Leveraging Partnerships in Technical and Vocational Education and Training Development
Keynote Speech by
Rajat M. Nag
Managing Director General
Asian Development Bank
At the International Symposium on Public-Private Partnerships in Technical and Vocational Education and Training (TVET)
1 December 2008
Colombo Plan Staff College for Technician Education, Manila, Philippines
I. Introduction
HE Rajeet Mitter, Dr. Mona Valisno, Dr. Shyamal Majumdar, Director General of SPSC, Members of the CPSC Governing Board, Dr. CK Basu, distinguished guests, ladies and gentlemen:
I am grateful for the invitation to deliver special remarks on behalf of the Asian Development Bank at this very timely and relevant symposium.
As you know, the past few decades have been a time of unprecedented economic growth and poverty reduction in the Asia and Pacific region, and dramatic improvements in the standard of living. For example, per capita income in developing Asia, in real terms, grew from less than $170 in 1967 to over $1,000 by 2005. Since 1990, the proportion of people living in absolute poverty has declined from more than one-third to less than one-fifth.
Despite this progress, however, an enormous poverty challenge still lies ahead. More than 1.7 billion Asian people still live below the $2 a day poverty line, including about 600 million still struggling at $1 a day. And while we celebrate the shining face of Asia - its economic success and growing middle-classes - this other face, the face of Asia's poor, is becoming starker as income and opportunity gaps widen.
The only way to close these gaps is to make the development process more inclusive. Investments in and access to good quality education and skills training are critical for achieving this goal. But these investments cannot and should not come from the public sector only, especially at a time when governments are already stretched in trying to meet the need for basic education and other important services. Thus, it is a pleasure for me to speak on this issue, based on ADB's long experience as a regional development partner.
II. TVET and Development
From the broader economic development perspective, strategic priorities for investment in education and training in a country should correspond adequately to the needs arising from the level of economic development and labor market dynamics of that country, and from the need to support the process of that country moving to the next development level. Often, for political reasons, there is a desire to invest extensively, too early, in tertiary and higher education levels. It is important to prioritize investment in technical and vocational education and training (TVET) to help prepare a basis for further economic development, and for corresponding demand for investing in higher levels of education.
In the early stages of a country's economic development (characterized by subsistence and factor driven growth), basic education and adult education are priorities, together with progressive development of a basic skills formation system in TVET for skilled blue-collar workers.
Universal secondary education, and worker upgrading and technician training become TVET priorities in countries at the investment driven growth-stage, as the importance of workers with only basic skills declines. In the innovation driven growth stage, extensive investment in tertiary and higher education become priorities, along with research and science & technology development.
These stages are not self-contained. The economies of countries can fall into more than one stage at once, and overlaps occur. However, the needs and potential for public-private partnerships in TVET must continue to be explored keeping in mind these stages and dynamics. The more economies and labor markets evolve, the more comprehensively we must address the issues of relevance and sustainability. The public sector cannot solve such issues alone, without consultation with and help from private sector partners.
In the long run, sharing the cost of training with employers and trainees is an important means of sustaining an effective TVET system. This requires formulating and implementing regulations for revenue raising and accounting by TVET institutions.
But the demand for partnerships in TVET is not driven by financing and cost-sharing factors alone. Rather, it is increasingly driven by the need for the quality and relevance of TVET to respond to the country's economic and social development needs. TVET alone does not create new job opportunities. It is time for a paradigm shift from the supply driven model to the market driven TVET model.
Public-private partnerships are essential at all stages to help create job opportunities, to engender ownership and to make TVET sustainable. For example, changing labor market demands and new technologies in TVET necessitate periodic curricula updating and regular in-service training of trainers to upgrade their skills. Involving the private sector as a partner in this process, and in training provision, will ensure that the system remains relevant to market needs and standards.
So what are the ingredients that will ultimately make such partnerships successful? Let me offer a few thoughts, drawn from our own experience in this area.
III. Dynamics of partnerships
First, it is important to getting the organization structure right, at all levels. Many of the challenges in building partnerships with the private sector derive from fragmented, inappropriate, and ambiguous government organizational structures. If legal mandates overlap, for example, coordination between line ministries, such as ministries of education and labor, may be unclear.
Second, the sustainability of TVET investments requires close attention and coordination among partners, particularly in poorer countries. "One shot" investments and projects simply do no work; a long-term focus is essential. Given the complexity of the TVET sector, a single investment or project, no matter how well designed and implemented, is not a sustainable approach. Instead, a series of intertwined and coordinated investments--with consistent core objectives--is important, aiming over a longer period to make an impact on key TVET indicators while strengthening government capacity to manage the subsector. These investments should be supported by substantive policy dialogue between governments and private sector partners, and development of a framework for the subsector to be implemented over a decade or more, supported by ongoing financial inputs.
For example, in Sri Lanka, we consolidated and integrated a series of ADB projects into an integrated whole. This process included the establishment of a vocational qualification framework, and the institutionalization of competency-based training and quality assurance, accreditation, skills standards, and assessments. Involvement of the private sector in the process facilitated the adoption of new policies by the labor market partners. In the Maldives and Bangladesh, our projects have similarly brought government and private employers together to identify occupational areas where training programs are needed.
Third, the roles of those responsible for policy planning and those responsible for action, for example training provision, should be clearly separated. Increasingly, the private sector should be allowed to play the role of training provider in TVET, while governments should pursue effective policies and regulatory frameworks to ensure high quality and relevance of the training provided. Unfortunately, in many developing countries in the region these complementary roles are not yet in place for TVET. Too often governments through their line ministries continue to play both roles. As a consequence, training programs have remained too supply-driven, rigid, and long, whereas they should be demand-driven, cost-efficient and flexible enough to effectively meet the needs of evolving labor markets.
Fourth, where possible, TVET systems should be governed by apex organizations, such as national training authorities. Apex organization should be based on solid partnerships among stakeholders and should be driven by those who represent the demand for skills - in other words, employers. Apex organizations should have executive authority to generate labor market information; set priorities, policies, and directions; link training supply with demand; coordinate training providers; and allocate resources. Such organizations should concentrate on policy and regulation, and abstain from direct administration of individual institutions and delivery of education and training. The Skills Development Authority in the Philippines is a good example of this approach.
Fifth, the nature of incentives in many public TVET systems in the region has contributed to inertia. Budgets are provided regardless of performance. Facilitating effectively public-private partnerships in TVET needs a change of mind-set in public administration, and in society. Incentives should be changed for those managing skills development, and institutions should be allowed to retain and use resources generated. They should be encouraged to introduce or increase user fees, but bearing in mind equity implications. Managers of training institutions should be given authority through devolution, along with accountability for results. Support should be provided for establishment of competitive training funds that combine external resources with domestic resources. Such funds, which are based on a partnership, have potential to stimulate innovation and better performance. Singapore's training funds stands out as an instrument for leveraging partnership for reforms in skills development.
Finally, I believe it is time to look at these issues not only from a national perspective, but also from a regional, if not global perspective. Asia's growing interdependence presents a compelling case for regional cooperation in many areas, and not least in education and training. Increasing labor mobility calls for cross-border collaboration and harmonization of qualification and competency frameworks, quality assurance, and accreditation. Such 'bold' moves will not happen overnight, and obviously certain subregions in Asia provide more opportunities for such development than others. In any case, awareness building and sharing country level experiences on TVET these issues is an important catalyst. In this regard, I commend the efforts of Colombo Plan Staff College for Technician Education in efficiently organizing and symposiums and training events on timely topics, such as the symposium today.
IV. Concluding Remarks
In closing, it is important to note that the serious and increasing shortage of technical and vocational skills is no longer limited to operations of multinational companies in the region. It is also affecting increasing number of local companies aiming to diversify their operations and expand in the region and globally. Clearly, tackling this situation effectively calls for leveraging public-private partnerships for improving the quality of skills training and its delivery.
The Economist's recent article indicates that skills shortages have persisted in Asia even during the current times of increasing lay-offs of workers. Thus, the global financial crisis provides an additional timely reason to leverage resources through innovative and more effective partnerships for skills development. As South Korea demonstrated during the Asian Financial Crisis in 1990s, investment in education and training has high rates of return overall, and plays a particularly important role in uplifting economies during slowdown and recession.
There is much to do to close Asia's development gaps and fulfill its enormous potential. I am confident that if we each do our part - governments, development partners, civil society, educators and the private sector, among others - we can ensure a future of continued growth and opportunity for the people of Asia and the Pacific.
I wish every success for your important symposium.
Thank you.
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