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Obstacles for Dual Vocational Education in Georgia

In Central Europe, vocational education and training (VET) has a tradition that reaches back to medieval times. To become, say, a baker in 14th century Germany, one had to go through an apprenticeship of two years, working and learning in an existing bakery, where one was guided and supervised by a meister (master craftsman). The apprenticeship was standardized and – if successful – ended with the conferment of a certificate and admission to the baker’s guild. 

Not only skills were acquired in the apprenticeship (e.g., kneading the dough) but also theoretical knowledge. In particular, baker apprentices learned what was allowed and what was not allowed when making bread. For example, before quality standards were established, it was not unusual to dilute the bread with wood shavings. This practice was outlawed by the guilds, which punished transgressions draconically: the photograph shows a so-called bäckertaufe, a cage in which a baker who had violated the quality standards was submerged into the sewer (unpleasant, but without seriously harming the culprit). The earliest known list of quality standards that were taught to apprentices can be found in the historical archive of the city of Cologne and dates back to 1182. Famous is the Reinheitsgebot of German beer (the beer purity law) which since 1516 states that beer may only contain hops, malt, and water. The establishment of quality standards is one of the side benefits of the system, an important historical reason for Germany’s success in manufacturing, and something that is sorely lacking in Georgia.

In the late 19th century, the theoretical content that had to be known by a craftsman became too comprehensive and complex to be taught by a meister alone. Hence, the practical learning in the workshops was complemented by times in school. This marked the beginning of the dual educational system, where until today apprentices are taught practical skills at their workplaces and theoretical knowledge in schools.

Dual vocational education is now generally acknowledged as a great success and was adopted by many countries. Recently, also Georgia has turned towards this model. In February 2016, the Prime Minister of Georgia, Giorgi Kvirikashvili, announced an initiative to implement the dual educational model in Georgia, aiming at a rate of 60% of the learning to take place in companies and 40% in schools.

Yet, does Georgia offer the right conditions to set up a dual education system successfully?


WHO WILL INVEST IN GEORGIAN APPRENTICES?

The Central European labor markets are characterized by very low labor mobility. Traditionally, workers in Germany, Switzerland and Austria work their whole lives for the same employer. Until recently, changing employers was not part of a typical labor biography, and was usually considered undesirable. A manager like Jürgen Schrempp, who led the Mercedes Benz carmaker from 1995 to 2005, started to work for Mercedes Benz as an apprentice mechanic and stayed his whole life with his employer. While there are new developments towards more flexibility, particularly in certain segments of the job market (e.g., academia and journalism), permanent employment is still the norm. In 2013, 78.6% of German employees had a permanent labor contract, and it is not even allowed to employ somebody repeatedly on a temporary basis. Temporary contracts can only be renewed three times, and the total time span must not be longer than two years. Afterwards, an employee in Germany is entitled to get a permanent contract, which can be enforced at the court.

Because workers are not mobile, businesses are not discouraged from participating in the system despite high costs. The firms have to pay meisters who devote considerable shares of their time to educating apprentices, they have to provide training facilities and pay apprentice salaries. In 2013, the total annual cost for educating a trainee was estimated to be more than 15,000 euro on average, which did not deter German companies to offer more than 450,000 positions to apprentices. Yet, as pointed out by Acemoglu and Pischke (1998) (“Why Do Firms Train? Theory and Evidence”, The Quarterly Journal of Economics, 113: 79-119), the firms are willing to make this investment because it is unlikely that the apprentice will change to another employer after receiving education.

In countries such as Denmark and Ireland, which have higher labor market mobility, firms cannot be confident that they will harvest the fruits of their vocational training efforts. To circumvent the free-rider problem, it is necessary to redistribute training costs between employers, independent of whether they host apprentices or not.

In Georgia, on the other hand, almost all people are employed on temporary contracts. Even the government and big firms do usually not offer permanent labor contracts. With the resulting high labor market mobility of the workforce, the benefits of training will often not accrue to the firms that invested in apprentices, and there are incentives to just hire trained personnel on the labor market without doing the training themselves.

A system similar to Denmark and Ireland, where the cost is (partly) shared by all companies, will therefore be indispensable in Georgia. Maybe more realistically, the training costs could be covered by the government or international development aid, at least in the beginning.


WILL GEORGIANS LIKE TO BE BLUE COLLAR WORKERS?

Another problem is the mentality of many Georgians who shun non-university education. In 2013, about 60% of German high school graduates opted for vocational education, which illustrates that vocational education is the default educational path for the majority in each cohort of young Germans. Accordingly, becoming an apprentice is a choice that is highly respected in the society.

This is different in Georgia. In the Soviet Union, VET was thought to be the choice of unsuccessful and untalented high school students, and nobody wanted to belong to this group. Entering a VET institution was associated with failure, and this attitude still survives in the Georgian society. According to a survey in the 2015 VET Development Strategy of the Government of Georgia, 73% of the respondents would like their children to enter university.

In 2015, the number of Georgians graduating from university was 22,324, while only 11,728 completed a vocational training program. However, these numbers do not only reflect the low prestige of vocational education but also the low value of education one can currently obtain at Georgian VET colleges. These have usually not adopted a dual system but offer primarily theoretical instructions, often of a low quality.

Yet, this is the good news! There is still a huge space for improvements, and if Georgia will manage to set up vocational education that promises good returns in the labor market, it is likely that the contempt for this kind of qualification will gradually fade away.

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Ruediger Heining on Sunday, 05 June 2016 15:47

Thanks a lot to Tamta and Mariam for this interesting blog. Introducing a dual VET system in Georgia would have many benefits for the country, although the introduction would be not as easy as often mentioned. The countries with the best dual VET system in place, Austria, Germany, Liechtenstein and Switzerland recently launched the Donor Committee for Dual VET (www.dcdualvet.com) to support partner countries in implementation of a dual VET system. But they formulated 6 success factors, which are important for implementation and I guess it is useful to mention them for the Georgian context:
1. Learning in Alternation
By learning in the classroom as well as in a professional setting, trainees not only gain valuable technical and social skills, they also learn to implement these skills in practice. Consequently, they become better positioned on the labor market after completing their training.
2. Role of the Private Sector
Joint responsibility of the state and private sector partners ensures the systematic involvement of the private sector in the development of occupational profiles and curricula, the training delivery, examinations, steering and financing of VET. This ensures that the professional skills and expertise obtained during training meet the demands of the economy. By companies recruiting the trainees they decide themselves, how many and which people are to be trained. Thus, trainings meet the demand of the economy not only in terms of content but also quantitatively.
3. Social Recognition of Standards
Societal recognition of dual VET and its certificates is an important element of its attractiveness and success. It is closely connected to quality and opportunities for further education. This in turn requires a VET system that allows for high flexibility despite standardization. Only in this way training courses can be adjusted to keep pace with economic changes and the system itself be further developed.
4. Qualification of Training Institutes and Staff.
Staff, technically and institutionally competent training institutes, and qualified vocational trainers within businesses form the basis of high-quality teaching and learning processes.
5. Joint Financing
Compared with school-based VET systems, a dual system is relatively lower in cost for the state, as businesses bear a substantial part of the training costs. At the same time, many of the businesses benefit even financially. In some sectors already during apprenticeships (due to relatively long training periods of initial apprenticeships), otherwise subsequent to it in form of qualified employees for their business.
6. Broad Objectives
A well-functioning, mature VET system comprises the following objectives: a. Economic objectives: productivity, competitiveness, and quality. b. Social objectives: education and social integration. c. Individual objectives: employment and income, mobility, personal development, and career.
Not every training course can and shall reach all these objectives equally. The system as a whole should ensure a careful balance of all the objectives though.

Thanks a lot to Tamta and Mariam for this interesting blog. Introducing a dual VET system in Georgia would have many benefits for the country, although the introduction would be not as easy as often mentioned. The countries with the best dual VET system in place, Austria, Germany, Liechtenstein and Switzerland recently launched the Donor Committee for Dual VET (www.dcdualvet.com) to support partner countries in implementation of a dual VET system. But they formulated 6 success factors, which are important for implementation and I guess it is useful to mention them for the Georgian context: 1. Learning in Alternation By learning in the classroom as well as in a professional setting, trainees not only gain valuable technical and social skills, they also learn to implement these skills in practice. Consequently, they become better positioned on the labor market after completing their training. 2. Role of the Private Sector Joint responsibility of the state and private sector partners ensures the systematic involvement of the private sector in the development of occupational profiles and curricula, the training delivery, examinations, steering and financing of VET. This ensures that the professional skills and expertise obtained during training meet the demands of the economy. By companies recruiting the trainees they decide themselves, how many and which people are to be trained. Thus, trainings meet the demand of the economy not only in terms of content but also quantitatively. 3. Social Recognition of Standards Societal recognition of dual VET and its certificates is an important element of its attractiveness and success. It is closely connected to quality and opportunities for further education. This in turn requires a VET system that allows for high flexibility despite standardization. Only in this way training courses can be adjusted to keep pace with economic changes and the system itself be further developed. 4. Qualification of Training Institutes and Staff. Staff, technically and institutionally competent training institutes, and qualified vocational trainers within businesses form the basis of high-quality teaching and learning processes. 5. Joint Financing Compared with school-based VET systems, a dual system is relatively lower in cost for the state, as businesses bear a substantial part of the training costs. At the same time, many of the businesses benefit even financially. In some sectors already during apprenticeships (due to relatively long training periods of initial apprenticeships), otherwise subsequent to it in form of qualified employees for their business. 6. Broad Objectives A well-functioning, mature VET system comprises the following objectives: a. Economic objectives: productivity, competitiveness, and quality. b. Social objectives: education and social integration. c. Individual objectives: employment and income, mobility, personal development, and career. Not every training course can and shall reach all these objectives equally. The system as a whole should ensure a careful balance of all the objectives though.
Simon Appleby on Monday, 06 June 2016 18:02

The Dual Vocational Education model is not unique to Europe, it is the basic standard in most Commonwealth countries and the United States also.

One must consider the incentives for a master tradesman to wish to take on an apprentice. It is a tremendous commitment in time, energy and resources, and demands solid leadership skills to convert immature, inexperienced youngsters into mature, solid tradesmen/tradeswomen.

In most western countries, master tradesmen have a number of reasons for agreeing to take on an apprentice:

(1) A sense of satisfaction that they are contributing to the development of the future of their trade, and their community.
(2) The opportunity to identify first-hand the best apprentices whom one can retain as permanent staff upon receiving their certificate.
(3) Wages for apprentices tend to be set at a low rate, as low as a quarter that of a certified tradesperson. While in the first year, apprentices tend to cost employers more than they make for them, in the second year they tend to be pulling their weight and making a contribution to the business. In a high-wage jurisdiction, this is a significant consideration.

Georgia and Germany are not the same, as German workers are amongst the highest-paid in the world. If Georgian apprentices were paid only a quarter the wages of a certified tradesperson, it does not make a major difference to the employers operating costs but dropout rate of apprentices seeking more cash in the short term could be a a problem. Government co-funding of apprentice wages does occur in some markets.

Labour market mobility is a problem for employers in most emerging markets, be it Georgia, Nigeria, Peru or China. In China, many companies treat training expenses of staff as a loan that had to be guaranteed by multiple guarantors, and was paid off by a minimum period of service of staff after receiving certification, or a cash penalty payment if resigning early. These agreements were enforced in the courts. That is the stick in the equation. The carrot is that many Chinese firms have followed the lead of their Hong Kong neighbours in introducing bonus pools for skilled labour, tied to company financial performance, and that is useful in retaining quality trades staff.

The Dual Vocational Education model is not unique to Europe, it is the basic standard in most Commonwealth countries and the United States also. One must consider the incentives for a master tradesman to wish to take on an apprentice. It is a tremendous commitment in time, energy and resources, and demands solid leadership skills to convert immature, inexperienced youngsters into mature, solid tradesmen/tradeswomen. In most western countries, master tradesmen have a number of reasons for agreeing to take on an apprentice: (1) A sense of satisfaction that they are contributing to the development of the future of their trade, and their community. (2) The opportunity to identify first-hand the best apprentices whom one can retain as permanent staff upon receiving their certificate. (3) Wages for apprentices tend to be set at a low rate, as low as a quarter that of a certified tradesperson. While in the first year, apprentices tend to cost employers more than they make for them, in the second year they tend to be pulling their weight and making a contribution to the business. In a high-wage jurisdiction, this is a significant consideration. Georgia and Germany are not the same, as German workers are amongst the highest-paid in the world. If Georgian apprentices were paid only a quarter the wages of a certified tradesperson, it does not make a major difference to the employers operating costs but dropout rate of apprentices seeking more cash in the short term could be a a problem. Government co-funding of apprentice wages does occur in some markets. Labour market mobility is a problem for employers in most emerging markets, be it Georgia, Nigeria, Peru or China. In China, many companies treat training expenses of staff as a loan that had to be guaranteed by multiple guarantors, and was paid off by a minimum period of service of staff after receiving certification, or a cash penalty payment if resigning early. These agreements were enforced in the courts. That is the stick in the equation. The carrot is that many Chinese firms have followed the lead of their Hong Kong neighbours in introducing bonus pools for skilled labour, tied to company financial performance, and that is useful in retaining quality trades staff.
Ruediger Heining on Monday, 06 June 2016 19:47

Simon, the experiences in the United States to start a dual system in vocational education is quite interesting for Georgia and a lessons learnt by itself. Although elements of a dual VET system had been introduced in the 19th century, the massiv reform in the early 1990th made the real changes only. I recommend to all being interested in detail to read the article from Matthias Kreysing: Vocational education in the United States: reforms and results. European Journal / Vocational Education No 23. Here's a link to the article: https://drive.google.com/open?id=0B2X2BKfOiv65TGFBZ0F5UFR0Mzg

Simon, the experiences in the United States to start a dual system in vocational education is quite interesting for Georgia and a lessons learnt by itself. Although elements of a dual VET system had been introduced in the 19th century, the massiv reform in the early 1990th made the real changes only. I recommend to all being interested in detail to read the article from Matthias Kreysing: Vocational education in the United States: reforms and results. European Journal / Vocational Education No 23. Here's a link to the article: https://drive.google.com/open?id=0B2X2BKfOiv65TGFBZ0F5UFR0Mzg
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