Sustainable Vocational Training Toward Industrial Upgrading and Economic Transformation

A Knowledge Sharing Experience

• Publisher: Asian Development Bank
• Year: 2014
• ISBN:
  9789292546076
• Topic: Business
• Subtopic: Business Education
• Index: Business

This report summarizes results of the workshop "Sustainable Vocational Training toward Industrial Upgrading and Economic Transformation" held from 2 to 5 December 2013 in Beijing and Guangzhou, the People's Republic of China (PRC). A joint initiative of the PRC and the Asian Development Bank (ADB), the workshop---attended by more than 90 participants from 16 countries---is part of the annual PRC-ADB Knowledge Sharing Platform and was supported and organized by the Regional Knowledge Sharing Initiative. The report summarizes workshop discussions on (i) best practice and models for supporting sustainable vocational training; (ii) the role of the government, private sector, enterprises, and vocational training schools; (iii) improving vocational training in a rapidly changing world; (iv) financing vocational training; and (v) policy environment for vocational training governance and management.

1 Overview

1.1 Forum Background

Developing relevant skills for industrial upgrading and economic transformation is a key challenge facing many growing and middle-income countries. The Asian Development Bank (ADB) and the People’s Republic of China (PRC) conducted a knowledge sharing event to bring together policy makers and practitioners around the topic of technical and vocational education and training (TVET) for meeting national economic objectives. The focus of the knowledge sharing event was on (i) best practice and models for supporting sustainable vocational training; (ii) the role of the government, private sector, enterprises, and vocational training schools; (iii) improving vocational training in a rapidly changing world; (iv) financing vocational training; and (v) policy environment for vocational training governance and management. The first part of the event took place in Beijing on 2–3 December 2013. Demands and policies for improved vocational training in a changing world and good practices of developed and developing countries were discussed with the goal of identifying opportunities for supporting TVET in the PRC and responding to skills challenges in other Asian countries. The second part of the event took place on 4–5 December 2013 and consisted of visits to training facilities in Guangdong province, showcasing good practices and sharing lessons with practitioners.

The event “Sustainable Vocational Training toward Industrial Upgrading and Economic Transformation” is part of the annual PRC–ADB Knowledge Sharing Platform and was supported and organized by the Regional Knowledge Sharing Initiative, a joint initiative between the PRC and ADB.

More than 90 participants from 16 countries participated in this event.

1.2 Forum Introduction

The forum opened with an overview of the growing importance of the PRC in the global economy. This economic transformation is leading to an increasing emphasis on rebalancing rural and urban growth and moving from a manufacturing base to a high skills value-added economy. Human resources are replacing natural resources as an important indicator of a country’s wealth. The PRC’s rapid transformation offers greater opportunities for the country to continue this successful development, underpinned by new reforms in the TVET system. Emerging challenges were well-recognized in the third plenary session of the 18th Communist Party of China Central Committee, and the decision to further reform the TVET system was clearly defined. The PRC’s increased efforts to promote environmentally sustainable and inclusive growth, South–South cooperation, and TVET reform came together in this knowledge sharing forum on TVET industrial upgrading and economic transformation.

Rural and urban income disparities compound the challenges that PRC faces and create extra complexity for education in general. The forum heard that there are three key issues in education:

(i)	in general basic education, ensuring universal completion and not just universal enrollments, especially for the children of migrant workers;
(ii)	improving the quality of education (particularly in rural areas), teaching resources, and facilities; and
(iii)	addressing the special education needs of migrant workers’ children.

While participation at the tertiary level has expanded from 3% to 24%, it is still lower than the global average of 30%. Expansion at the higher education level will require public–private partnerships (PPP) and reforms to improve quality and internal efficiency.

Another key challenge is the improvement in the quality and labor market relevance through the introduction of competency standards, competency-based training, and the promotion of school and industry-based collaboration. There is a need to further align TVET graduate outcomes to the industry’s demand for higher skill levels. Currently, there is a mismatch between the skills required in industries and the skills of graduates entering the labor market.

Having appropriate human resources has been one of the country’s key constraints in recent times. There is a need to adopt new technologies and innovation in moving from manufacturing to an emphasis on services. An inclusive approach to skills development should include schools increasing their overall capacity to deliver technology skills to everyone for an appropriately skilled workforce.

ADB fully appreciates the importance of the comprehensive reform plan adopted by the PRC in its quest to become a prosperous nation by 2020. ADB has been supporting educational reform in the PRC for about 20 years. Since 1993, ADB has supported the central and regional governments’ efforts to strengthen institutional capacity and policy support. The first loan support in the education sector was in 2013 in Hunan Province.

The challenges brought about by the changing labor market create specific demands on TVET, in particular:

• the need for elderly care due to the rapidly changing demographic profile of an aging population;

• sustainability, greening of the industry, and green jobs;

• developing pathways between the TVET sector and higher education sectors;

• projects and initiatives that promote regional cooperation generally and in TVET; and

• the sharing and demonstration of good practices for the benefit of the region.

ADB expressed its sincere thanks to the Government of the PRC and the Ministry of Finance for hosting this important initiative in establishing a knowledge sharing platform on TVET industrial upgrading and economic transformation for the benefit of all ADB member countries.

1.3 Forum Themes

A number of common themes were discussed by the speakers during the forum, including the effects of an aging population on the future workforce, rapidly changing technology, and globally connected economies.

A common theme was that it takes decades to develop a multilevel TVET system and governments require a high level of commitment to TVET. It is important to identify what each country’s culture can accommodate in the design of its TVET system and how a country involves and engages the industry in TVET. Policy integration is an important area where multiple agencies are involved. There is an oversupply in the overall market but shortages in key areas, which is a challenge.

A number of important questions were raised during this forum. What kind of TVET management structure is needed to facilitate a closer link to economic development? What kinds of TVET institutional reforms are needed and how do we develop a unified single administrative arrangement for TVET, given there are often multiple government agencies involved in TVET delivery? How do we make sure national TVET policy is implemented as uniformly as possible in regions and states? How can we better align, integrate, and ensure better coordination among different government agencies to avoid duplication of effort? How do we increase accountability linked to incentives and measure the performance level of skills utilization? What needs to be in place to scale up and increase flexibility between higher education and TVET? There is a need for policy integration—e.g., green jobs and TVET. What are the key features that make the systems responsive?

From these common themes, the speakers identified key points relevant to TVET reform. These key points have been grouped under the following headings:

General

• There is a mismatch between the demand for high-level skills and the oversupply of low-level skills.

• Education prepares people for higher levels of learning, but more importantly, it orients learners and workers toward the world of work.

• Improving the status of TVET is very important, as going to university is still a family honor.

• There is a need to raise the status of TVET within the community to attract students from a wide range of backgrounds.

Policy

• Competitiveness in the main industry may rely upon the competitiveness of the supply chain industries. Skills development—upstream and downstream—is valuable to competitiveness of an industry sector.

• An investment in increasing skills and knowledge intensity in small and medium firms is required at a policy level.

• A central coordinating body overseeing TVET is a similarity shared by country examples presented as good practice.

• Skills development policy integration is an important area where multiple agencies are involved.

• The three critical intersections of enrolling in postsecondary education, building skills, and finding a job require additional focus.

• Research from the McKinsey Center for Government found that the three factors of successful education programs are:

employers and education providers actively stepping into each other’s worlds;

innovation in delivery of education and training; and

a system design that works.

• Making TVET work at a system level requires new incentives and structures. The initial answer from McKinsey research is that there are three pieces to this.

First, there is a need for better data collection and dissemination to youth, providers, and employers. For youth, they need to know what programs are available, what jobs they lead to, and what the career prospects are in those fields. For providers, they need to know the needs of the labor market for both curriculum design and capacity planning. And for employers, they need to know how effective different providers are in supplying them with the talent they need.

Second, there is a need for more sector-wide collaborations, where large employers come together to develop solutions.

Finally, there is a major role to be played by system integrators.

Less developed countries will need to adju...