1. GIZ study “Financing of VET - Advisory Approaches
Stefan Hummelsheim
Competence Center « TVET and Labour Market », GIZ
Brussels, 27th November 2014

2. Overview Reference Points Selected Challenges
General Integrated Approach
Specific Advisory Approach
Messages

3. Reference Points
In particular: GIZ Study “Advisory approaches for TVET Financing”. Guidelines for program planning and implementation in particular
In addition: Delegates asking for the Transfer of the dual system, Integrated approach, Empirical evidence from GIZ program implementation

4. Selected challenges
On the supply side: (Initial) TVET System in developing countries are mostly state and school driven, underfinanced with low quality and labour market orientation, high informal sector structure, many micro and small enterprises
On the demand side: dramatic high birth rates, push on the upper secondary level
Intensive search for alternative and capable TVET Funding Systems

5. Selected challenges - 2
Delegations asking for the “Transfer of the German dual System of Initial TVET”
Delegates do have high expectations
very low youth unemployment rate (integration function)
high transition into the labor force
(allocation function)
market oriented production of qualified skilled workers for the needs of the enterprises (qualification function)

6. Selected challenges - 3
Delegates are much surprised concerning the financing structure of the dual system

7. General Integrated Approach
Increased employability
(Supply of labour)
Productive and sustainable employment
(Demand of labour)
Labour market matching mechanisms
Private sector develop-ment
TVET
Labour market strategies + instruments
Economic policy

8. General Integrated Approach - 2
Increased employability
(Supply of labour)
TVET

9. Specific Advisory Approach
Political and Strategic Consulting
Initiation of stakeholder processes
Advice on cost-benefit analyses
Capacity development including management consulting
Participation of the economy in decision-making processes
Advising TVET institutions for enterprise cooperation

10. Specific Advisory Approach - 2
Initiation of awareness about the benefits of Vocational Training for enterprises
Financial cooperation with the donors
Advising concerning training fund models

11. Messages
There is a rationality problem between the single enterprise behavior and the needs of the society and economy
Simple copy process of the Dual System neglect the historical grown commitment of the enterprises and the single enterprise funding scheme
Need to initiate a benefit debate instead of a cost debate, training is an investment
Net benefits normally after the training phase

12. Messages - 2
Sharing the financial burden could be solution, but it depends on the specific conditions
Guiding questions
Stable social consensus that the social rationality is more important?
Is there a commitment of the companies to support the levy financing system?
Is the design of the public authority efficient and effective and does not create new competition failures?

13. Many thanks for your attention
GIZ TVET Headquarter Germany