Few policy analysts apprentice to bakers, stone masons or electricians, which is perhaps why they seem to find vocational education a dull subject of study.  But having woken up to the fact that OECD countries can never compete with China, India or Southeast Asia in the provision of cheap, unskilled labour, they realise that the only chance of staying in the game is to shift the emphasis from low cost to high quality, and to tend the middle ground between university education and unskilled labour: vocational educational training (VET).

Apprenticeship is the traditional form of VET.  Unfortunately, the economic crisis has caused a reduction of apprenticeships in a number of countries.  But not all: in some the numbers are stable.  Learning for Jobs: OECD Policy Review of Vocational Education and Training is an initial report linked to VET studies in 17 different countries.  The review shows that employers in several countries are strongly engaged in the provision of apprenticeships and are great supporters of VET, but in countries where VET is less developed, employers may be less engaged.  SMEs are especially reluctant, since advancement is limited if only three or four positions exist.  Large firms are luckier, if there is scope for promotion, or if the training is so specific to a firm that it cannot be transferred elsewhere.  Unsurprisingly, firms want governments and employees to share the risk.

One solution is to spend more time in the classroom.  But a recent study of VET in Denmark, one in a series of OECD country studies entitled Working Out Change: Systemic Innovation in Vocational Education and Training, which presents 14 case studies of innovation in VET in six OECD countries (Australia, Denmark, Germany, Hungary, Mexico and Switzerland), discovered that students enrolled in dual programmes, which alternate time in class with time on the job, found employment more easily than their classroom-bound peers.  As one Danish employer said, ‘Chaos in a company is helping a student to learn innovation and creativity.  You cannot teach that in a classroom or laboratory’.    

Most firms argue – erroneously – that apprenticeships cost too much.  In 2004, Swiss companies spent 4.7 billion CHF on apprenticeships.  Earnings generated by apprentices amounted to CHF 5.2 billion.   Is Switzerland a special case?  It has, unlike most countries, established formal mechanisms to calculate the cost benefits of apprenticeships.  More countries should follow their example; Germany is already doing so. 

In an economic downturn, unskilled jobs are the first to go. What about vocational jobs?  The Danish study was conducted in February 2008 while the financial crisis was still simmering.  Changes to Danish VET were designed to let off some of the steam in the event of a downturn – but only if employers (many of whom are foreign) shared the Danish sentiment of ‘social capital’.  The study found, for instance, that employers and employee wanted changes to VET to succeed because they felt they literally ‘owned’ it.  Discard that concept, and the system fails.

My brother worked in construction, specializing in putting aluminum siding on homes in upstate New York.  When he retired, he estimated that he had sided nearly 500 homes.  He taught his son the trade, he said, because ‘people will always need houses.’  That sounds like spurious advice in the aftermath of the subprime crisis, but it remains sound.  Although my nephew travels 250 miles to the building site of his latest project and only sees his family once every two weeks, he doesn’t complain, nor does his crew. ‘I’ve got work,’ he says, ‘I’m able to give these guys jobs, and they’re good workers’.  That’s social capital.