Why Recalibrating Technical and Vocational Education Training Matters for Inclusive Growth

Our societies today emphasize university degrees and place high value on professions and white-collar jobs. And for most of us, certainly, going to technical and vocational schools is considered a waste of talent – especially if the student is academically excellent.

There is overwhelming evidence showing the important role that building a productive workforce plays in economic development. The rise of the “knowledge economies”—which characterizes most Asia Pacific countries—has framed a new development challenge, and many of the responses—including support for programs and projects on education and trainings—have emphasized equity in access to learning over quality and relevance.

The evolution of skills development for employability, or technical and vocational education and training (TVET), has become the cornerstone of policy priorities of many countries in Asia. But one of the key challenges TVET faces—and which restricts the region’s further growth potential—remains not only to overcome exclusion, but likewise how to deepen the talent pool and facilitate its integration into the market.

For many years, ADB has been financing programs for its developing member countries to broaden and deepen their human capital. Yet, evaluations point to the widening gap between TVET graduates and labor market needs. In Viet Nam, a completed project performance evaluation report by ADB’s Independent Evaluation Department shows how the lack of coordination and linkages with enterprises validates this observation. There is a mismatch between skills and employment among graduates, pointing to a high percentage of those who did not work in jobs that matched their training. The findings reveal that the share of non-matching jobs ranged from 10% to 45%. Those who studied computer technology or information technology had the highest rate of non-matching jobs, as the majority of them ended up working in electronic appliance shops. This pattern severely underutilizes the human resources available, resulting in unfilled vacancies, unemployment, underemployment, and reduced productivity ­– all of which undermine inclusive growth.

A subsequent question that arises is how such a gap can be closed. The supply-oriented nature of educational systems across the region must now increasingly redirect itself toward a market-driven educational framework. In order to ensure relevance, the focus should be on regularly restructuring the training curricula, augmented by broad participation of the private sector in several aspects. There is also a need to promote in-service training to enhance the competitiveness of firms and the quality of the workforce. The substantial support of the private sector in terms of identifying skills needs may very well define the type of competencies they need in the short and medium terms. Meanwhile, the value of in-service training through apprenticeships before formal recruitment, and coaching or mentoring either as part of the curricula or not, could potentially foster more competitiveness, especially in the context of free trade agreements prevalent in Asia.

ADB’s work on enabling education and skills training aims to create comprehensive skills development and training policies that meet the needs of the labor market to enhance economic growth. This supports recent UNESCO and World Bank findings on strategic alignment of TVET with national socio-economic goals based on analysis of success stories in the People’s Republic of China; Hong Kong, China; the Republic of Korea; Singapore; and Viet Nam. At the ADB corporate level, an amplified support is needed to bolster current gains. As part of the Strategy 2020 midterm review, ADB commits to expand the share of operations in the education sector from 3% during 2008-2012 to 6%-10% in 2014-2020. The extent and coverage of these programs must highlight the balance between quality human resources through enhanced TVET systems, and relevant market opportunities to achieve a truly inclusive growth.

The road that lies ahead for TVET needs a shift in order to reinvigorate outcomes and impacts. Inclusive growth, a growth that ensures participation of vulnerable and lower-income groups in available economic opportunities, is pushed back when the absence of excellence in many technical and vocational fields fails to meet the demands of the market. Quite surely, this costs nations a hefty amount economically.