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Vocational Education: The Missing Link in Economic Development

Many countries face significant skills gaps across a range of industries, particularly in technical and specialized fields. These gaps persist despite distressingly high unemployment rates even in developed economies. Jobs remain unfilled even as potential workers, lacking the skills and training that industries require, sit idle.

Technical and vocational education and training (TVET) has the potential to address both challenges: closing skills gaps and reducing unemployment. However, TVET suffers from the perception that it is inferior to the general academic education (GAE) provided by traditional four-year universities. In most countries, students, parents, and career advisors still hold a strong bias in favor of degrees from traditional universities and see TVET programs as a “second tier” option that is suited for students with lower aspirations or lesser academic abilities.

The result is a negative-feedback loop: TVET schools are perceived as lower quality, which in turn limits investment in them. With insufficient investment, TVET schools increasingly suffer from inferior infrastructure relative to traditional education channels and have less money for teacher training, curriculum upgrades, and the equipment needed for students to learn the required skills. In 2008, Organisation for Economic Co-operation and Development countries spent an average of just 0.2 percent of their gross domestic product on TVET, compared with 4.3 percent of GDP on early-childhood, primary, and secondary education and 1.3 percent of GDP on traditional tertiary education. The investment shortfall leads to declining outcomes among graduates and reinforces perceptions that TVET is a lesser substitute for GAE.

A related issue is that TVET programs often lack regulatory oversight. Many countries either lack accreditation bodies or have multiple agencies that operate independently. The absence of a single national authority with a complete overview of the entire TVET landscape often leads to different, competing, or confusing standards within a single country. Without consistent regulation, TVET providers have wide latitude to craft their own content, which may lead to significant variations in quality. As a result, employers often do not know what TVET programs are teaching and cannot rely on a consistent pipeline of quality graduates. In some cases, employers have had to retrain their new hires in the skills needed for specific jobs.

Countries can reverse the negative-feedback loop by upgrading TVET schools and ensuring the relevance of TVET to employers. Such steps can generate real value for national economies by putting people to work productively. To make this happen, all stakeholders in national education systems—governments, industry players, TVET providers, and students—will need to collaborate and work to adopt best practices.

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