GIZ study “Financing of VET Advisory Approaches
Stefan Hummelsheim
Competence Center « TVET and Labour Market », GIZ
Brussels, 27th November 2014
Overview
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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
Financing
Costs
16 Länder funding
revenues, no fees
Staff, material
Contract
No contract
and
Initial vocational training
municipal Self-responsible enterprise funding
Staff,
material
and
apprentice
remuneration
Private law contract between enterprise
and apprentice
General Integrated Approach
Increased
employability
TVET
(Supply of
labour)
Labour market
matching
mechanisms
Labour market
strategies +
instruments
Economic policy
Productive and
sustainable
employment
(Demand of
labour)
Private
sector
development
General Integrated Approach - 2
Increased
employability
TVET
(Supply of
labour)
Specific Advisory Approach
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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 Germany
stefan.hummelsheim@giz.de