Source: Vietnam’s Financial Times (http://thoibaotaichinhvietnam.vn/pages/kinh-doanh/2020-07-01/can-khuyen-khich-doanh-nghiep-tham-gia-dao-tao-nghe-88907.aspx)

In Germany, the responsibility for Technical Vocational Education and Training (TVET) is shared between the government and the business sector. Dr Juergen Hartwig, the Director of the Vietnamese-German Programme “Reform of TVET in Viet Nam” in an interview with Vietnam’s Financial Times.

German TVET system is a progressive system. Can you share some experience of TVET institutes in Germany on autonomy issue?

German inter-company training centres are often owned and operated by Chambers of Skilled Crafts and offer mainly practical training. Membership in the local chamber is compulsory for all German companies. Top financing principle of an inter-company training centre is that revenues and expenses must be balanced. Revenues include state subsidies and income from service provision and training fees. All training courses regularly need to be re-calculated and the costs adapted to the number of trainees. Further training in a specific occupation, that leads for instance to a German Master craftsman degree, normally must be paid for by the participant him- or herself. However, special government support can be applied for by participants for further training. The state also subsidises boarding costs of the participants during the training. Remaining costs are financed by enterprises and participants. Furthermore, an inter-company training centre can apply for state investment in new technologies and maintenance. External auditors decide about the necessity of the investment following a clearly defined process.

In summary, it can be stated that inter-company training centres in Germany function autonomously. However, without public financial support for the training courses or investments they cannot ensure the required training quality. Experience from other countries has shown that with decreasing public support, TVET institutes tend to offer rather “white-board” occupations than cost-intensive industrial occupations which are needed for a demand-oriented TVET system.

In Germany, the responsibility for TVET, including financial responsibility, is shared with enterprises. What do you think about the cooperation between TVET institutes and the business sectors in Vietnam?

Vietnamese policies increasingly promote and encourage TVET institutes’ autonomy and the cooperation with the business sector in TVET. However, private investment in public TVET institutes and the cooperation between TVET institutes and companies is still rather low. The incentive structure for the business sector to engage more in TVET and increase contributions could be improved by enabling and promoting tax exemption and other incentives.

Piloted cooperative training programmes within the Vietnamese-German Programme “Reform of TVET in Viet Nam” provide evidence that companies have started to recognise the benefits of their investments in a trilateral training partnership between companies, TVET institutes and trainees. The business sector participates in the development of demand-oriented training programmes, the implementation of in-company training phases and the examination and certification of the trainees. Some companies are even voluntarily offering a training allowance to their trainees during in-company training phases.

Regarding the German experience, some aspects have already been mentioned above. Another interesting experience can be derived from practices in the German construction sector: Here, all companies pay 2.1% of the total gross wage of their employees into a training fund, regardless of whether they offer in-company training or not. Training companies are reimbursed through the fund for parts of training costs in the company or at inter-company training centres and the trainees’ allowances.

In Germany, most of the inter-company training centres are autonomous. Can you explain how those centres work?

In Germany, the responsibility for TVET, including the financial responsibility, is shared between the government and the business sector. In the dual system, apprentices start their vocational training, lasting on average three years, with a company training contract. In most cases, apprentices spend three days a week working and learning in the company and two days a week in a public TVET school. On average, 70% of training, mainly the practical parts, take place in companies or inter-company training centres and 30% of training, mainly the theoretical parts and general subjects, take place in public TVET schools. Public TVET schools in Germany fully depend on state fund allocations for recurring and non-recurring costs e.g. salaries, consumables, investments in infrastructure and equipment. However, since practical training is conducted to a large extend in companies, public TVET schools in Germany do not need to invest in expensive technical workshop equipment.

Companies pay training allowances to the apprentices, train and provide in-company trainers and cover all work-place training related expenses. Companies invest on average 18,000 EUR per apprentice per year, including the training allowance. Depending on the occupation, up to 100 % or more of this investment is refinanced by the productive contribution of trainees during the full training period. In 2019 alone, employers contributed 7.7 billion EUR to the dual vocational training, while state expenditures amounted to 6.84 billion EUR.  

Apprentices receive an average training allowance of approximately 900 EUR gross per month (2018) and the theory training in vocational schools is free of charge. In Germany, almost 430,000 out of 2.16 million companies (20%) provided training in 2019. Most of these enterprises are small and medium size companies. Therefore, it is often difficult for companies to cover all vocational and educational contents, so companies often engage in training networks and share training responsibilities for parts of the apprenticeship. In addition, certain occupations require courses in so-called inter-company training centres. Inter-company training centres are autonomous in personnel and organisational aspects. Financially, they have diverse income sources. Although they can be considered financially autonomous, they generate the lion’s share of their income from public subsidies, particularly for initial training offers.

Thank you for the interview

The Programme “Reform of TVET in Viet Nam” has advised the Vietnamese government in its objective to develop the organisational and personnel autonomy of TVET institutes. Concerning financial autonomy, it seems important to increase the contributions of the business sector while at the same time improving demand orientation of training programmes and the skills and competencies of TVET graduates. This can be achieved via the active involvement of experts from industry, companies, professional associations and the VCCI in the development of standards and training programmes, in the implementation of in-company training phases and in the examination of graduates. More training in industry will also reduce the training costs of TVET institutes.

The results of the piloted training programmes in technical trades and in water treatment at selected TVET institutes, in close cooperation with the industry, have been very positive and will further be disseminated. With support from the German Technical and Financial Cooperation, selected Vietnamese TVET institutes are being developed to high quality training institutes that also fulfil similar functions in some respects to the above described inter-company training centres in Germany. Thus, the success factors from the German dual TEVT approach, adapted to the Vietnamese needs and background, help to support the Vietnamese Government in its efforts to promote and further develop autonomy of TVET institutes.