Swiss Vocational Education and Training

Swiss Vocational Education and Training
Switzerland’s Source of Richness
Rudolf H. Strahm
1
Swiss Vocational Education and Training
Switzerland’s Source of Richness
www.worlddidac.org
Rudolf H. Strahm
www.bjinstitute.org
Rajendra & Ursula Joshi Foundation
RAJENDRAwww.joshi-foundation.ch
& URSULA JOSHI CHARITABLE FOUNDATION
This publication is an excerpt of the book:
Rudolf Strahm / Warum wir so reich sind - Wirtschaftsbuch Schweiz
ISBN 978-3-03905-576-0 / Second Edition 2010. www.hep-verlag.ch
All sources of data are named in the book.
Layout and production: bj institute, Hyderabad
Graphics by Joel Kaiser, Bern and bj institute, Hyderabad
Cover design: Atelier Mühleberg, Basel and Bruno Jehle, Aarau
Translation by Dr. Neelam Nagar - Neelam’s Sprachschule, Bern
Copyright images: The Vishwakarma Apprenticeship Education Project,
Knowledge Transfer from Switzerland to India, ISBN 978-3-033-02369-7
published by Rajendra & Ursula Joshi Foundation, Zurich
Copyright 2010 © Rudolf H. Strahm
Published by worlddidac 2010
Printed in India, September 2010
worlddidac 2010
1
Foreword by Editor
It is our belief, that Vocational Education and Training (VET) offers still many opportunities in our today’s world. High-level workplace skills are generally considered a key means of the supporting economic growth. The Swiss VET system
is very successful, thanks to the close cooperation between trade associations,
companies, VET schools and the government. This ensures field relevance and
pioneering expertise.
As the global economy emerges from the shadow of the crisis, it is time to think of
new sources of growth creating the conditions for sustainable and balanced economic development that will deliver the quality jobs we need. VET is concerned
with the acquisition of knowledge and skills for the world of work to increase opportunities for productive work, sustainable livelihoods, personal empowerment
and socio-economic development in knowledge economies. To increase their
chances for employability, young people and adults need skills that are adaptable
and relevant to the demands of today’s societies, which require individuals to possess a combination of knowledge, practical and social skills and positive attitudes
and the ability to adapt to rapidly changing work environments.
Vocational education and training for young people has a big part to play in making this a reality. For vocational training to live up to its potential, we need a modernized approach, with highly professional teachers and trainers, preparing young
people for the demanding jobs of the future. Above all, we need partnership
between education and training systems and industry, to provide for workplace
training, to ensure that skills have real labor market relevance and that young people gain an early appreciation and understanding of the world of work.
To achieve this goal, Worlddidac is committed to working closely with partners
all over the world. VET is a field in which countries have much to learn from each
other.
2
Worlddidac is an international Association for producers and distributors of
educational resources. We commit ourselves worldwide to education and training. Worlddidac has 180 members in 43 countries and 5 continents. By offering
WORLDDIDAC exhibitions in India, Thailand, Vietnam and since 1966 in Switzerland, we open doors for the development of educational systems in many countries
and regions around the world. We recognize excellence of educational material
and honor with the Worlddidac Award every second year qualitative outstanding
products. Furthermore, Worlddidac certifies companies on the basis of Worlddidac Quality Charter WQC criteria.
We are proud to contribute to the second edition of ‘Swiss Vocational Education
and Training – Switzerland’s Source of Richness’. We thank Mr. Rudolf Strahm for
his important and untiring work for VET. It is our wish that VET may serve other
countries as a way to wealth and happiness.
Beat Jost
Executive Director
Worlddidac Association
Bern, September 2010
3
Foreword by Author
There are already sufficient numbers of textbooks of economy, that teach definitional knowledge and models which devoid of economy reality. This book of
economy Switzerland does not belong to the above category, rather it depicts the
understanding of the inter-relation of the real Swiss economy.
This book wants to show the citizens and the teachers in a comprehensive way
why we belong to the club of the richest countries and in spite of the fact that
our export oriented economy, having high wages and prices is well positioned in
the world market. All the leading factors of our wealth -the high productivity, the
high population labour participation and the international competitiveness with
its strong export power - are linked namely to our vocational training system. Our
system aligned to practical professional education is the decisive historic success
factor which defines the “Swissness”, the Swiss quality work and the high value
creation.
I ask my fellow economists the following question: How do you explain the economic paradox that Switzerland from the nineties until our current century had
the lowest growth rate of all industrialised countries but still had the lowest unemployment rate and the highest ratio of employment in the population and still
has? The common school book economy a low growth rate should result in high
unemployment - a paradox between theory and economic reality.
None of the academic models of economy are able to explain this paradox. It corelates together with the Swiss vocational education and training system which
promotes the better integration of the labour market than in other countries. This
distinctiveness of the Swiss vocational education and training system with its dual
education in business and school is not familiar with the university experts although in Switzerland almost 70 percent of all youth start their professional entry
with an apprenticeship. What the university economists do not know, simply does
not exist in their formalized models.
With this book, I show the value of the vocational education and training system
with its high employment rate compared internationally, for low unemployment
rate, high productivity and competitiveness of the workplaces prevailing in Switzerland. I also show the value of work and the meaning of precise quality work for
the manufacturing industry which results in the prosperity of Switzerland.
4
My long experience with Swiss economic policy and in areas of education are
reflected in this book too. I completed a vocational training as a laboratory technician, a school of engineering as a chemist and an university education as a national
economist. Five years of industrial practice, twenty years in the leading functional
capacities on associations, seven years business consultancy, thirteen years in the
Swiss parliament as economic politician and four years in administration as price
supervisor inspired me to align stronger the economic basic knowledge with the
practising economic policy and working environment of the real economy. The
depictions of this book also result out of the longstanding teaching assignments
in training of vocational trainers at the University of Bern and Frieborg and vocational school teachers.
More than two decades ago, I specialized in development Economics, wrote the
book “Why they are so poor” translated into many languages and became a bestseller all over Europe; I refer to my epilogue at the end of that book. Now here
I present more or less the other side of the coin. The main objective of this book
of economy is that the readers should be able to understand our own wealth in
Switzerland and evaluate the economic contexts themselves. It is meant for those
who are dealing with vocational training, vocational- and secondary school, as well
as for the interested media professionals and citizens who regard working world
and the work place as the central welfare factor. This book is dedicated as recognition for those who are concerned with vocational training, further education and
learners.
I thank Dr. Ms. Neelam Nagar (Bern) for the English translation and bj institute
(Hyderabad and Aarau), Bruno Jehle for the impressively attractive design and
layout of this book.
Rudolf H. Strahm
Herrenschwanden, Switzerland, March 2010
5
Contents
Foreword by Editor
2
Foreword by Author
4
1.
9
2. A Paradox: Despite low economic growth, lowest
unemployment
17
3. Vocational Education and Training (VET)
Key to Employability
25
4. Formation and Social Question
33
5. Swiss System of Vocational Education and Training
41
6. Costs of Vocational Education and Training
53
Productivity: Key factor of international
competitiveness
59
7.
6
Country comparisons: Switzerland in the league of the
richest countries
The Author
69
Portrait JCF
70
Portrait bj institute
72
7
1
Country comparisons:
Switzerland in the league of the
richest countries
Switzerland belongs to the richest, strongest export and most competitive countries of the world. Compared with almost all economic parameters Switzerland
leads the race. Especially small and medium sized enterprises are the main contributors to this success. The domestic-and support work often neglected as
unpaid economy undoubtedly also contribute to this wealth and welfare.
8
9
1
Overview
We will introduce in this introductory chapter few economic and non-economic
benchmark figures for the prosperity and Swiss welfare compared by international
standards.
1.1 The Swiss economy ranks among
the top International countries
Switzerland belongs to the club of the economic richest of the world. This result
is the exact opposite of the impoverishment lament of some economists from the
nineties, it would slip down to second or third league of the leading economy
nations.
Ranking of the international competitiveness, 2009
Based on WEF
World Economic Forum
Switzerland is ranked on the top measured against its GDP. Measured per head
of population it belongs to the strongest export countries of the world. Year after
year compared by international trade standards Switzerland has one of the highest balance of payments surplus. This is a sound and convincing indicator of its
international competitive position despite high wages and- pricing in the world
market.
The Global Competitiveness Report
Rating 2009
Switzerland
USA
Welfare is not the only economic parameter. This introductory chapter shows that
Switzerland is ranked on the top measured against the international index for its
subjective happiness.
Singapore
Sweden
Denmark
In order to evaluate and rate the wealth it is important to consider the unpaid
economy. Early pilot-studies of the Federal Statistical Office indicate that in the
unpaid economy with domestic-, support- and voluntary work, notably women
generate a production value approximately as high as through the whole paid
employment in the economy.
Finally we point out that small- and medium sized enterprises together offer more
than two third of the employment and is the backbone of the Swiss economy.
Finland
Germany
Japan
Canada
Netherlands
10
9
8
7
6
5
4
3
2
1
Based on IMD
International Institute for
Management Development
World Competitiveness Yearbook
Rating 2009
1
USA
2
Hong kong
3
Singapore
4
Switzerland
5
Denmark
6
Sweden
7
Australia
8
Canada
9
Finland
10
Netherlands
From the business perspective the Swiss economy is classified among the
most competitive national economies of the world. Both in the world ranking according to World Economic Forum WEF (Geneva and Davos) and those
of the International Institute for Management Development IMD (Lausanne)
it constantly ranks amongst the top group. The ranking changes slightly from year
to year due to subjective assessment conducted of managers and changes in the
mainstream (the opinion of the day).
10
11
1.3 Switzerland among the world
champions in export
1.2 Switzerland in the league of the
richest countries of the world
Gross Domestic Product (GDP) in US-Dollar per head, 2008
Ranking compared to
purchasing power
Ranking calculated
with exchange rates
Luxembourg
Norway
Switzerland
Denmark
Ireland
Netherlands
Sweden
Finland
Austria
Belgium
USA
France
Germany
Great Britain
Italy
Japan
Singapore
Spain
Greece
Hong kong
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Luxembourg 1
Norway 2
Singapore 3
USA 4
Hong kong 5
Ireland 6
Switzerland 7
Netherlands 8
Austria 9
Finland 10
Denmark 11
Great Britain12
Belgium 13
Germany 14
Finland 15
France 16
Japan 17
Spain 18
Italy 19
Greece 20
Indonesia 55
Philippines 56
India 57
Indonesia 55
Philippines 56
India 57
0
20
40
60
80
One thousand US-Dollars
100
Exports of goods in US-Dollars per capita 2008
120
44 700
Belgium*
38 400
Netherlands*
28 000
Ireland
26 400
Switzerland
21 800
Austria
21 300
Denmark
19 900
Sweden
Finland
18 200
Germany
17 900
9800
France
9100
Italy
7500
Great Britain
6100
Japan
4200
USA
1070
China
0
10
20
30
40
50
60
70
80
One thousand US-Dollars
150
India
0
*Port-Transit- Countries
Switzerland belongs to one of the richest countries in the world measured against
its GDP per head. In 2008 it ranked third with its GDP per head calculated with currency exchange rate and seventh against purchasing power. The ranking changed
according to currency exchange rate from year to year. Some of the countries
ranked ahead of Switzerland are exceptional cases (small countries like Luxembourg, oil rich Norway).
12
10 000
20 000
30 000
40 000
50 000
in US-Dollars
Measured per person of population Switzerland belongs to the strongest export
countries of the world. Seen against the two exceptional cases Holland and
Belgium, which act partly due to their harbours as transit countries, hence Switzerland ranks second after Ireland as export countries. The Swiss economy is exportoriented and already significantly globalised.
13
1.4 Switzerland amongst the top
countries with surplus foreign
exchange
1.5 Swiss population is one of
happiest in the world
Balance of payments Surplus / Deficit as percentage of Gross
Domestic Product (GDP) 2007
Deficit ⊖
Collective indicator for people’s sentiment of happiness, 2004
⊕ Surplus
14,8
Singapore
14,2
Hong Kong
Netherlands
Denmark
2,0
Finland
1,0
Great Britain
–2,5
Italy
– 3,2
Ireland
USA
Greece
–12 %
7,0
6,9
Chile
6,9
6,6
5,7
South Africa
5,6
Turkey
5,6
Kenya
– 4,7
Ukraine
5,5
3,6
0
–9 %
–6 %
–3 %
0%
3%
6%
9%
12 %
15 %
Besides three Asian export countries and oil rich countries Switzerland has the
highest balance of payments surplus. The surplus budget is the sound and convincing indicator for its international competitive position. It reveals how many more
goods & services were exported and imported per year. This surplus achieved
around 50 bn SFr. Approximately 9 % of GDP. This implies that Switzerland had to
invest abroad 50 Bn SFr. in 2008 saw the temporary shrinking of the surplus as a
result of the financial crisis.
14
7,1
Italy
– 4,7
–14,4
–15 %
7,2
India
–2,0
India
7,4
France
–1,7
France
7,8
Austria
3,2
Japan
8,0
Germany
6,6
Germany
Malta
Great Britain
9,3
8,3
Sweden
8,0
USA
9,5
Switzerland
8,0
Denmark
Ireland
10,2
China
Switzerland
1
unsatisfied
2
3
4
5
6
7
8
9
10
very satisfied
Switzerland belongs to the countries with the highest life contentment amongst
its population. The GDP is not the only measurement for quality of life, as it only
assesses the economic goods and their market price. Based on the Collective
Index of the “World Data Base of Happiness”, study conducted by the ErasmusUniversity of Holland, above is the ranking list of the sense of happiness. This
comparison takes 95 countries into account based on figure indicative of welfare
and life quality.
15
1.6 The Swiss wealth does not
originate from the banks only
2
A Paradox: Despite low economic
growth, lowest unemployment
Strong business sectors according to employees (2008)
and its contribution to the Gross Domestic Product (GDP) (2007)
Value added
in % of GDP
Employees
Wholesale and Retail business
524 000
11,6 %
482 000
Health care
Service Sector
for Enterprises
6,1 %
380 000
7,3 %
302 000
Construction Industry
Machine, Electrical / Electronics
and Metal Industrie ( MEM )
5,4 %
275 000
234 000
Hospitality
2,3 %
132 000
Precision and Mechanical
Gadgets / Watches
9,2 %
98 000
Chemical Industry
3,0 %
00
2
4
6
8
10 12
00
0
60
50
00
00
00
00
40
00
00
4,2 %
30
00
00
10
00
0
00
70 000
20
Banks and Financial Sector
6,6 %
Switzerland is rich as a result of its banks is the clichè over Switzerland’s national
economy, is highly perceived both abroad as well as at home. The banking sector
(without insurance) at the peak before financial crisis had 3.3% of the total employees and contributed 9.2% to the national economical value added. The value
added ratio of the banks as percentrage of the GDP decreased in 2008 as a result
of the financial crisis to 7.6%. The Swiss economy is robust because its not monopolistic oriented rather multifarious sectors contributing profoundly to its wealth.
16
How does this occur? For a long time Switzerland showed amongst the industrial
countries the lowest economic growth – and still the lowest unemployment and
the highest labour force participation rate. The key answer for this apparent paradox situation lies in the vocational education training system that enables more
people to work and integrates them into the labour market.
17
2
Overview
There is a paradox in the Swiss economy which economic theories are unable to
explain:
2.1 Switzerland with the lowest
economic growth in the nineties
During the nineties Switzerland compared by international standards had the lowest economic growth. For well over a decade our country was at the bottom of the
ranking of OECD-countries.
Despite lowest national economic growth we had the lowest unemployment rate
amongst all OECD countries– even lower than the exemplary developed economies like England and the USA. And simultaneously we had the highest labour
force participation rate, namely the highest percentage of the active population
which was earning income.
Rate of yearly average growth of Gross Domestic Product (GDP)
from 1992 till 2005 (14 years)
7
6
How does one explain this paradox? If we follow our common textbook economy,
we would have had a high rate of unemployment or would even still have it today.
We will elucidate in the following chapters (3 and 4) the key to success in the
various profession integration system of countries: The Swiss vocational education training system enables more people to join vocational training and labour
market. As this Dual-system is more practical , geared towards labour market and
qualitatively better then the absolute traditional school system.
6,4
5
4,5
4
3,3
3
3,1
2,9
2,8
2,7
2,6
2,6
2,3
2
2,3
2,2
2,1
1,9
1,9
1,9
1,3
1
1,2
1,1
1,1
US
A
No
rw
ay
Sp
ain
Gre
ece
Gre
at
all
Bri
OE
tai
CD
n
-Co
un
trie
s
Fin
lan
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Sw
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en
De
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Ne
the
rla
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s
Au
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Po
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ga
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Be
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Ita
ly
Jap
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Sw
itz
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0
Over 14 years Switzerland has been at the rear end with its GDP in comparison
with industrialized countries of the OECD (Organization for Economic Co-operation and Development). Low economic growth was partially due to production
outsourcing abroad and appreciating of the Swiss currency value. Only since 2003
the economic growth has ascended.
18
19
2.2 Despite the low economic growth
Switzerland still had the lowest
unemployment rate
2.3 Despite the low economic growth
Switzerland had the highest rate
of employment
Average unemployment rate from 1992 - 2005
(14 years)
90
15,3
80
14,0
14
83
76
12
70
11,6
9,1
50
8,5
8,4
7,0
5,8
4,5
4,2
4,0
3,6
70
65
64
61
61
59
57
55
54
Sw
Fin
A paradox: Despite the low economic growth Switzerland still had the lowest
rate of unemployment compared with OECD countries. The explanation lies in
the closeness between labour market and educational system VET brings higher
employability. The OECD has standardized the unemployment ratio making the
comparison feasible: Registered unemployed work force in percentage against
total number of the work force (ages 15-64).
itz
erl
an
d
De
nm
ark
No
rw
ay
Au
str
ia
0
ain
lan
d
Fra
nce
Ita
ly
Gre
ece
Ire
lan
d
Be
lgi
um
Ge
rm
an
y
all
Sw
OE
e
d
CD
en
-Co
un
t
Gre
rie
s
at
Bri
tai
n
De
nm
ark
Po
rtu
ga
l
US
A
No
rw
Ne
ay
the
rla
nd
s
Au
str
ia
Jap
an
Sw
itz
erl
an
d
0
nd
70
20
10
Sp
71
30
5,4
4,6
Po
la
71
40
2
20
72
6,7
5,9
4
73
8,3
7,3
6
74
66
9,8
8
74
60
10,2
10
75
Jap
an
Sw
e
de
Ne
n
the
rla
nd
Gre
s
at
Bri
tai
n
US
A
Ge
rm
an
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all
Po
OE
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CD
ga
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Fin
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Ire
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Be
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um
Fra
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Sp
ain
Gre
ece
Ita
ly
Po
lan
d
16
Average employment ratio between the period 1994 and 2005
(12 years)
A paradox: Despite the low economic growth Switzerland had and still has the
highest ratio of employment of its paid workforce, between 15 and 64 years of
age, compared with OECD countries. The Swiss educational system significantly
assists employability. The OECD includes all forms of employment in the labour
force participation ratio irrespective of full-time or part-time employment.
21
2.4 The countries with apprenticeship
system had lower rate of unemployment amongst its youth prior
to the financial crises
2.5 Countries with vocational training
system still have lower rate of
unemployment amongst its youth
during the financial crises
Unemployment rates of adolescence between 15 – 24 years (only
concerning the youth who are no longer in vocational training),
2008 before the financial crises
Industrialised countries with only theoretical
education without vocational training,
19% average
Industrialised countries with only theoretical
education without vocational training,
25% average
50
20
40
Ø 19%
14
14
14
14
30
11
20
10
28
27
27
Ø 25%
25
23
22
Ø 7%
Countries which are conversant with apprenticeship system – a combination between apprenticeship in host company and vocational school – have significantly
lower rates of unemployment amongst its youth. Switzerland, Austria,Germany,
Denmark and the Netherlands belong to the countries which offer VET. Combined
school/worked-based VET promotes and fosters practical intelligence and enables better orientation during the apprenticeship for employability. Single-track
educational system leads to more youth falling out of the main stream. Above
mentioned youth is excluded from the labour force participation ratio.
19
Ø 8%
12
10
10
6
7
6
ou
rg
Gre
at
Bri
tai
n
Po
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ga
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lan
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em
b
Fin
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Lux
Sw
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en
Fra
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0
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Sw
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Ho
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str
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Au
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Por
tug
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Be
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A
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US
Bri
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d
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Fin
ain
Sp
Sw
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en
0
19
10
nd
6
in
7
Irla
7
West
5
7
Sp
a
7
20
incl East
17
15
43
Au
str
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rm
an
y(
We
st)
Ho
lla
nd
Sw
itz
erl
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21
De
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22
20
22
5 industrialised countries
with vocational training
8% average
24
US
A
25
5 industrialised countries
with vocational training
7% average
incl East
25
Unemployment rates of adolescence between 15 – 24 years (only
concerning the youth who are no longer in vocational training),
during the financial crises, autumn 2009
The VET based on the dual system proves superior even during economic crisis
concerning employability. The five industrial countries with dual VET system had
at the peak of the recession (second half of 2009) significant lower unemployment
rates of adolescence, while Latin and Anglo-Saxon countries with their full-time
school had noticeably more unemployed.
23
3
Vocational Education and Training
(VET) Key to Employability
Regions and population groups in Switzerland with lower percentages of vocational education and training according to the Dual system is indicative of higher
rate of unemployment. European countries without vocational education and
training have more difficulty in integrating their youth, particularly those who have
not accomplished professions with high skills requirements, into the labour market. The consequence is mass youth unemployment.
24
25
3
Overview
There is no other salient core issue for labour market integration, reduction and
prevention of unemployment than an apprenticeship. This afore said statement
with statistical comparisons within Switzerland and abroad will be deliberated and
conclusively proven in this third chapter.
People without apprenticeship nor post-compulsory schooling are more often affected by unemployment than people with a completed apprenticeship. Relatively
lower percentage of unemployment is conspicuously visible in every facet of the
economic activities in the German-speaking part of Switzerland -where Switzerland’s unique dual vocational education and in-company training is widespread
- than in the French- (Romandie) and Italian-speaking part of Switzerland (Tessin).
Whereas unemployment among foreigners in Switzerland who are often unskilled,
is significantly higher than with their Swiss counterparts.
3.1 Swiss Educational System is
difficult to be compared with
other countries Switzerland is
exceptional with Baccalaureate
Rate of admission to University compared internationally, 2005 (the
average age of students completing Baccalaureate and Professional
Baccalaureate indicated in percentage)
97
Finland
91
Ireland
Compared internationally, Switzerland’s unique vocational education and training
system enables a larger percentage of the youth and adults in to working life resulting in the lowest youth unemployment and lowest unemployment in general.
77
Italy
75
USA
74
Sweden
70
Japan
During economic fluctuations Labour force without post-compulsory schooling is
more prone to flexibility reserve and is particularly susceptible to unemployment.
This present chapter illustrates the affiliation between vocational training and
unemployment and tables crucial national and international comparisons for
discussion.
65
Portugal
Belgium
61
Country Average Ø OECD
61
Holland
60
Denmark
55
France
52
Spain
45
Germany
41
Switzerland
26
0%
20%
40%
60%
80%
100%
Ratio in age groups
Compared to each other the educational systems of the countries are extremely
different. The ratio of the youth, finding access to higher education, with Academic Baccalaureate or a comparable Diploma of the secondary level II, move
in the range of 97% in Finland, but only 26% in Switzerland. In Switzerland Baccalaureate quota is divided in 18% Academic Baccalaureate and 8% Professional
Baccalaureate. The OECD education reporting and consequently resulting in the
Bologna model show that vocational paths are not being valued in the same way.
26
27
3.2 International comparison: Countries lacking in apprenticeship
system havemore youth without
professional education training
Ratio in percentage between the ages of 18 – 24 without secondary
level II qualification (unskilled youth) in Europe (2007)
Portugal
36
Spain
19
Great Britain
13
Germany
13
26,8
25,2
24,7
22,5
21,5
Luxembourg
Belgium
20,4
EU-15
20,6
Belgium
12
Great Britain
Denmark
12
Portugal
Ireland
12
Denmark
Netherlands
12
Germany
10,3
Austria
10,2
Norway
9,1
11
Austria
Sweden
9
Finland
8
Switzerland
8
0%
19,7
18,9
12,0
Netherlands
7,2
Switzerland
10%
20%
30%
40%
50%
Countries which already know the apprenticeship system (dual system), do have it
easier in general to enable young people a customized complete apprenticeship
with degree: for example Switzerland, Denmark, Austria, Germany, the Netherlands. In contrast, countries in Southern Europe and Great Britain which do not
offer this Dual system with practical vocational or occupational training , have
difficulties in enabling young people a degree.
28
Sweden
Finland
15
France
26,9
France
17
Greece
28,4
Italy
Greece
17
EU-15
42,9
Ireland
21
Italy
Rate of unemployed youth in percentage 15 – 24 years in Europe
(EU, autumn 2009)
Spain
31
Norway
3.3 International comparison amongst
youth: Countries with VET system
havethe lowest youth unemployment
5,3
0%
10%
20%
30%
40%
50%
Countries with VET system have a lower rate of youth unemployment than all others: Switzerland, Holland, Denmark, Germany. The VET system facilitates a quicker
integration of the youth in the labour market. Countries with only theoretical education at secondary level II such as Finland, the Latin countries and southern
Europe have significantly higher rate of youth unemployment.
29
3.4 International comparison amongst
adults: Switzerland has the lowest
ratio of unskilled workers
Ratio of adult working population without post – compulsory
education between 25 – 54 years in West Europe (2008)
Percentage of unemployment rate amongst adults between 25 – 49
of working population in West Europe (EU-15, 2008)
Spain
70,0
Portugal
38,3
Italy
34,7
Greece
EU-15
Ireland
Luxembourg
7,4
Finland
7,3
Greece
25,1
France
24,0
6,8
Sweden
6,8
Great Britain
21,3
Belgium
21,3
Great Britain
16,5
14,9
Austria
Sweden
Germany
Switzerland
0%
3,4
3,4
3,1
2,8
Netherlands
11,1
2,7
Norway
9,8
20 %
30 %
40 %
50 %
60 %
70 %
80 %
Compared with the European countries (EU-15, excluding new members from the
former eastern block) Switzerland has the lowest ratio of employed adults without
professional qualification, namely 9.8%. The Swiss VET system enables even dropouts from school and employees to achieve professional qualification.
30
Austria
Switzerland
Denmark
12,4
10 %
5,2
5,0
Luxembourg
15,1
Finland
6,3
5,2
Ireland
18,2
Norway
6,9
Italy
21,4
Denmark
7,2
7,0
EU-15
Belgium
Netherlands
7,7
Portugal
25,7
24,4
France
10,4
Germany
42,0
Spain
3.5 International comparison amongst
adults: Rate of unemployment is
lower in countries with
VET system
0%
2%
4%
6%
8%
10%
12%
Countries with low unskilled workers quota also indicate a low rate of unemployment: Switzerland, Austria, Holland and Germany (enormous difference between
east and west). Norway is a statistical exceptional case (fishery, crude oil exporter).
31
3.6 International comparison amongst
adults: Better the VET qualification
higher guaranteed integration
into the working life
4
Formation and Social Question
Percentage of employed population among adults between 25 – 49
years (= employment ratio) in Western Europe (EU-15, 2008)
Sweden
91,0
Denmark
90,5
Switzerland
90,0
Netherlands
89,6
Portugal
89,6
France
89,5
Finland
89,2
Norway
89,1
Austria
88,8
Germany
88,1
Belgium
87,5
EU-15
86,2
Great Britain
85,3
Luxembourg
85,1
Greece
84,2
Spain
84,2
Ireland
Italy
75 %
82,8
79,4
80 %
85%
90%
95%
Countries with a labour market closer to an educational system and VET system
have a higher rate of employment. Early retirements from 50 onwards are excluded here. The employability is strongly influenced both through the VET system
and integration of working women.
32
Lacking vocational education and training and the missing integration into the
labour market are today the main factors of poverty risk. Omissions in education
and career integration stretch more social-security payments to fight poverty. The
best insurance against poverty is vocational education and training and labour
market integration. Alignment in activating and poverty alleviating social policy is
challenged.
33
4
Overview
Insufficient development in vocational education and training (VET) poses the
greatest poverty risk. Deriving from this realization, we will depict a new point
of view of social politics and fight against poverty in this chapter. Occupational
related education is like an insurance against poverty and precarious labour conditions.
For the majority of the population, namely the youth with more practical than
cognitive abilities, an apprenticeship is the surest way of ensuring self-responsibity and lifelong protection, to higher wages and therefore avoiding from social
welfare benefit dependency. However, economizing in education and apprenticeships , entire groups of population is neglected, later the price the public hand will
have to pay in form of social subsequent costs.
For the past 15 years the country continuously invested more money for the social
welfare services, the outgoings almost stagnated the funds for education . This
Trend has to be immediately reversed. This leads to a new visualization of social
policy: Additional expenses and emphasises for the employment market related
education and labour market integration, will later contribute in the fight against
poverty, enabling the burden of the welfare state to be significantly reduced or
even be avoided.
4.1 Employees with vocational training
are the least vulnerable to be
unemployed
Rate of unemployment amongst the various educational qualifications; Statistically evaluated result of population survey conducted
in 2000 (total population census)
Compared to average rate of unemployment (= 100%)
200
170 %
130 %
100
100 %
Ø = 100
80 %
60 %
A future-oriented activating and preventive social policy should not just align the
redistribution of resources, but rather the labour markets’ integration of the youth
and reintegration of adults, therefore to align “Employability”.
45 %
0
Compulsory
School only
(unskilled)
Vocational
training
Higher
vocational
training
(master
training)
Secundary
Commercial
University
school level II school fulltime
Employees with basic compulsory education without apprenticeship or further education (“unskilled”) have 70% above average rate of unemployment. In average
VET-graduates have 40% lower unemployability as the work force (=100%). On the
other hand, a purely academic education leads to a higher rate of unemployment
than graduates of apprenticeships.
34
35
4.2 Economic fluctuations target the
unskilled workers more than
people with professional
qualifications
4.3 Insufficient initial training poses
the biggest poverty risk in the
labour market
Unemployment based on various educational level in
economic process
Ratio of the “working poor” according to educational status 2005
(working poor = full time employed people who live in poverty)
12 %
Switzerland
11,4 %
Level of unemployment based on various educational level in economic process, 1991-2006
8%
7%
6%
5%
4%
3%
2%
1%
10 %
Unskilled
8%
Professional qualifications /
secondary level II
08
07
20
06
6%
20
20
05
04
20
03
20
02
20
01
20
20
00
20
99
97
98
19
19
96
19
95
19
19
94
92
93
19
19
19
19
91
Academicians
4%
4,2 %
4,2 %
West Germany
Rate of unemployment based on qualification groups in economic process, 1995-2004
2%
30%
1,6 %
25%
Unskilled
0%
20%
VET / Degrees from professional colleges
15%
University of applied sciences
total rate of unemployment
10%
average of all
level of employed
people
without post
compulsary
education
(unskilled)
with VET
Academicians
5%
08
20
05
20
00
20
95
19
90
19
85
19
80
19
19
75
0%
Educational training is the decisive factor how the economic cycle affect employment: During a rapid economic growth unskilled workers will be disproportionally
employed. Yet, in a recession, they act as“ economic cycle buffer” and are frequently disproportionally dismissed – like the economic principle says:
last in - first out.
36
Employees having successfully completed apprenticeship,( within a poverty quota
of 4.2%,) are approximately 2.7 times less poorer than employees without any
post compulsory education (“unskilled”) with a poverty percentage of 11.4%.
“Working Poor” are people with a full time employment, who live under the poverty threshold (SKOS). The most important feature in preventing “working Poor”
is completing a basic vocational education and training. In the population group
of single parents poverty is yet more strongly represented as a result of part-time
employment.
37
4.4 VET is the best social protection
4.5 Apprenticeship and professional
further education it is worth it
Statistical syntheses:
VET/PET and Social status are intertwined
Gross monthly pay according to level of educational qualification
and required standards
SFr.
VET/PET Graduate
Earns initially at least SFr.1,000 more per
month than an unskilled worker.(1 SFr.=1 U$)
Runs three times less the risk
of being unemployed.
Runs 2.5 times lower risk of becoming
a welfare recipient.
Is better equipped to cope with the restructuring
processes in the globalised term.
Has possibility of further education
with career prospect.
The social value of the vocational education and training is statistically proven:
Higher wages thanks to higher productivity, much lower unemployment- and social aid risk, better mastering of quick economical structural changes that represent current economic trend. For VET graduates, VET Baccalaureate, Professional
colleges, higher professional college, University of Applied Sciences and further
tertiary education and professional career are widely opened.
38
Machine, Electronic and Metal Industry (average 13 month salary) 2008
10 000
8000
6000
4000
8900 SFr.
8500 SFr.
7500 SFr.
6600 SFr.
4900 SFr.
2000
0
SFr.
10 000
8000
Unskilled workers Apprenticeship
VET diploma
without
skilled workers
professional
diploma
Apprenticeship
skilled workers
with higher
VET diploma
Total economy (average, full time, 12 month salary) 2008
ø 4500 SFr.
ø 5600 SFr.
ø 7600 SFr.
8068 SFr.
6000
4000
Federal institute
University of
applied sciences of technology
(ETH)
4131 SFr.
4868 SFr.
5147 SFr.
5852 SFr.
6508 SFr.
2000
0
Ordinary tasks / unskilled
With professional skills
and subject knowledge
(qualified)
Qualified, demanding
challenging work
middle management
One who completes an apprenticeship successfully, earns at least SFr. 1,000 per
month, more than an unskilled worker. A special education (for example higher
professional college) earns additionally CHF.1,000 monthly salary and a graduate
from the university of applied sciences again earns initially SFr. 1000 more. Graduates from both, University of applied sciences and Universities/ETH earn almost
same after graduation. However, women in private businesses get 16-20% less
salary than men in the same function.
39
5
Swiss System of Vocational
Education and Training
The Swiss educational system has two paths: On one hand the practical training
education with apprenticeship, Federal Vocational Baccalaureate Examination,
professional college HF, university of applied sciences FH; and on the other hand
purely scholastic path over Academic Baccalaureate to the university or ETH. The
practical training education path is more efficient and economical for the labour
markets’ integration, but through the assimilation to European educational system
(Bologna) it is endangered.
40
41
5
Overview
In this chapter we will discuss the Vocational Education and Training System
compared to international standards.
5.1 The Swiss education system with
theoretical and practical education
and training
The Swiss educational system maintains two educational paths side by side and is
officially acknowledged as “equivalent however different”.
The official systematic education model and different possibilities of
achieving it
The ambitious model “university landscape of Switzerland” that aligns itself towards the Bologna system, threatens universities of applied sciences to down
grade by compromising with the European system hence definitely declining from
the previous system principle “equivalent however different”.
The university education path is to a certain extent not labour market friendly. One
speaks about “generation practical course” ,that is university graduates starting
their professional career have to chose one or several traineeship positions, in absence of which appropriate employment according to their qualification remains
a challenge. It is worth mentioning that University graduates’ traineeship ratio is
seven times higher than that of the of graduates of university of applied sciences,
as they are already equipped and bring practical training education along.
42
University of
Applied Science
Professional
College
Vocational
Baccalaureate
VET Certificate
(2Years)
University
und ETH
Academic
Baccalaureate
Federal VET Diploma (3 or 4 Years)
Basic VET (secondary -level / apprentice) in companies,
vocational schools, trade schools and commercial schools
General education schools
Baccalaureate
Pre-apprenticeship /Bridge-year courses
Compulsory education (primary school / secondary-level 1)
VET/PET
schooling
Academic
schooling
Compulsory
education
direct
access
Tertiary level
University level
secondary level II
The Bologna model is aligned to purely scholastic education and does not value
the vocational education such as an apprenticeship.
Adv. Federal PET
Diploma /
Federal PET Diploma
Quelle: Botschaft Bundesrat BBG © Strahm / hep verlag
However, the former mentioned path is neither compatible nor comparable with
educational systems of the most European countries and the OECD world. Compared with international standards Switzerland shows a very low percentage in
higher education qualification as majority of the Swiss youth start their professional career with an apprenticeship.
Professional education and training
primary school
secondary level I
On one hand the practical training with its education levels apprenticeship (VET
basic education ),Federal Vocational Baccalaureate Examination, professional college HF, University of applied sciences FH; and on the other hand the purely scholastic path over Academic Baccalaureate to the university or ETH. Both paths are
acknowledged as “equivalent however different”. Both systems are in itself and
mutually diaphanous.
Access with additional
qualifications
The above diagram shows the official systematic efficient education model of
Switzerland.
Red: The theoretical and practical education with basic vocational training (With
the Swiss federal certified diploma), Vocational Baccalaureate, Higher Technical
Colleges and specialized colleges equivalent to University standard.
Blue: The entirely academic oriented education with Baccalaureate entry into University or Federal Technical Institute. Both educational ways are “equally weighted
but different” side by side. The interchangeability within and among the various
ways of education is a key: Every diploma opens further education possibilities.
43
5.2 Professional guidance –
the decisive link between civil
society and school and the
world of employment
5.3 The strength of Switzerland:
Practical training oriented
Qualifications are quantatively
predominant
Estimated ratio of education qualifications at secondary level II and
tertiary level in percentage for the entire 2008.
Legal and institutional classification of tasks in the key function of
the professional guidance and integration in the labour market.
Occupational guidance
office
Regional employment
agency
Based on unemployment
insurances law
BCO and cantons are responsible
Based on VET Law
VET and cantons are responsible
Higher
VET / PET
25 %
No further education
at tertiary level
41 %
Professional Colleges 4 %
Qualifications at tertiary level (above 20 years)
FH & PH
University
of Applied
Sciences
University
ETH
16 %
14 %
59 % with higher education (tertiary)
Without
any
VET/PET
Qualification
10 %
Basic Professional Education
(Apprenticeship, Commercial School)
Professional
Baccalaureate
11 %
63 %
Academic
Baccalaureate
and specialized
Baccalaureate
23 %
Quelle: BFS © Strahm / hep verlag
Integration into labour market
through
vocational education and training
and careers guidance
Pre-Apprenticeship, Certificate 4%
Qualifications at secondary level II (16 –20 years)
90 % post compulsory education (Sec. II)
Based on Disability Insurance Law
BSV and cantons are responsible
Canton is
responsible
Delegates
responsible for Integration
based on law governing
foreigners
Courses with part practical training
© Strahm/ hep verlag
Disability Insurance Office
Social
benefits
Professional guidance and individual coaching are key functions of effective and
lasting integration of young adults, unemployed, foreigners and disabled in the
labour market. This main task is carried out with the help of four different federal
laws through various departments, which requires coordination and inter institutional cooperation (IIZ). The social aid is regulated at cantonal level.
44
Fulltime School
In 2008 on the secondary level II (between 16 and 20 years) from the same age
group, approximately 63% graduated with Federal VET diploma EFZ or similar certification. 10% without any post-compulsory education,4% Federal VET Certificate
or pre-apprenticeship; and 23% with an Academic Baccalaureate or Specialized
Baccalaureate.Tertairy level : 59% of all young people, per year, 16% graduated
at University (Master and Bachelor), 14% at a University of Applied Aciences or at
a University for Educational Sciences, 4% at a professional college and 25% with
a higher VET (Federal Diploma of Professional Education and Training or similar).
Double counting Bachelor/Master is excluded here.
45
5.4 Entrance into work force after
completion of studies is relatively
easier for Professional College
Graduates
5.5 The labour market prefers
Professional College
Graduates
Professional situations for fresh University Graduates and Graduates
of Universities of Applied Sciences 1 year Post Graduation, 2003
Unlimited
Employment
Temporary Work
Professional situation for University and University of Applied
Sciences Graduates 5 year post Graduation , 2007
Employment with
Management Function
Engineering
and Natural
Sciences
All fields
90 %
Economics
Humanities
Medical
Sciences
100 %
80 %
98,2
96,7
93,9
93,4
UA
85 %
20 %
18 %
16%
10 %
80 %
2
3%
0%
Uni
UA
ETH / University
Uni
UA
Uni
UA
University of Applied Sciences UA
46
UA
Uni UA
Uni UA
Uni
5,3
75 %
ETH / University
Graduates from universities of applied sciences usually have already completed an
apprenticeship, as a result, they are more in demand than graduates from universities. One year after graduation, former have 80% indefinite employment, the latter only 50%. 18% of the university graduates additionally do temporary practical
work. 35% of the graduates of universities of applied sciences, a year later have
already been appointed into a managerial function, while university graduates
less, than half as many are appointed for such posts.
Economics and Services
80 %
Economics
35 %
30 %
Engineering and IT
All Universities of Applied Sciences
Uni
40 %
Engineering
All Universites
50 %
Natural sciences
91,9
90%
94,8
93
Medicine and Pharmaceutical
60 %
50 %
96,6 96,6
96,0
95 %
Social work
70 %
Humanities Arts and social sciences
80 %
Uni
University of Applied Sciences UA
The labour market requires in average more graduates of university of applied
science than university graduates. Five years after graduation from university of
applied sciences, 96.7% of these are appropriately employed and 93,9% from university.. Above all doctors and lawyers who graduated at universities show strong
employability, probably because of their practical bound studies.
47
5.6 University and Professional College
Graduates earn approximately
the same amount
5.7 One Mission – Three Partners
Professional
organisations
Curricula and
apprenticeships
All fields
Economics
Humanities
84 500.–
Engineering
And Natural
Sciences
102 900.–
Gross-yearly income post 5 year Tertiary Qualification (average), 2007.
Medical
Sciences
89 000.–
90 000.–
Medicine and Pharmaceutical
Uni UA
Social work
100 000.–
88 000.–
80 000.–
87200.–
UA
Uni UA
Uni
Humanities Arts and social sciences
2
Economics and Services
20000.–
Economics
UA
40000.–
Engineering and IT
All Universities of Applied Sciences
Uni
60000.–
Engineering
All Universites
80000.–
Natural sciences
88 000.–
100000.–
90 000.–
SFr./Year
Cantons / States
Implementation
and supervision
Confederation
Strategic management
and development
5,3
The Teaching points of vocational education (apprenticeship)
0.–
ETH / University
Uni
University of Applied Sciences UA
University- and University of Applied Sciences graduates five years later earn approximately the same amount of salary. The average gross annual income are almost equally high in the frame of the usual income dispersion. (The median value
or median income indicates the income, whereby half of the individual cases lie
above and the other half below it.)
48
At Industry or enterprise: 3 to 3½ days per week
At Vocational College: 1 to 1½ days per week
Depending on business and industry:
• Optional college: in addition ½ to 1 day per week; or during one year after
completing their apprenticeship leads to vocational Baccalaureate.
• Inter-courses: 1-2 weeks per year (organized by trade associations).
49
5.8 Training Arrangements
5.9 List of Trades under the Swiss Dual
System Apprenticeship Education
and Training Scheme:
243 Trades in 22 Vocational Fields
Vocational education and training (VET)



In-company training
In-school education
Industry courses
Professional education and training (PET)


National professional examinations
for the Federal PET Diploma and
Advanced Federal PET Diploma
Professional colleges
Example: 17 Trades in the Vocational Field “Metal, Machines”
•
•
•
•
•
•
•
•
•
Engineering Construction Technician
Gunsmith
Optical Systems Technicion
Foundry Moulder
Foundry Process Operator
Mechanical Engineeering Technicians
Cutler/Knife Maker
Metal Worker
Sheet Metal Worker
•
•
•
•
•
•
•
•
Micromechanic
Flat Polisher (watches,jewellery)
Machine Mechanic
Blacksmith/Farrier
Technical Model Maker
Industrial Watchmaker
Watchmaker-Repairer
Watchmaker-Restorer
Continuing education and training (CET)
Example: 7 Trades in the Vocational Field “Nutrition”
•
•
•
•
•
•
•
50
Baker - Confectioner
Butcher
Confectioner - Pastry Maker
Food Technologist
Dairy Technologist
Flour Miller
Oenologist
51
5.10 Example: 24 Trades in Economy
and Administration
•
•
•
•
•
•
•
•
•
•
•
•
Office Clerk
Car Trade Office Clerk
Public Administration Clerk
Bank Clerk
Chemistry Administrator
Service and Administration Clerk
Commercial Clerk
Hotel Clerk
Whole Sale Administrator
Freight Forwarder
Communication Administrator
Industrial Clerk
•
•
•
•
•
•
•
•
•
•
•
•
6
Costs of Vocational Education
and Training
Food Industry Administrator
Notary Clerk
Civil Service Administrator
Public Transport Clerk
Post Office Clerk
Private Insurance Administrator
Travel Agency Clerk
Health Insurance Administrator
Health Service Administrator
Transportation Administrator
Real Estate and Trust Administrator
Management Assistant in Advertising
The Vocational education and training in Switzerland is very economical for the
public sector. In this system of vocational education and training a greater percentage of the education cost is financed jointly by the company and its apprentices.
52
53
6
Overview
The entire education expenditure for all levels together that is measured by the
gross inland product, (so called education spending budget), compared with all
OECD countries Switzerland stands in the middle , actually slightly above OECD
country measured in average.
However, the entire expenditure does not indicate about the efficiency significantly including the labour markets’ orientation of the educational systems. The
vocational education and training in Switzerland is very economical for the public
sector.
In the system of vocational education and training a greater percentage of the
education cost is financed jointly by the host company and its apprentices.
In the second and third apprenticeship year the apprentice solely contributes to
the host company by a small percentage of net value. Over the entire three-year
apprenticeship period the host company benefits. Commercial apprentices are
therefore self-financing or even provide a small net profit for the host company; at
the same time it must be noted that the economical utility calculated on the bases
of qualification and increase in productivity („Spin-off-Effekte”) are not included.
First year business expense is on balance highly cost oriented and complex due
to supervision and vocational training staff. Therefore, it is definitely worth discussing whether one could financially relieve the host companies through the introduction of a so-called “Basic year for trainees”- the first year public financed
Vocational School. Some cantons already offer this in the professional information
technology.
Based on a survey of the Swiss coordination Unit for development research SKBF,
in 2006, conducted in about 4700 businesses, the entire economy spends approximately CHF 4.7 Billion (gross) per year on basic vocational training. (In other
countries these cost of secondary level II are financed by the public sector.). These
business cost compared with an utility of about CHF 5.2 billion through the efficiency of the trainees (3). The high utility of the qualification improvements and
increase in the productivity are not included in the above calculation. Vocational
training system is therefore practical and cost-efficient.
A similar calculation for a poly-mechanic apprentice shows that in both first and
second year the net cost for the host company remains constant. However, in the
third and fourth apprentice year a small increase in net utility occurs. On balance the
net cost for the four-year poly-mechanic education amounts to about CHF 25’900.
Overall the four-year poly-mechanic apprenticeship on balance is for the host
company a decisive cost factor. It should be considered that host companies operate not because of possible financial training gains, but rather because of trained
poly-mechanics in the machine-electro and metal industry (MEM-Industry), which
represents an absolute competitive advantage. The highest professional standard of the Poly-mechanics made the Swiss machine industry enormously efficient
contrary to all earlier negative prognoses.
54
55
6.1 Concerning the total Education
Expenditure amongst the industrialized countries Switzerland ranks
close to average
6.2 The Educational System is cost
effective for the state
Yearly expenditure incurred by the public treasury per apprentice
or student for (the part of) the school education, 2003 / 2005
Total public and private Education Expenditure indicated in
percentage against GDP, 2006
100 000
8.0
7.5
7.0
7,4
80 000
7,3
60 000
6.5
6.0
5.5
5.0
4.5
Yearly expenditure per Student Secondary Level II
SFr.
6,3
40 000
6,1
5,9
5,9
5,9
5,8
5,7
5,6
5,6
20 000
5,5
5,0
0
4,9
4,8
4,7
4,7
4.0
3.5
2.5
100 000
2.0
80 000
1.5
Students / apprentice
Baccalaureate students
attending full-time school
attending State Academic
predominantly in French
Schools
speaking part of Switzerland
88 000.–
60 000
1.0
63 000.–
40 000
0.5
20 000
d
lan
Ire
y
Sp
ain
an
ly
rm
Ita
Ge
US
A
De
nm
ark
Sw
ed
en
Be
lgi
um
Sw
itz
erl
an
d
Fra
nce
En
gla
nd
Fin
Co
lan
un
trie
d
sØ
OE
CD
Po
rtu
ga
Ne
l
the
rla
nd
s
Au
str
ia
Jap
an
0.0
The entire educational expenditure, measured against Switzerland’s GDP of 5.9%
it lies in the middle of the OECD countries. This comparison value does not say
much about the efficiency and labour market suitability of the educational systems. Over all the educational expenditure is being dealt by public sector. Only
in the USA, the educational expenses are being held by the private sector that is
more than 1% of the GDP.
56
Apprentice in host company
Education (dual system)
predominantly in German
speaking part of Switzerland
19 600.–
Yearly expenditure per Student Tertiary Level
SFr.
3.0
24 300.–
8600.–
0
36 000.–
18 000.–
Professional
College For
Economics /
Social Work
Practical Training
Professional
College of
Engineering
22 000.–
University
Humanities
University
Natural
Sciences
Federal Institute of
Technology Zurich
(ETH)
Full Time School
In company training and education is not only practical and labour market aligned, but is rather economical for the state. The vocational education schools cost the cantons calculated in Swiss average (dual system) only
SFr. 8’600 per student, full time vocational schools on the other hand cost SFr.
24’000 and for selective schools approximately SFr. 20’000 per student and year.
57
6.3 Apprentice compensate the education expenditure in Host Company
partly through productive work
7
Productivity: Key factor of international competitiveness
Gross expenditure of host company, productive performance of
apprentice in company and difference = net expenditure respectively
net profit of host company during the apprenticeship, 2006.
Net profit
Net profit
36 400
P
31 800
GC
31 900
P
26 900
GC
Net costs
26 600
P
40 000
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
– 5 000
27 100
GC
Commercial Apprentice in Host Company
SFr.
500
1500
5000
– 10 000
3. Apprentice Year
2. Apprentice Year
1. Apprentice Year
50 800
P
35 900
GC
36 600
P
14 900
Net profit
0
4400
Net profit
10 000
32 200
GC
22 700
Net costs
36 800
GC
14 100
P
20 000
12 900
P
30 000
22 500
Net costs
40 000
35 400
GC
Polytechnician Apprentice in Host Company
SFr.
50 000
3. Apprentice Year
4. Apprentice Year
– 10 000
– 20 000
1. Apprentice Year
GC = Gross costs
2. Apprentice Year
P = Productive work
Net costs / Net profit
A commercial apprentice in the 1st year costs the host company SFr. 27’100 for
salary, instructor expenditure, material etc. However, he performs productive
work worth CHF 26,600 for the company: Therefore net costs of SFr. 500 remain.
Over the entire three-year apprenticeship, the net profit amounts to about SFr.
6’000 (calculation: - SFr. 500 + SFr. 1’500 + SFr. 5’000). Analogous reads the lower
diagram for Polytechnician-apprentice.
58
Judging Switzerland with only high wages one would have to estimate her as less
competitive. In the case of competitiveness it is irrelevant how much one working
hour costs but what has been produced in that working hour. The performance
per hour is called labour productivity. Labour productivity depends on the vocational education and is being shaped by globalization and is the decisive key
factor of international competitiveness.
59
7
Overview
Switzerland compared internationally measured against wage level is a very expensive production location. Alone on the basis of labour cost Switzerland would
not be internationally competitive nor could it export profitably. Competitiveness
is a skill of a country or region that produces welfare and retains its reputation in
the world markets.
Not only is it important for achieving international competitiveness to estimate
how much one working hour cost but also what has been produced within this
hour. In order to assess comparison for international competitiveness efficient
hourly performance is applied, that means, labour productivity.
7.1 Swiss produce with high labour
costs, like other Western
Europeans
Cost in Euro per man-hour in the industry 2005
(labour cost = hourly wage + wage costs for social insurance)
Belgium
A high labour productivity permits higher wages and lower unit labour cost which
are ultimately decisive for competitiveness. Labour productivity depends on professional qualification and therefore also depends on the system of vocational
training and professional further education. In addition investment plays an important role that apart from small- and medium sized enterprises (SMEs) and company founders are abundantly and inexpensively available.
18.47
19.30
West Germany
19.64
Denmark
15.23 34.53
14.65 34.29
22.82
Switzerland
9.99 32.81
20.86
France
11.84 32.70
15.94
Netherland
16.32
17.94
Finland
Sectors competing internationally possess higher rate of productivity and therefore show a strong competitiveness. In contrast those sectors producing for the
domestic economy often often are protected, indicate lower labour productivity.
The hospitality industry is an object lesson for a sector that for a long time barely
committed for vocational training, but recruited cheap and less qualified workers
abroad and thus intensified their structural weakness.
17.37 35.84
Sweden
13.40 31.34
17.54
Austria
12.47 30.01
15.89
England
14.01 29.90
17.36
Italy
9.82
13.05
USA
12.76
Japan
7.36 22.57
7.53 20.29
10.29
Czech Republic
27.19
11.219624.26
15.20
East Germany
32.26
8.10 18.39
7.39
Hungary
7.02
Poland
5.90
Bulgaria
1.80
0
5
Hourly wages
10
15
20
25
30
35
40
Additional wage cost for social insurance
In comparison with other countries Switzerland produces with high industrial labour cost. In spite of high hourly wages, Switzerland is not the most expensive
production location, because additional wage costs (wage percent for social insurances) are lower than in other European countries. In 2005 Swiss industry calculated in average 25.50 Euro or approximately SFr. 40 cost, per man-hour. Eastern Europe showed only 4 -5 Euro.
60
61
7.2 The global positioning of the
Swiss Export Industry in High-Tech
merchandise
Country ranking based on the ratio of High-Tech exports in various
industries, 2002
Scientific Instruments
Pharmaceutical
Chemical
Mechanical Machines
Aviation and Astronautics
Electrical Machines
1.
2.
3.
4.
CH D
S
J DK US E
F SF GB I
NL B
A
I
S GB D US NL J
SF
CH DK B
E CH B
CH I
B
F US D
J
A
5.
A
6.
E
7.
F
8.
9.
F
D
I DK GB NL US A
S
E
D
I GB E
D GB S
B
Electronics
SF S
J
Information Technology
NL J
B GB US D
J US A
J
S SF
F GB SF NL DK
S
A CH DK B NL J
I
US E NL DK CH F SF
A GB DK US E
E
D
62 %
38 %
of the export products
are in markets with
competition mainly
in quality
of the export products
are in markets with
competition mainly
in prices
93 %
15 %
of these export products
have qualitative
advantage i.e. High-Tech
medical Apparatus’,
Pharmaceutical Products
Mechanical Engineering
of these export products
are price competitive
i.e. Automotive Industry
Paper & Pulp, Timber
Products, Metalproducts
SF
F
I
B NL CH
A DK F
I
S SF CH
The contribution of high-tech in major industrial goods is the deciding factor for
the competitiveness of a high income country. The Swiss industry is highly specialized in scientific instruments (precision equipment, medical gadgets, top quality watches), in pharmaceutical and chemical products and mechanical machinery
production (machine tools etc.). However, in other fields it is not so well positioned. (The country ranking has been according to the RSCA- Index, Revealed
Symmetric Comparative Advantage, considering the advanced technology in the
respective export sector).
62
Ratio of the Swiss exports which have international competitiveness
both in quality and price, 2005
10. 11. 12. 13. 14.
Quelle: KOF ETH © Strahm / hep verlag
Rank
7.3 The global positioning of the
Swiss industry with qualitative
advantage cutting edge in the
world market
Switzerland with its high income and price remains well positioned on the global
market due to its competitive quality advantage and not through pricing. 62% of its
exports enter the international markets in which qualitative and innovative competitive advantages are decisive. 93% of Swiss products in these markets have
advantage in quality. However, 38% of Switzerland’s exports are in global markets
where price competition is decisive, and from that, only 15% really have a price
advantage.
63
7.4 In Switzerland relatively lower
percentage of the population have
academic qualification
7.5 Despite lower number of academicians still highest number of
innovative enterprises
The percentage of people with Tertiary education from university
taken between the ages 25 to 64, 2005
The percentage of small and middle enterprises, which pursue and
encourage innovation, 2002/2005
45
60
55
40
35
38
50
37
34
30
46
33
32
30
29
29
45
43
40
28
25
28
27
25
38
35
24
20
30
22
29
29
26
18
15
29
24
20
22
18
12
10
10
5
64
s
nd
erl
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Bri
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at
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Sw
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Au
Sw
EU
2
en
itz
erl
an
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Ne
the
rla
nd
s
Ge
rm
an
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Sw
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Be
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Fin
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Jap
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Compared to OECD-Industrialized countries Switzerland has a relatively lower ratio of people with higher Tertiary education (University, ETH, Professional High
School). On the other hand, Switzerland has higher ratio of work force with specialized practical training (apprenticeship, Higher Professional School) and people
who participate in further education during their professional life.
nd
0
0
A paradox: Even though Switzerland has relatively less University graduates with
higher ratio of innovative SMEs, Switzerland still tops the European countries. The
explanation lies clearly in its educational system. Small enterprises are provided
with qualified skilled professionals, who bring innovation along with their practical
and theoretical skills. Additionally, an important part is played by higher ratio of
adults who participate in further and continuing education (Switzerland: ranked
third in Europe).
65
7.6 Willingness to work amongst employees in countries with VET
is highly rated
7.7 Despite high wages globalization
brings more export surplus – due
to high quality
Country comparison of workers motivation based on assessment by
International managers in a survey conducted 2003 and 2009
10 = highest mark
9
Swiss goods imported and exported with newly industrialized countries and countries in-transition emerging in the world economy, 2008
8
Import 2008
8,7
8
7,7
7,9
7
7,6
7
7,8
7,3
7,2
7,0
7,2
6,5
6
6,8
7,1
7,0
6,8
6,9
6,1
5,9
6
6,7
6,5
6,1
5,9
6,1
5
5,3
5
4,6
4
5,0
4,9
4,5
3
4
3,2
3
2,5
2
2,0
1
1,6
1,4
1
The Swiss employee’s work motivation is assessed with very high grades. This
conclusion was derived from the survey conducted in which approximately 4000
international managers participated within a framework of international competitiveness for 60 production plants for the IMD World Competitiveness Center
(Lausanne).Hence, the early and systematic educational integration through the
VET system plays a vital role for work ethics.
0,7
0,7
1,0
1,0
a
ssi
Ru
sil
Bra
Ko
rea
uth
So
Tai
wa
n
ey
Tu
rk
on
g
gk
ina
Ch
Fra
nce
y
Ita
l
an
y
Ge
rm
de
n
Sw
e
n
Jap
a
US
A
nd
s
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the
rla
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Ire
d
Fin
lan
ark
ia
Au
str
■ 2009
1,1
0
Ho
n
■ 2003
De
nm
Sw
itz
erl
an
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0,8
ia
0
2,4
2,4
Ind
2
66
Export 2008
Switzerland is, according to balance of trade the winner of globalization. It exports significantly more to the globalizing countries than it imports. The traditional industries are being displaced by cheap imported goods with advanced
technologies (wood, leather, paper, textiles, metal, toys). But at the same time the
Swiss industry supplies more with its high price investment goods, instruments,
medical and pharmaceutical products and luxury watches than it imports. We deliver expensive precision - they delivers cheap labour products.
67
The Author Rudolf Strahm
Former Swiss National Councillor Rudolf Strahm was Price Regulator of
Switzerland from 2004 to 2008. Prior
to that he was National Councillor for
13 years. He studied chemical sciences and worked in the pharmaceutical
industry for 5 years. He later studied
management and economics at the
University of Berne. He led several business associations and is now a lecturer
and writer.
Rudolf H. Strahm: Warum wir so reich
sind. Wirtschaftsbuch Schweiz,
hep Bildungsverlag Bern 2008.
Rudolf H. Strahm: Arbeit und Sozialstaat sind zu retten. Analysen und
Grafiken zur schweizerischen Wirtschaft
im Zeichen der Globalisierung.
Werd Verlag Zürich 1997.
Fenner M./Hadorn R./Strahm R.H: Politszene Schweiz. Politik und Wirtschaft
heute.
Lehrmittelverlag Katon Basel-Stadt.
Blaser/Dal Cero/Egger/Gasser/Gehrig/
Hester/Strahm/Tischhauser:
Mensch & Gesellschaft / Themabuch
zur Arbeits- und Lebenswelt.
h.e.p Verlag Bern 2. Auflage 2004
Publications
His latest book “Why we are so rich” was
published in 2008, describes the role of
quality vocational training which is the
strong piller for economic strength.
68
More Information
de.wikipedia.org/wiki/Rudolf_Strahm
www.rudolfstrahm.ch
69
With our aims, we support both the private sector and public corporations in their
efforts to adapt the Swiss model in India. Beside the promotion work, our activities
include the coordination of project implementation, provision of curriculum and
trade syllabus, listing of teaching material, english adaptation of Swiss guidelines
and related documents, as well as definition of qualifications for trade teachers and
trade supervisors.
Portrait of Rajendra & Ursula Joshi Foundation
In November 2006, we founded the Rajendra & Ursula Joshi Foundation (JCF) in
Zurich, Switzerland. The main aim of JCF is to bring the skill develoment system
similar to that in use in Switzerland, Germany and Austria to India.
Our initiative is based on experiences that began in the 1960s. Back then, we
analysed the success factors that had led to the economic boom in the markets of
German-speaking countries and came to the conclusion that the high standard of
professionalism in Switzerland, combined with a strong work ethic, was partly due
to the solid training provided by the Swiss dual system (SDS). The practical on-thejob training of school finishers combined with trade-related theoretical education
in trade schools leads to a highly qualified skilled workforce needed in industry.
Training
Industry
Trade
School
Practical Skills
on-the-job
training
Trade-related
Education
Few months after founding JCF, the establishment of Rajendra & Ursula Joshi Educational Society (JES) in India with its offices in Jaipur followed. JCF and JES
are close partners on the path to transfer knowhow from Switzerland and implement the SDS in India under the initiated “Vishwakarma Apprenticeship Education
Project”. This knowledge transfer also enjoys the support of the authorities, institutions and professional associations representing corporate members of industry,
responsible for dual skill development in Switzerland.
But this dual system cannot be adopted without participation of industry because
they define the needed trade qualifications and are responsible for the practical
training, which is always given in running industry of related trades. Once the industries agree to this system, there is no limitation for the number of apprentices
because this number is directly proportional to the number of industry which can
provide this training. The apprentices will only work under strict supervision and
with the required theoretical knowledge so that they will not endanger themselves
or any machinery. Since they are part of productivity there is always a synergy to
production.
We hope that Indian industry realises the benefit of the Swiss dual system and
adapts it for their economic growth and for the Indian society.
15 September 2010
Dr. R.K. Joshi
Mrs. U. Joshi
RAJENDRA & URSULA JOSHI FOUNDATION
Albisriederstrasse 315, 8047 Zurich, Switzerland
RAJENDRA & URSULA JOSHI EDUCATIONAL SOCIETY
510 Anchor Mall, Ajmer Road, Jaipur – 302 006, India
www.joshi-foundation.ch
70
71
bj institute – Dual VET
Our background
Guiding principles
Bruno Jehle, the founder of the institute is an entrepreneur with more than
30 years experience in professional
photography, electronic imaging, prepress, print, internet service providing,
application development, media asset
management, and communications design with international customers. In
addition to the commercial activities
he can rely on the experience of more
than 25 years of fruitful collaboration
between India and Switzerland in social & cultural projects. This foundation
guarantees farseeing planning and its
direction based on humanitarian principles.
Quality
Our objectives
bj institute promotes international exchange of know-how of specialists in
various fields. bj institute offers consulting and project management to its
customers as well as high-quality training in courses and workshops.
The bj institute is market-oriented. It
promotes and practices Swiss quality
standards.
Practical experience
The bj institute co-operates with national and international institutions
and experienced professionals in order
to offer practical experience together
with theoretical excellence.
bj institute endeavors to bring together
all parties concerned to establish a Dual
VET network. bj institute is engaged in
setting up a training school in association
with government and industry to impart
practical skills needed in real jobs. For
this purpose bj institute offers its expertise in implementing and administering
the Dual VET model to all those interested in establishing the model in India.
bj institute delivers customized training
of the trainers by experts from Switzerland and is of assistance in establishing
curricula for Dual VET, in selecting capable students, and in communicating with
VET-friendly industry.
Transfer of skills
The bj institute acts in collaboration
with international partners to promote
the transfer and application of experience and research results into new
products, techniques, and processes.
Social aspects
bj institute strives for social relevance
by performing research into matters
of national and international significance. It cultivates open dialogue with
the general public and is a trustworthy
partner.
Non-profit
bj institute is not profit-oriented and
independent of religion and political
parties.
72
bj institute is committed in enhancing
India’s vocational education and training
(VET) by introducing Dual VET combining school with practical work in industry based on the Swiss model. Intensive
discussions with all parties concerned
and the results of an industry survey have
convinced us that there is considerable
interest and a unique opportunity for implementing the Dual VET model in India
with strategic partnerships in India and in
Switzerland. To this end bj institute continues to propagate the exclusive benefits of the model for all participants by
means of campaigns and involving the
focus groups.
bj institute
Zollrain 12
CH 5000 Aarau
Switzerland
Phone: 0041 62 836 40 41
bj institute
Plot No. 77, First Floor
Syndicate Bank Colony
West Marredpally
Secundrabad 500 026
A.P. India
Phone: 0091 40 40 13 13 02
www.bjinstitute.org
[email protected]
73
www.worlddidac.org
Profile
Worlddidac is the global trade association for companies providing products for
education and training at all levels. We are the only globally operating organization in this business sector.
Who are the members of Worlddidac?
Worlddidac has 180 members from 43 countries and 5 continents. They are
grouped into the following categories:
-Manufactures and suppliers (70%)
-Distributors & Dealers (5%)
-Publishers (20%)
-National trade Associations (5%)
Trade missions:
Worlddidac facilitates the start in new markets for the members worldwide and
brings them in contact with key players.
Worlddidac Award:
The biennial organised Worlddidac Award is given to innovative and pedagogical
valuable products.
Worlddidac Quality Charter:
Worlddidac certifies member companies according the criteria of the WQC
(Worlddidac Quality Charter).
Events:
WORLDDIDAC India, WORLDDIDAC Basel, WORLDDIDAC Asia,
Worlddidac Vietnam