28 April 2016 The Institutional Context of the German Vocational Education and Training System Dr. Bernd Reissert Professor and former President Berlin School of Economics and Law Former Chairman of UAS7

UAS7 is a strategic alliance of seven leading German Universities of Applied Sciences committed to excellence in teaching, research and university-industry cooperation 28 April founded in New York in 2005

28 April Tradition dating back to craft guilds in the middle ages, expanded to manufacturing with industrialization (1860s) and to the service sector (1920s) 50% of school leavers enter the system each year 3-year vocational training programs for 330 individual professions Apprentices are hired by firms and receive training contract; firms pay a training allowance (roughly one quarter of regular wage) Alternate learning venues: firm (3 days per week), public vocational school (2 days per week) > “dual” system The “dual system” of vocational education and training in Germany: key features (1)

28 April Curricula are highly regulated (by federal government based on consensus of employers’ associations and trade unions) Exams are taken and certificates are provided by Chambers of Commerce and Industry / Crafts Graduates are skilled workers with highly transferable (not only firm-specific) skills High importance of extra-functional skills (responsibility, reliability, flexibility, …) The “dual system” of vocational education and training in Germany: key features (2)

Dr. Robin Mishra Bridging the U.S. Skills Gap – A Transatlantic DiscussionApril 28, 2016Dr. Robin Mishra Combining the Worlds of Work and Education Public VET school „Dual“ = 2 learning venues Define, supervise and monitor the what and how of in-company VET based on consensus Provides legal framework, VET research and resources for school-based VET, delegates authority to social partners and chambers Chambers and social partners Government (federal and local) Employer Trainee Company Occupation („Beruf“) World of Work World of Education Slide taken from:

Incentives to participate in the system Incentives for school leavers: Nationwide recognized certificate, highly transferable skills Training allowance Low risk of unemployment Incentives for firms / employers: Costs (training costs and stipend) are (partly) offset by apprentices’ productivity in 2 nd and 3 rd training year – and by low transaction costs in hiring processes (standardized qualifications; two thirds of trainees stay on with the same employer) Relatively strict employment protection, relatively low labor turnover and long-term stability of employment relationships provide incentives to invest in workers’ qualifications and to create a skilled and flexible internal workforce System provides a highly productive workforce 28 April 20166

A new role for higher education A new model has emerged (partly resulting from increased qualification demands not satisfied by the traditional dual system): Cooperative study programs integrating academic studies and workplace training (“dual studies”): Alternating three-month phases, with students learning (applied-oriented) theory at a university and receiving practical training in an enterprise; interfaces between study phases in the university and in the company are thoroughly designed Program and student numbers are still small but rapidly on the rise Works best with Universities of Applied Sciences as academic partners, where professors are required to have both an academic/research record and practical professional experience in their field, and where mandatory internships for students and collaborative research with companies have had a long tradition 28 April 20167

The model of cooperative study programs 28 April st term Students‘ selection by the companies (complying with university entry requirements) 2nd term last term …………….. Bachelor‘s thesis. Bachelor‘s degree and employment contract university company

Cooperative Study Programs: Strengths, Weaknesses, Opportunities, Threats Strengths: Strong application-orientation of higher education Very good matching of supply and demand on graduates’ labor markets, excellent employment opportunities for graduates Weaknesses: (Latent) conflicts between companies’ short-term skill orientation and universities’ long-term orientation towards more analytical qualifications Cost-intensive management of interfaces, especially towards SMEs Opportunities: Demographics: Companies’ interest in early recruitment Quest for more analytical qualifications than usually acquired in the apprenticeship system Threats: SME’s weakness in long- and medium-term human resource planning 28 April 20169