Why is the Swiss Apprenticeship System held in
such high regard?
Introduction
Dr Bill McGinnis CBE,
NI Adviser on Employment and Skills
Office of the Northern Ireland Adviser on Employment and Skills
Department of Economics
5
ingredients for a
successful
apprenticeship system
Stefan Wolter
Centre for Research in Economics of Education
29.9.2014, Belfast
Department of Economics
1
APPRENTICESHIP IS NOT FOR
DUMMIES
3
VET for dummies
Vicious circle
Department of Economics
Low
achievers in
CTE/VET
Stigmatised
form of
education
Low
engagement
of firms
Low quality
of training
4
VET for all talents
2/3 of all students choose an apprenticeship
Department of Economics
Source: Swiss Education Report 2014
5
How can we attract talents into VET?
VET: the need for permeable education systems
Department of Economics
Permeability between
sub-systems
Professional
education
Universities
of applied
science
Dual and school based vocational education
Academic
universities
University
entrance
diploma
Compulsory schooling (9 y)
6
The «US» view of skills
Hierarchy of skills
Low
Middle
Department of Economics
High
7
The Swiss-German – view:
A mix of skills of equal importance
Socialemotional
skills
Vocational
skills
Department of Economics
General
skills
8
Department of Economics
2
APPRENTICESHIP IS STEERED
BY REAL EMPLOYERS
9
Strength of employers’ influence on
content, curricula and jobs
Department of Economics
18
16
14
12
10
8
6
4
2
0
Source: Calculations from OECD 2010
10
Employer(s): Collective skill formation
vs. single firms decisions
Department of Economics

Employers decide on everything, but there is a price to pay

The government never talks to single employers!

Collective skills formation is the condition for:




Common definitions and standards across the industry
Long term visions vs. short term interests
Quality assurance by peer-review of skills acquisition
Portability of skills (labour market mobility) (2/3 of the apprentices
leave their training company after the apprenticeship)
11
Department of Economics
3
APPRENTICESHIP PAYS OFF
FOR EMPLOYERS
12
Cost-Benefit –
The simple model
Benefit
Cost
Department of Economics
Average cost and benefit per apprentice
for training firms in Switzerland (2009)
Per apprentice
and year (in
Euro)
Per apprentice
and year (in
Euro)
3y
4y
Gross costs
72’012.5
96’391.7
Productive
contribution
79’273.3
103’380.8
Net benefit
7’260
6’989.2
ROI
10.1%
7.25%
Department of Economics
Source: Strupler & Wolter, 2012
Cost-Benefit –
The augmented model
Department of Economics
Benefit
Cost
Reduced
hiring costs
Machinery,
tools, etc.
Skilled work
(x productivity)
Trainer
salaries
Unskilled work
Apprentices
salary
Realised benefits in US$
Recrutive opportunity benefits per
trained apprentice (2009)
Department of Economics
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
1-9
10-49
50-99
Firm size
>100
Source: Strupler & Wolter, 2012
Training companies train because it is
profitable – Non training companies do not
train because it is not for them
Department of Economics
80000
Training firms
Non-training…
70000
In Euro of 2005
60000
50000
40000
30000
20000
10000
0
-10000
Gross-cost
Benefit
Net-Cost
Source: Wolter et al., German Economic Review, 2006
Department of Economics
4
A MARKET - WITH A SYSTEM
MONITORING
18
A volatile world needs systemmonitoring
Department of Economics
Source: Swiss Education Report 2014
19
Early decisions with good matches
(~ 230 different occupations)
Department of Economics
Source: Swiss Education Report 2014
20
High levels of satisfaction
Department of Economics
Source: Swiss Education Report 2014
21
Department of Economics
5
THE COMBINATION OF
APPRENTICESHIP AND
ACADEMIC EDUCATION
CREATES A WIN-WIN-SITUATION
22
The advantages of a skill mix in an
economy
• VET+ academic Education
• preserves industrial
production and
manufacturing and fosters
• «incremental innovation»
• as well as quality leadership
Industry/
manufacturing
Economy/
Public Finances
• creates competitiveness
• reduces fiscal spending
• and generates high fiscal
revenues
Department of Economics
• allows to pay for academic
excellence which
• leads to «radical
innovations»
Education/
Research
23
Geographical proximity leads to
growth and innovation: Myth or truth?
Department of Economics
“A growing number of American companies are
moving their manufacturing back to the United
States - Innovation suffered from the distance
between manufacturing and design, and quality
became a problem too.”
(The Economist, 19.1.2013)
24
Average public costs for VPET training
and the share of company based training
Department of Economics
Source: Swiss Education Report 2014
Excellence in all sectors of the
education system (if focused)
Department of Economics
Source: Swiss Education Report 2010
26
Summary
Department of Economics
1) Apprenticeship training must be attractive also for
high achievers
2) Apprenticeship needs collective employers
engagement
3) Apprenticeship must pay off in the short run
4) The invisible hand is not enough (monitoring)
5) Apprenticeship is an integral part of the education
system generates advantages for everyone
27