initial investment is low,the rate of return can be high.In all other situations, the trainee is expected to bear the cost of training and productionlost since he is benefitting the most. In case of inefficiencies and inequitable incomedistribution emanating from market failures, the state can bear total or substantial costof training. Therefore we also see differences in reading the same model because ofdifferent perceptions.Classification and Differences between SystemsIt is worth noting that there is no uniform system for classifying the vocational educationand training system. Various international agencies, institutions and researcher haveused their own models to analyze national systems, economies and political systems.Noteworthy among them is the neo-classical theory used by international agencies likeILO primarily because they have been largely funded by United States and thus echo’sits power as well as political strength. The question therefore stands valid whether thereis only one (the neo-classical) system for economic growth or there are more. Therange starts from a ‘Cooperative’ group in Austria, Germany, Switzerland and manyLatin American Countries where cooperation comes from employer organizations, stateand trade unions to “Enterprise Based” in Japan featuring low labor mobility and long-termism. UK and US where institutional pressures to impart training are low, are labeledas the ‘Voluntarist’ group. The state driven groups are further divided into two: The“Demand Group” of countries like Hong Kong, S. Korea, Singapore, Taiwan and China
  4. 4. where the state identified the growth strategy and developed the skilled workforce tomeet challenges. The second is “Supply-Led” group where government takesresponsibility for training but is in under no pressure from employees or employers. Thisis prevalent in many developing countries of Asia and Africa.Unfortunately, we still lack the basic understanding of these areas to theorize properly.We are not sure yet how perfect world market looks like. We are also not aware of thenature of these work systems and also not clear about the relationship of labor andstate with the capital. Politicians sometimes take the central role in outlining the fundingfor VET and their approaches vary from place to place. Classically they look at somehistorical data, culture, existing institutions, future requirements and the overall growthstrategy of an economy vis-à-vis its competitors. There are differences in approach‘within’ societies rather than differences ‘among’ them which makes analysis anduniformity even more complicated.Ashton et al (2002) have looked at the evolution of Education and Training Strategies inSingapore, Taiwan and South Korea. They established that all three countries firstdeveloped their industrialization strategies and then delved into generating distinctiveeducation and training needs. These governments established conditions in which theycould manage the relationship between labor and capital to exploit their humanresources and maintain growth by selecting specific industries with high value – addedproduct markets and distinct competencies. Although the three countries adopteddifferent strategies for growth and development, the result was the same: The demandof skills only came from their trade and industry policies. The education and trainingplanning and implementation was also different from other economies in that while allothers looked at the past trends and extrapolated future demands, these statesanticipated only the strategic demands of global markets and created a skilledworkforce that would be suitable to deliver as per the requirements of future. While thestate provided a platform for industrial success and growth to key organizations, it alsomade sure that appropriate and skilled workforce was ready to take up thesechallenges. This model was successful because all three countries were under externalthreat so great that they were near extinction. The second reason for success is that theentire economy is committed to long – term and strategic direction and the politico –economic policies remained geared towards a common goal, common vision andcommon perception.The experience of high skill societies of Germany and Japan is highly appreciated bypoliticians, policy makers and governments across the world as it provided moreeconomic growth with high return on investment and new market opportunities. Its keyoffering of a better paid job made it attractive for the working as well as the middleclass. However there were some differences in the mental models of those thinking onthe line of a ‘free market’ economy. They thought that high skills society could be
  5. 5. achieved through a free market economy because the market itself will adapt, adjustand attract high skills. Conservationists, on the other hand were of the view that highskills society cannot be achieved by market forces alone and that governmentintervention is required to make it happen. They were of the view that free market forceswould only create a small high skilled group of elites who would then take charge of themarket, leaving the low skilled far behind this creating a disequilibrium of a small groupof highly skilled and very large group of low skilled moving towards even lower skillsleading to inequitable distribution of wealth in the societies.Another comprehensive classification given by Keating et al (2002) in their study ofthree regions (Europe, East Asia, America) and nine countries (France, Germany, UK,China, Japan, Singapore, Chile, Mexico, US) puts social, historical and economicfactors at the center of their focus and look at current developments in these countriesin the context of political pressures and economic changes at the national and regionallevels. The analysis however drills down to the desire for higher productivity and the roleof VET in reducing unemployment. For some countries like Germany and Singapore,this was a surprise because they never considered that VET can reduce unemployment.What brings this study in a neo-classical framework is its focus on the genericworkplace and industry specific skills.Ashton et al (2000) attempted initially to give a brief account of earlier approaches tocomparative analysis of training and skill development system. Furth (1985)distinguished “the education and vocational training of different countries according tothe post-compulsory vocational training arrangements”. He also identified the ‘schooling’model, the ‘dual’ model and the ‘mixed’ model. Green (1991) put forward the ‘employer-led’, the ‘education-led college based model’ and ‘education-led college based system’.Calloids (1994) positioned these systems according to institution, enterprise and dualsystem. Alfthan and de Castro (1992) incorporated cultural values in the VET analysis.These analyses and a variety of others formed the basis of later studies conducted byOECD, ILO and World Bank.The first model suggested by Ashton et al is “The Market Model” in which theyestablished the relationship between state, capital and labor mainly led by the Britishand US firms utilizing the colonial roots of British and the capitalistic over-influence ofUS over economies. Economies like Germany, Austria, Switzerland, Netherlands andDenmark which could not easily break into the world trading system dominated byBritish and US companies adapted “The Corporatist” model whereby the state and thegovernment actively used the education system to acquire appropriate skills for drivingthe process of industrialization. Countries which felt ‘left-out’ from the first two models(blocks) realized that they have neither the capital, nor the natural resources to join therace. They therefore resorted to “The State Model” to convert cheap labor into humancapital. Initially they were successful in developing a low skilled workforce which
  6. 6. produced low-value added production but later worked aggressively towards high value– added production. Last but not the least, economies that had major challenges withtheir financial systems were grouped into “The Neo-market” model. These were thecountries which relied on exporting primary products and importing value – addedproducts. These states did not have the necessary financial infrastructure. Throughcentralization of education and training, they thought of taking charge of the marketinitially and when the foundation was set for the growth, the sectors were decentralizedsubsequently and in steps.Whatever the system of training is in any given economy, the importance of a high –quality education based on analytical and social skills is considered to be of paramountimportance followed by the reward systems. Inefficient economic systems will lead tolow yield on training investment. Finally, all stakeholders, the government, employersand worker have to be involved and engaged in the system with heart and mind to reapmaximum benefits thus improving performance and efficiency.Impact of Globalization, ICT and Knowledge Economy for High Performance WorkOrganizationsGlobalization means different things to different people. However for our intent andpurpose, global economic change would be the main driving force for an enhancedactivity in VET at policy level. (Keating et al 2002) Widely thought of as a continuouseconomic process, globalization in strictest terms it is a “social process” at all levels ofthe world.The traditional organizations required their employees to specialize in certain skills andcontinue doing the same for the rest of their life. (Smith 1888) This phenomenon israpidly changing in the new work practices of globalized world. Employees are not onlyexpected to be the proficient in production but also need to contribute in training,customer relations, administration marketing and innovation. The new high performancework teams require a great degree of judgment, versatility and social competence or theso called ‘soft skills’ because they have to undertake the responsibility organization ofinput supplies, understanding financial and accounting procedures, training of newrecruits and evaluation and supervision of their peers and subordinates. A ‘well-rounded’ personality is the preferred over an ‘expert’. The new management challengeslike “Total Quality Control”, “Just in time” and “Lean Manufacturing” are a ‘mind-set’ firstand processes later. High performance teams have decentralized the process ofdecision making and have brought the workers close to top management through activeengagement. Last but not the least, the salaries and wages are now directly linked tobusiness and much emphasis is placed on the ‘soft’ side of performance.
  7. 7. This transition is generally attributed to Information and Communication Technology.Though it is difficult to directly measure how prevalent is ICT within the organizations,systems and societies but whatever data is available suggests a significant shift.Suggestion systems and survey feedback are adopted by 90% of large organizations inthe United States. (Askenazy 1999) Matrix structure (Business Units) exist in 60% of thecompanies 78% organizations have self managing work teams. This phenomenon hasalso led to labor shortages, acute at both ends of the spectrum of labor market i.e.among the highly skilled as well as the unskilled, in some parts of the Europe.(European Commission 2000) The assumption that only computer specialists arerequired is no longer valid. Expertise in different applications of computer is in greatdemand across industries like tourism, hotels, electricity, electronic production,agriculture and construction. (DEWRSB, 1999)Next to ICT, knowledge has now taken the center stage for social activities andeconomic development in organizations. (Dosi, OECD 1996b) The demand foremployees that generate knowledge and ideas increase in the emerging economicsystem. Wolf and Baumol (1989) categorized occupations into ‘information’ and ‘non-information’ groups. Information groups are further divided into data workers(manipulating information) and knowledge workers (generating information). Theknowledge workers include those involved in generating knowledge and creating ideasand have expertise which not readily transferable. The demand for knowledgeemployment is on the rise substantiated by the fact that the number of knowledgeworkers in OECD countries rose by 30% (5.5 million) between 1992 and 1999. Between1992 and 1998, about two million knowledge workers resulted in 14% of the netemployment during the period. However it could not be established that all knowledgeworkers had to have a university qualification to prove their worth in this economy asabout half to one third of these workers did not have a university degree.“Workplace learning has become increasingly important during the last decade.”(Ashton 2000) As a consequence of globalization, the high performance workorganizations developed, benefitting the employers in terms of higher levels ofprofitability and productivity while bestowing challenging work and higher earning foremployees. The key reasons behind this are the rapid growth of knowledge economy,ICT and the high performance work practices. The combined consequence of this hasbeen the increase in the share of working population who, in their everyday work, applyand dominate knowledge. High performance work organizations on the other handprovided opportunity for the so called the ‘junior’ white collared and manual workers, anopportunity for life-long learning leading to relatively higher earnings and betteropportunities. (Eraut et al, 1998)The introduction of high performance work organizations is transforming the ways ofworking of not only the ‘knowledge worker’ but also that of craft workers, semi – skilled
  8. 8. and unskilled workers in the manufacturing as well as service sector. Despite the factthat they have never received a so called ‘academic ‘ exposure and learning opportunitythrough text books and class rooms, they are now forced to update their existing bodyof tacit knowledge to stay abreast with the developments in their respective industries.Certain professions like calligraphy became outdated in certain parts of the world andreplaced with computers. Calligraphers were either forced to learn the use of computersor find a new profession.This transformation from Taylorist or traditional thinking to high performance workorganizations had not been easy. Traditional production or assembly lines followed arigid control and command. The division of labor was highly specialized characterizedby several levels of authority whereby knowledge rested with technical specialist orsenior managers. The workers were not allowed to contribute towards innovation astheir assignments were clearly defined and restricted to task completion. Training onsuch traditional jobs was only through on the job learning. These restrictions had aprofound impact on the personality of workers. (Ichniowski and Shaw 1995) On theother hand the workplace in the high performance work organizations is designed toimprove organizational performance through the development of employee abilities byexploiting emotional capital and tacit knowledge. The technical skills are enhancedthrough multi-tasking, problem solving, team-working and cross functionalcommunication. The emphasis is on the development of self confidence and flexibilityrather than rigidity.There are some consequences related to the changing work environment. We havesaid above that the changing organizations now have a decentralized system ofdecision making, greater number of self-managed high performance teams, qualitycircles, kaizen improvement and so on. These new ways of working have a strongbearing on the employee to learn these skills as quickly as possible in order to performbetter. Thus the VET systems are now focusing on these new soft skills like team-working, communication skills, conflict management, creative thinking and problemsolving and decision-making skills in addition to their focus on a variety of technicalskills. The names may differ like in UK they are called Key Skills while in Singapore theyare called “Critical Enabling Skills”. The definitions and components of each modulemay differ from country to country and culture to culture. Green et al (2001) have putforward the argument that out of the new skills of computing, team-working andcommunication, only computing can be learnt at its best in the classroom whereas otherare only best learnt in an on job setting. In any case, the demand for ‘soft’ skills isgrowing day by day across organizations.Achieving the High Skills Society/Economy
  9. 9. A high skills economy is defined as “an economy with a wide distribution of workforceskills where these are fully utilized to achieve high productivity across a wide range ofsectors, at the same time producing high wage rates and relative income equality”.(Green 2001). Four types of High skill strategies can be categorized: a) United States and United Kingdom: High Skilled Elites and skills polarization b) Germany: High skill elites, skills polarization and relative income equality c) Japan: Wide Skills Distribution, Labor intensity and cooperation, relative income equality d) Singapore: Uneven but rapid skill formation with discipline and high labor intensityThe end of second world war was the beginning of major change for all greateconomies like UK, USA, Germany and Switzerland though the trade models of all weredifferent. UK and USA relied heavily on high value, high price industries as well as laborintensive low price industries as their markets were far and wide. UK banked on itscolonial outreach and US exploited its capitalistic wings. Germany and Switzerlandshifted their policies towards high-value, high priced industries and started developingexpertise that was difficult to replicate by others so easily. They thought of creating acompetitive advantage in industries where the new industrial economies could not easilycompete viz. the knowledge intensive and higher value-added industries which requiredhigh level of skill from their employees but also delivered high wages.Countries like Singapore, Malaysia and South Korea while attempting desperately totake their citizens out of poverty and unemployment through rapid industrialization,initially followed the low-cost, low value addition route requiring relatively unskilled labor.They focused on mass production. However, some countries that started off as lowlabor cost, low value-added and low-skilled economies started moving quickly in thedirection of high skilled, high value-added economies (Ashton et al 1999).Thus the newindustrial economies started moving in the direction of older economies following thehigh-skilled route.Meanwhile new knowledge intensive, and high value-added jobs began emerging in US,UK and South Africa relating to Information Technology and computing. In the SiliconValley, new businesses emerged the beginning of which was a sudden swell in theResearch and Development spending by the US defense department. It seemedobvious that well paid jobs in a highly skilled industry have been created through themarket forces. Britain joined the race.Routes to High Skills Society – The Successes and FailuresThe achievement of a high skills society was not a hallmark of only the old industrialeconomies. Emerging low skills societies like Singapore, Hong Kong, S. Korea and
  10. 10. Taiwan of the 1970’s moved towards high skill societies in the 80’s and 90’s. (Ashton etal 1999) Therefore the argument that societies become trapped in a perpetual low skillsequilibrium stands controversial. It is not that important to study the high skills or lowskills equilibrium but what is more important is the path these societies have taken tomove from low skill to high skill societies.The Anglo-Saxon model assures the most degree of flexibility as compared to theContinental European and Japanese models of capitalism. Since flexibility is good foreconomic growth (Casey et al 1999) the Anglo-Saxon model of ‘individualism’ andcapitalism was considered the best. However, the debate has somehow concluded thatdespite being ‘better’, the Anglo-Saxon model has variations in practice betweencountries and also within them. Thurow (1994) and Reich have strongly suggested thatthe long – term source of competitive advantage within the developed world is ‘skill’.This concept formed the foundation of national policy making in UK and USA. Coupledwith this is the concept that high performance is an outcome of ‘a virtuous circle ofpartnership, high trust relations and skill development’ (Keep, 2000:11) However theresearch of Keep et al has strongly suggested that the key elements of Anglo-Saxonmodel of capitalism rather have a propensity to limit the investment of enterprises inskills and thus restrictively adapt the high performance workplace model.The first reason, as put forward by Keep et al for a weak adaptation of high performancemodel is the disconnect between people management policies and business strategy.Policy makers normally refer to HRM and Business Strategy text books which suggestthat Human Resource Management is about integrating and supporting strategicbusiness objectives with people management system thus linking training and skills withthe business plan and strategy. However the reality, as put forward by Purcell (1989) isthat ‘skills are normally a fourth order issue’ in a majority of UK organizations. First,second and third order is taken up by strategy, operations and HRM respectively.Moreover, skills and training issue have rarely been part of senior management agenda.In a landmark study done by Coopers and Lybrand in 1985 suggested that ‘fewemployers think training sufficiently central to their business for it to be a maincomponent in their corporate strategy; the great majority did not see it as an issue ofmajor importance’ (1985: 4)The second reason why high skilled, high performance workplace model lands intotrouble is that in order to be productive, its range of practices should be bundled intointerlinked, coherent and mutually supporting package. (Huselid, 1995; Pil andMcDuffie, 1996) This is a major undertaking and requires long term commitmentwhereas senior management is under pressure to demonstrate performance throughshort term achievements and bottom-line results. Under such circumstances, anunpredictable and risky process required for reshaping work practices is oftenneglected.
  11. 11. Streek (1989) has argued that enhancing the cost of labor and giving the rights ofconsultation and information to representatives of labor can help defy the cost-basedcompetitive strategies as this will bring the employee skills issue to the center of seniormanagement attention. Awareness of such rights by the employees may also lead tobetter skill usage through better job designs and high involvement work systemsrequiring workforce training. But this needs legislation and labor market regulation.Unfortunately UK and USA stand last in OECD labor market regulation. In another studycarried out by van de Velden and Wolbers (2001: 8), UK again hold the last position inemployment protection. This flexibility in legislation coupled with has allowed theemployers to exploit the employees in terms of employment security, non-standardforms of employment and training & development. The worst form of exploitation wasseen with for the ‘peripheral’ workers who received least or almost no training at allthereby decreasing their skills yet further. (Falstead, Ashton and Green, 2001: 22)National Competitiveness and Productivity (Total Factor Productivity including laborproductivity) has been coined as reference point terms for policy discussions on highskills. Sadly however, there is no common consensus among countries, societies andresearchers. Different factors are thought to contribute to national competitiveness withvarying degrees of contribution of each. Skills are also one of the many factorsconsidered to contribute to competitiveness but their role varies from acrossorganizations and industrial sectors. A comparison of different countries on Total FactorProductivity reveals that the US tops in the world because of its capital productivity andproductive labor across many sectors of the economy. The capital productivity ofGermany may be low but its manufacturing sector has high productivity. Likewise, thebanking sector of Japan is not fully developed but is compensated by the manufacturingsector in TFP which is moderately high overall. Strong work ethics and immensecapability for cooperation in Singaporeans helps them in ranking fairly high on the TFPtable despite the fact that their labor productivity is lower than Japan, Germany andUnited States. The capital productivity came to rescue UK (higher than Germany andFrance) offsetting the low labor productivity which was considerable lower than Japan,Germany, Singapore, France and United States.The pressures of globalization on skills and VET forced the stakeholders to find acommon ground for recognitions and acceptance of various ‘qualifications’ andexpertise imparted by the system. This was however an uphill and difficult task becausethe ways in which these systems work across boundaries and economies vary greatly.Firstly, the schools and their qualifications did not cover many occupations at the basiclevel especially in UK and USA. Secondly, it was difficult for US and UK to recognizethe work – based expertise and competence because of a lack of universally acceptedcurriculum as there was none. But the same situation in Germany was simple anddifferent because of the apprenticeship system that incorporated and integrated school
  12. 12. based learning with work – based experience. Thirdly, the ‘newer’ skills like team-working, information technology, communication and problem solving, considered nowto be key source of competitive advantage had been missed out. While the ‘outline’ ofproblems and solution in all countries may appear similar, the ‘details’ werecharacteristically different across countries. In the past few decades, UK and US haveaggressively tried to establish certification and recognition process with limited successand many complications.Another key issue relating to vocational qualification was reaching an agreement on acommon currency for understanding and measuring the qualifications. This is quite aformidable task and a concept of National Qualifications Framework (NQF) was coined.Young (2003) has identified six assumptions (Annexure IV) that can be the basis for aunified assessment of an NQF but they could not be implemented in totality. UKintroduced the national framework for vocational qualifications much earlier but the itsextension to all qualifications remained limited in England. (Scotland is an exception). Atwo pronged strategy involving colleges on one end and employer bodies combined withNCVQ on the other, helped Scotland reach its goals much earlier than its counterparts.Countries currently under study are primarily UK, South Africa, New Zealand, Germanyand France. There is a need however to extend it across more continents. The ‘ideal’framework as given above may be good in terms of theory, in practice however, nationalframeworks vary far and wide in their content, context and execution.And Finally: VET Policies are not Transferable!One of the implications of race towards globalization had been that a lot of policymakers try to find an easy way out to the problems at home by trying to ‘import’ thepolicies or ‘best practices’ of others. They tend to forget however that although themodels look attractive and implementable in terms of practices, delivery systems andtraining principles, their replication is impeded by cultural, societal and institutionalelements. (Turbin 2001, Young 2003) While studying a major initiative (FORCE –Formation continue’ en Europe) the impact of societal context on in UK and Germanyon transferability of learning practices was analyzed. It was found out that though thetwo societies looked similar from the outside, there were marked differences at thestructural and institutional level that limited the transferability to ‘general awareness’. Ina landmark study (Kearns et al 2000) involving five countries (Britain, US, Sweden,Germany and Netherlands), it has been revealed that all governments are attempting atlifelong learning culture by integrating educational, social and economic policies to fightsocial exclusion and improve competitiveness. The importation of policies from othercountries has not been successful.Conclusion:
  13. 13. We have seen above that for the last 70 years, various countries have adopted variousstrategies to reach one goal – the achievement of a high skills, high value added societythrough VET. Each country, however, adopted a unique strategy and model to suit theirenvironment, institutions and cultures. The key reason for success was an overallcommitment of all stakeholders (Industry, Government and Trainees) in defining andconsistently following a comprehensive and competitive strategy. The idea of auniversal VET model is still hanging in the balance because of challenges in reachingcommon definitions of assessment criteria, legislation, technology, institutions, skills,culture and priorities.References: 1. Acemoglu, D. (1993), ‘Labour Market Imperfections, Innovation Incentive and the Dynamics of Innovation Activity’, Paper presented to conference, The Skills Gap and Economic Activity, Center for Economic Policy Research, London. 2. Arnal, Elena; Ok, Wooseok & Torres, Raymond (2001), Part B & C of “Knowledge, Work Organization and Econominc Growth”, Labour Market and Social Policy – Occasional Papers No. 50, Paris: OECD, Directorate for Education, Employment, Labour and Social Affairs, Employment, Labour and Social Affairs Committee (JT00108963): pp8-39 3. Ashton, D. and Sung, J. (2000) The Growing Importance of Workplace Learning, Extract from Chapter 1 in Supporting Workplace Learning for High Performance Working, Geneva ILO: pp 11 – 22 4. Ashton, D. Green, F. Sung, J. James D. (2002), The Evolution of Education and Training Strategies in Singapore, Taiwan and S. Korea: A Development Model of Skill Formation, Journal of Education and Work, Vol 15, No. 1, pp 5 – 30 5. Ashton, D., and Green F. Education, Training and the Global Economy, Cheltenham: Edward Elgar: pp 11 – 21 6. Ashton, D., Sung, J. and Turbin, J. (2002)“Towards a Framework for the Comparative Analysis of National Systems of Skill Formation”, International Journal of Training and Development, Vol 4 No. 1: pp8-25 7. Askenazy, P. (1999) Technological and Organizational Innovations, Internationalization and Inequalities, PhD Dissertation, EHESS, Paris, January. 8. Becker, G. S. (1964), Human Capital, Columbia University Press. 9. Booth, A. Snower, D. (eds.) Acquiring Skills: Market Failures, their symptoms and policy responses, Cambridge, Cambridge University Press 1996. 10. Braveman, H. (1974), Labour and Monopoly Capital, New York, Monthly Review Press. 11. Calloids, F. (1994), “Converging Trends amidst Diversity in Vocational Training Systems, International Labor Review, 133, 2.
  14. 14. 12. Casey, B., Keep, E., and Mayhew, K. (1999), Flexibility, Quality and Competitiveness, National Institute of Economic Review, 2/99, No. 168, 70-8113. CLMS Reading 276: Layard, R. “The Welfare Economics of Training”14. Coopers and Lybrand Associates. 1985. Challenge to Complacency: Changing Attitudes to Training, London: Manpower Services Commission.15. De Moura Castro, C. (1991) Five Training Models, ILO Training Policies Branch, Occasional Paper no. 9, Geneva: ILO16. Eraut, M., Alderton, J., Cole, G., Senker, P., (1998) Learning from Other People at Work, in Coffield, F., (ed.), Learning at Work, Bristol, Policy Press.17. European Commission, Key Data on Vocational Education in Europe (1997), Directorate-General XX11, European Commission, Luxembourg.18. Ewart Keep, Globalization, Models of Competitive Advantage and Skills, SKOPE, University of Warwick, Research Paper No.22, Autumn 200119. Falstead, A., Ashton, D., (2000) Tracing the Link: Organizational Structures and Skill Demand, Human Resource Management Journal, Vol. 10, No. 3: pp5 – 2120. Felstead, A. and Ashton, D. (1994) International Study of Vocational Education and Training in the Federal Republic of Germany, France, Japan, Singapore and the United States, Leicester, Center for Labor Market Studies.21. Freeland B. (2000) International Comparison of Vocational Education and Training, Leabrook: NCVER22. Furth, D. (1985), Education and Training after Basic Schooling, Paris: OECD23. Furth, D. (1985), Patterns of Provision, in OECD, Education and Training After Basic Schooling, Paris, OECD, Ch. 2.24. Gillani, S., (1994) The Development of Technical and Vocational Education in Pakistan – A Case Study in Quality Improvement, Case Studies on Technical and Vocational Education in Asia and the Pacific, Royal Melbourne Inst. Of Tech., Australia.25. Green, A. (1991) The Reform of Post -16 Education and Training and Lessons from Europe’, Journal of Education Policy 6 (3 July – September): 327 – 3526. Green, A. with Sakamoto, A. (2001) “Policy Arguments for High Skills”, Chapter 2, Models of High Skills in National Competition Strategies, in Brown, P., Green, A., and Lauder, H. High Skills: Globalization, Competitiveness, and Skill Formation, Oxford: Oxford University Press27. Green, A., Sakamoto, A., (2001), Excerpts from Chapter 2 in “High Skills”, Oxford: Oxford University Press: pp 67 – 89.28. Huselid, M., 1995, “The Impact of Human Resource Management Practices on Turnover, Productivity and Corporate Financial Management Practices, Academy of Management Journal, Vol. 38, No. 3, 635 – 672.29. ILO (1998) World Employment Report 1998-9, Employability in Global Economy. How Training Matters? Geneva: ILO
  15. 15. 30. ILO (1998), Chapter 3 in World Employment Report 1998-99: Employability in Global Economy: How Training Matters, Geneva, ILO: pp67-8331. Kearns, P., Papadopoulos, G., (2000) The Influence of Culture, in Chapter 2 in Building an Learning and Training Culture: The Experience of Five OECD Countries, Australia: National Center for Vocational Education Research (NCVER): pp 10 – 1732. Keating, J. Medrich, E., Vollkoff, V. & Perry, J. (2002), Chapter 2 in Comparative Study of Vocational Education and Training Systems: National vocational Education and Training Systems Across Three Regions Under Pressure of Change, Australia: National Center for Vocational Education Research (NCVER).33. Keep, E., and Payne, J. 2001 “Policy Interventions for a Vibrant Work-based Route – or when Policy hits Realit’s Fan (Again), Paper presented to ESRC Working to Learn Seminar Series, Leeds University, February, (mimeo)34. Kerr, C. Dunlop, J. T., Harbison, F. H. and Myers, C. A. (1962), Industrialism and Industrial Man: The Problems of Labor and Management in Economic Growth, London, Heinemann35. Nolan, P. (2001) Lessons from Historical Experience, in China and Global Economy: National Champions, Industrial Policy and Big Business Revolution, Basingstoke: Palgrave36. OECD, (2002), Working Party on Employment and Unemployment Statistics, ‘Harmonization of Training Statistics’, Paris, OECD 24 July 200237. Pil, F. K. and McDuffie, J. P. 1996. The Adoption of High Involvement Work Practices’, Industrial Relations, Vol. 35, No. 3, 423 – 45538. Purcell, J. 1989, The Impact of Corporate Strategy on Human Resource Management, in Storey, J. (ed.), New Perspectives on Human Resource Management, London: Routledge, 67 – 9139. Reich, R., 1983, The Next American Frontier, Middlesex: Penguin40. Ryan, P. (1995) Adult Learning and Work: Finance, Incentives and Certification, in Hirsch D. and Wagner D. (eds.): What makes Workers Learn: The Role of Incentives and Adult Education and Training, Cresskill, NJ, Hampton Press.41. Shah, I. H. Ajmal, M. Rahman, F. Akhter, M. N., A Comparative Study on Vocational Training Structure of Pakistan with British and German Model, International Journal of Business and Social Science, Vol. 2, No. 1, pp 162-16942. Smith A. (1888), An Inquiry into the Nature and Causes of the Wealth of Nations, London, Longman and Co.43. Streek, W. (1989), Skills and the Limits to Neo-Liberalism: The Enterprise of the Future as a Place of Learning’, Work, Employment and Society, Vol. 3, No. 1, 89- 10444. Thurow, L. (1994), New Game, New Rules, New Strategies, RSA Journal, Vol CXLII, No. 5454, November, 50-56
  16. 16. 45. Turbin, J., (2001) Policy Borrowing: Lessons from European Attempts to Transfer Training Practices, International Journal of Training and Development, 5:2, ISSN 1360-373646. United Nations International Development Organization (2001) Integrating SME’s in Global Value Chains: Towards Partnership for Development, Vienna: UNIDO47. Van de Velden, R. K. W., and Wolbers, M. H. J., 2001, The Integration of Young People into the Labor Market Within the European Union: The Role of Institutional Settings’, University of Maastricht, ROA, (mimeo)48. Wolff, E. N. and Baumol, W. J. (1989), Sources of Post-war Growth of Information Activity in the United States, in Osberg, L., et al. (eds.) The Information Economy: The Implications of Unbalanced Growth, Institute for Research on Public Policy, Halifax, pp. 17-4649. Young, F. D. M, (2003) National Qualifications Framework as a Global Phenomenon: A Comparative Perspective, Journal of Education and Work, Vol. 16, No. 3.
  17. 17. Annexure 1: Sources of Market FailureThe main sources of market failures are: 1. Capital Market Imperfections: When the social discount rates are much lower than private discount rates for individual decisions on training, there can be serious difficulties faced by firms for borrowing finance to invest on human capital. 2. Risk: The uncertainty of return on training dissuades investment on training. To minimize the risk, it is sometimes proposed to spread the risk over the pool of taxpayers. 3. Misperceptions: If the parents of the trainees were untrained, they may expect a lower rate of return on training investment and thus abstain. 4. Externalities of Market Size: Abundance of trained people relevant to a specific industry can help substantial growth of that industry an improve its competitiveness in the marketplace. 5. The Tax System: has the capacity to make the social rate of return on education substantially higher than the private rate of return. 6. Unemployment of Less Skilled Workers: The chances of an unskilled labor staying unemployed are more than an skilled labor. This increases the burden on state which loses on productivity as well as unemployment. But there are strong arguments against training of such a force through tax finances. Nevertheless, an equitable system to provide training to everyone is supported. 7. Monopsony: This is where the firms hiring and training employees cannot retain them because of their deficiencies in capacity to retain the trained workforce and exploit their true potential. These trained people are then used by other firms for their benefit.
  18. 18. Annexure IIThere are 6 major changes which will have the most impact on Vocational Educationand Training. 1. International trade is growing rapidly. It is estimated that global trade is almost one fourth of global GDP but all societies are not participating in it equally. The service sector has recently shown more growth than the manufacturing sector (UNIDO 2001: 8) which was primarily coming from the developed countries. Developing countries are also major contributors of manufactured goods but this is primarily restricted to Asia. 2. The flow of capital (FDI) was mainly towards China because of low cost labor. Instead of going into new production activities the flow of capital was more towards mergers and acquisitions. 3. Advances in Information Communication and Technology (ICT) has facilitated the formation of global markets 4. Non-tariff barriers have been removed and tariff rates have been lowered. 5. Production has been decentralized and moved to different parts of the world. 6. High involvement/performance ways of working have set in.
  19. 19. Annexure IIIThe Impact of Change on a National System – The Case of PakistanPakistan inherited negligible TEVT facilities at the time of its creation in 1947 whichincluded two few vocational institutions and a couple of engineering colleges. Theeducation policy aimed at doubling the number of polytechnic institutions, colleges oftechnology and vocational institutions from 45, 11 and 400 respectively still cannotmake a big difference in a population of 160 million people out of which about 70% arebelow the age of 35 years. (Gillani 1994) According to the constitution of Pakistan,federal government is responsible for policy planning and overall guidelines to ensureuniformity in curricula, text books and standards of education. Interpretation andimplementation of these policy guidelines and projects is the responsibility of theprovincial governments. Each institution is independent in its objectives and trainingprograms and are free to choose the range of duration, content, structure, entryqualifications and modes of training.The polytechnics impart training for the technicians by offering a three year postmatriculation (high school – 10 years of schooling) diploma of associates Engineering(DAE) in different areas of expertise. Another two year course is offered by Colleges ofTechnology for these diploma holders. Commercial training institutes are dedicated totraining in commerce and offer one year post matriculation course C. Com and a furtherone year leading to D. Com taking candidate to B. Com and M. Com in another 2 and 4years respectively. As Agro Technical Scheme, prevocational school level training isoffered school level.The industry, being the end user of the human output of these technical educationsystems is not very satisfied with general quality of its students which they attribute tothe poor quality of its teachers. In order to cope this challenge, a network of teachertraining institutions has been established. However, the number of trained teacher stillremains low due to the shortage of resources and the relieving of working teachers bytheir respective institutions for long periods of training.It is estimated 46 per cent of teachers in technical schools have no teacher training.Remaining 54 percent have training of varying lengths. More than half of the teachersare teaching students with an equivalent qualification e.g. a diploma holder teaching adiploma holder. Curriculum is also outdated with little or no exposure to emergingtechnologies. Even when the teachers are promoted to administrative and decisionmaking positions, they are not given any formal training.The VET system in Pakistan is close to the “institutional Model” whereby the training isprovided by the government without active involvement of the industry. Though industries arerepresented at some level, the curriculum is set by a government institution. Simultaneouslythere is an informal sector of training, resembling more to the “Market Model”, where markets
  20. 20. and the industry train only the much needed skills to the trainees which can potentially have aquick impact on productivity, output and performance.In 1973, a “Dual System” was launched in the biggest province of Punjab with basic training inthe Apprenticeship Training Centers and hands-on training in the industry. This worked verywell in the beginning but the results were fairly depressing. There were many reasons for this: Itwas difficult for the training institutions to hire trained craftsmen to impart training because theindustry presented lucrative offer for their career. Some industries opted out of this programbecause they did want the apprentices to experiment on their expensive machines. Thus Pakistanwas another example of and ‘imported’ VET model failure because of differences in skills,technology and culture.Annexure IV
  21. 21. Young (2003) has identified six assumptions that can be the basis for a unifiedassessment of an NQF: a) Describe all qualifications against a single criteria b) All qualifications should be ranked on a single hierarchy c) All qualifications should be assessed on the basis of ‘learning outcomes’ d) Uniform and transparent ‘credit rating’ system should be introduced e) Framework should provide a benchmark against other learning and qualificationsIt should be an instrument for meritocracy