1. Korea University of Technology and Education
Skills Development
and
Korea’s Experiences
October, 2006
Korea University of Technology and Education

2. 1. History of Vocational Training Policies in Korea
Beginning Stage in the 1960s and 1970s
Background
Economic Development Plans Started in 1962
Massive demand for skilled workers, but
– Lack of funds available
– Lack of vocational training facilities
– Lack of training experts & experiences

3. Major Policies Beginning Stage in the 1960s and 1970s
Vocational training system established since 1967
– Training criteria determined to promote various
programs
Government-led training to provide skilled workers
– Founding public vocational training institutions
– Funding by ADB & IBRD loans
Compulsory in-plant training adopted since 1976
– Training levies imposed on non-complying firms
Institution to train instructors established in 1971

4. – German technical assistance played an essential role
Beginning Stage in the 1960s and 1970s
Further Issues
Technical difficulties in
– Designing and operating training institutions
– Supplying qualified instructors
Foreign technical assistance required to solve
those difficulties in short period
– German technical assistance played an essential role
(also ILO, Belgium, Japan etc.)

5. Background Growth in the 1980s decreasing trainees
Changes in industrial structure:
– Labor-intensive → technology-intensive
– Mass production → flexible production
Increasing students in higher education,
decreasing trainees
Increasing need for upgrading training levels

6. Major Policies Growth in the 1980s government training
Focus shifted from simple-skilled to multi-skilled
– Longer training periods
– Upgrading & refresher training emphasized
– Training for white collar workers & supervisors
Integration of training criteria & skill test criteria
Financial subsidies increased to activate non-
government training

7. Further Issues Growth in the 1980s
How to improve efficiency of training facilities to better meet industrial demand?
– Policy emphasis changed from quantity to quality
– Adjustment of training criteria & testing criteria to the
industrial needs
– Integration of public training institutions

8. Background Transition period in the 1990s
Focus of training to be changed, to enhance competitiveness of firms
– Initial training → upgrade training for employed
– Public training → in-plant training
– Target : manufacture workers → all workers
Financial crisis :

9. Major Policies Transition period in the 1990s
In-plant training system incorporated into Skills Development Program under Employment Insurance System in 1995
– Compulsory training → EI contributions / subsidies
– Extended to all workers, all industries to cover lifelong
skills development
Safety net for unemployed
– Unemployment measures based on training for unemployed
Founded Korea University of Technology and Education in 1992 for upgrading of instructors & HRD experts

10. Background Innovation in the 2000s Growth of IT, BT, etc.
Lifelong workplace → lifelong occupation
Polarization of labor market; more opportunities for skilled workers, less opportunities for disadvantaged

11. Major Policies Innovation in the 2000s
Closer link among business, school, research & government in R&D, skills development programs
– Universities’ growing roles in providing industry needs-oriented manpower & skills development programs
Continuous skills development across working life
– Organized learning at workplace
– Worker’s voluntary skills development
– University–industry cooperation programs increasing
at national and regional levels
Special programs to improve skills of disadvantaged

12. 2. Financing of Skills Development
Compulsory Vocational Training ( )
Companies with 300 employees or more (1976)
→ companies with 150 or more (1992)
Non-compliers to pay training levies
Funds from the levies used for training expenditure
– Trainees : 2,180,000 (’76 ~ ’98)

13. EI Skills Development (1995~)
3 programs in EI financed by EI fund
– Unemployment benefits, job security & skills
development
Skills development program :
– Contributions : 0.25% ~ 0.85% of total wage,
depending on company size
Support for employers & employees by EI fund
– Trainees : 2,460,000 (’06)

14. Driving Economic Growth
3. Implications
Driving Economic Growth
Timely supply of workforce for each phase of industrial development
(light → heavy/chemical → high-tech industry)
Abundant quality workforce as a driving force behind the rapid economic growth

15. Flexible Policy Responses
Policy responsive to changes in industrial structure
– Basic training in manufacturing → Basic & Upgrade training in overall industries
Private sector-led initiatives
– Public training → Private & Voluntary training with govt. support

16. Tackling Mass Unemployment
Large-scale training for the unemployed during the financial crisis
– Support for living & re-employment of the unemployed
Expanded training in IT sector facilitated transition to an information-based society

17. Active Labor Market Policy
One-stop services at PES (Job Center)
Closer link among unemployment benefits, job placement & skills development under EI system