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GIZ study “Financing of VET - Advisory Approaches
Stefan HummelsheimCompetence Center « TVET and Labour Market », GIZ
Brussels, 27th November 2014
Overview
• Reference Points• Selected Challenges• General Integrated Approach• Specific Advisory Approach• Messages
Reference Points
• In particular: GIZ Study “Advisory approaches for TVET Financing”. Guidelines for program planning and implementation 2013 - in particular
• In addition: Delegates asking for the Transfer of the dual system, Integrated approach, Empirical evidence from GIZ program implementation
Selected challenges
• On the supply side: (Initial) TVET System in developing countries are mostly state and school driven, underfinanced with low quality and labour market orientation, high informal sector structure, many micro and small enterprises
• On the demand side: dramatic high birth rates, push on the upper secondary level
• Intensive search for alternative and capable TVET Funding Systems
Selected challenges - 2
• Delegations asking for the “Transfer of the German dual System of Initial TVET”
• Delegates do have high expectations• very low youth unemployment rate (integration
function)• high transition into the labor force (allocation function)• market oriented production of qualified skilled workers
for the needs of the enterprises (qualification function)
Selected challenges - 3
• Delegates are much surprised concerning the financing structure of the dual system
Basic aspects Part-time vocational education Initial vocational training
Financing 16 Länder funding and municipal
revenues, no fees Self-responsible enterprise funding
Costs Staff, material Staff, material and apprentice remuneration
Contract No contract Private law contract between enterprise and apprentice
TVET
Labour market strategies + instruments
Labour marketmatching
mechanisms
Productive and sustainable
employment
(Demand of labour)
Increased employability
(Supply of labour)
Private sector develop-ment
Economic policy
General Integrated Approach
TVET
Increased employability
(Supply of labour)
General Integrated Approach - 2
Specific Advisory Approach
• Political and Strategic Consulting• Initiation of stakeholder processes• Advice on cost-benefit analyses• Capacity development including management
consulting• Participation of the economy in decision-making
processes• Advising TVET institutions for enterprise cooperation
Specific Advisory Approach - 2
• Initiation of awareness about the benefits of Vocational Training for enterprises
• Financial cooperation with the donors• Advising concerning training fund models
Messages
• There is a rationality problem between the single enterprise behavior and the needs of the society and economy
• Simple copy process of the Dual System neglect the historical grown commitment of the enterprises and the single enterprise funding scheme
• Need to initiate a benefit debate instead of a cost debate, training is an investment
• Net benefits normally after the training phase
Messages - 2
• Sharing the financial burden could be solution, but it depends on the specific conditions
• Guiding questions• Stable social consensus that the social rationality is
more important?
• Is there a commitment of the companies to support the levy financing system?
• Is the design of the public authority efficient and effective and does not create new competition failures?
Many thanks for your attention
GIZ TVET Headquarter [email protected]