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1
Swiss Vocational Education and Training Switzerland’s Source of Richness
Rudolf H. Strahm
1
Swiss Vocational Education and Training Switzerland’s Source of Richness
Rudolf H. Strahm
www.bjinstitute.org
Rajendra & Ursula Joshi Foundationwww.joshi-foundation.ch
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
RAJENDRA & URSULA JOSHI CHARITABLE FOUNDATION
www.worlddidac.org
worlddidac 2010
2 3
Foreword by EditorIt is our belief, that Vocational Education and Training (VET) offers still many op-portunities in our today’s world. High-level workplace skills are generally con-sidered 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 eco-nomic 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 op-portunities 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 pos-sess 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 mak-ing this a reality. For vocational training to live up to its potential, we need a mod-ernized 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 peo-ple 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.
Worlddidac is an international Association for producers and distributors of educational resources. We commit ourselves worldwide to education and train-ing. Worlddidac has 180 members in 43 countries and 5 continents. By offering WORLDDIDAC exhibitions in India, Thailand, Vietnam and since 1966 in Switzer-land, 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 Worlddi-dac 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 DirectorWorlddidac AssociationBern, September 2010
4 5
Foreword by AuthorThere are already sufficient numbers of textbooks of economy, that teach defi-nitional 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 eco-nomic paradox that Switzerland from the nineties until our current century had the lowest growth rate of all industrialised countries but still had the lowest un-employment 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 co-relates 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 al-though 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 Swit-zerland. 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.
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 techni-cian, 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 voca-tional 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 be-stseller 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 recogni-tion 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. StrahmHerrenschwanden, Switzerland, March 2010
6 7
Contents
Foreword by Editor 2
Foreword by Author 4
1. Country comparisons: Switzerland in the league of the richest countries 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
7. Productivity: Key factor of international competitiveness 59
The Author 69
Portrait JCF 70
Portrait bj institute 72
8 9
Switzerland belongs to the richest, strongest export and most competitive coun-tries of the world. Compared with almost all economic parameters Switzerland leads the race. Especially small and medium sized enterprises are the main con-tributors to this success. The domestic-and support work often neglected as unpaid economy undoubtedly also contribute to this wealth and welfare.
1 Country comparisons: Switzerland in the league of the richest countries
10 11
1 OverviewWe will introduce in this introductory chapter few economic and non-economic benchmark figures for the prosperity and Swiss welfare compared by international standards.
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.
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 high-est 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.
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. 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.
Switzerland
USA
Singapore
Sweden
Denmark
Finland
Germany
Japan
Canada
Nether-lands
USA
Hong kong
Singapore
Switzerland
Denmark
Sweden
Australia
Canada
Finland
Nether-lands
1
34
56
78
910
23
54
78
910
Based on WEF Based on IMDWorld Economic Forum International Institute for
Management Development
The Global Competitiveness Report World Competitiveness Yearbook
Rating 2009 Rating 2009
2
6
1
1.1 The Swiss economy ranks among the top International countries
From the business perspective the Swiss economy is classified among the most competitive national economies of the world. Both in the world rank-ing 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).
Ranking of the international competitiveness, 2009
12 13
1.3 Switzerland among the world champions in export
1.2 Switzerland in the league of the richest countries of the world
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 55Philippines 56
India 57
Luxembourg 1 Norway 2 Switzerland 3 Denmark 4 Ireland 5 Netherlands 6 Sweden 7 Finland 8 Austria 9 Belgium 10 USA 11 France 12 Germany 13 Great Britain 14 Italy 15 Japan 16 Singapore 17 Spain 18 Greece 19 Hong kong 20
Indonesia 55 Philippines 56 India 57
One thousand US-Dollars One thousand US-Dollars
0 20 40 60 80 100 0 10 20 30 40 50 60 70 80120
Gross Domestic Product (GDP) in US-Dollar per head, 2008
Ranking calculated with exchange rates
Ranking compared to purchasing power
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 cur-rency 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 Luxem-bourg, oil rich Norway).
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 Switzer-land ranks second after Ireland as export countries. The Swiss economy is export-oriented and already significantly globalised.
Exports of goods in US-Dollars per capita 2008
Belgium*
Netherlands*
Ireland
Switzerland
Austria
Denmark
Sweden
Finland
Germany
France
Italy
Great Britain
Japan
USA
China
India
0 10 000 20 000 30 000 40 000 50 000
*Port-Transit- Countries in US-Dollars
44 700
38 400
28 000
26 400
21 800
21 300
19 900
9800
18 200
17 900
9100
150
4200
1070
7500
6100
14 15
1.5 Swiss population is one of happiest in the world
1.4 Switzerland amongst the top countries with surplus foreign exchange
Besides three Asian export countries and oil rich countries Switzerland has the highest balance of payments surplus. The surplus budget is the sound and convinc-ing 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.
Balance of payments Surplus / Deficit as percentage of Gross Domestic Product (GDP) 2007
Deficit ⊖ ⊕ Surplus
–15 % –12 % –9 % 0 % 3 % 6 % 15 %
14,8Singapore
Hong Kong
China
Netherlands
Switzerland
Sweden
Germany
Japan
Denmark
Finland
Great Britain
France
India
Italy
Ireland
USA
Greece
12 %9 %–6 % –3 %
14,2
10,2
2,0
9,5
9,3
8,3
6,6
3,2
1,0
–1,7
–2,0
–2,5
–3,2
– 4,7
– 4,7
–14,4
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 Erasmus-University 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.
Collective indicator for people’s sentiment of happiness, 2004
Switzerland
Denmark
Malta
Ireland
USA
Great Britain
Germany
Austria
Italy
Chile
France
India
South Africa
Turkey
Kenya
Ukraine
0 1 2 3 4 5 6 7 8 9 10
unsatisfied very satisfied
8,0
8,0
8,0
7,8
7,4
7,2
7,1
7,0
6,9
6,9
6,6
3,6
5,5
5,7
5,6
5,6
16 17
1.6 The Swiss wealth does not originate from the banks only
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 em-ployees 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 monop-olistic oriented rather multifarious sectors contributing profoundly to its wealth.
Strong business sectors according to employees (2008) and its contribution to the Gross Domestic Product (GDP) (2007)
0
10000
0
20000
0
Wholesale and Retail business
Health care
Service Sectorfor Enterprises
Construction Industry
Machine, Electrical / Electronicsand Metal Industrie ( MEM )
Hospitality
Banks and Financial Sector
Precision and MechanicalGadgets / Watches
Chemical Industry
0 2 4 6 8
11,6 %
6,1 %
7,3 %
5,4 %
6,6 %
2,3 %
9,2 %
3,0 %
4,2 %
EmployeesValue added in % of GDP
70 000
98 000
60000
0
50000
0
40000
0
30000
0
524 000
132 000
234 000
275 000
302 000
380 000
482 000
10 12
A Paradox: Despite low economic growth, lowest unemployment
2
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 para-dox situation lies in the vocational education training system that enables more people to work and integrates them into the labour market.
18 19
2 OverviewThere is a paradox in the Swiss economy which economic theories are unable to explain:
During the nineties Switzerland compared by international standards had the low-est 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 econo-mies 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.
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 educa-tion 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.
Switzerland with the lowest economic growth in the nineties
2.1
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-opera-tion 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.
Rate of yearly average growth of Gross Domestic Product (GDP) from 1992 till 2005 (14 years)
Irela
nd
0
1
2
3
4
5
6
7
Pola
nd USA
Norw
aySp
ain
Gree
ceGr
eat B
ritai
n
all O
ECD-
Coun
trie
sFi
nlan
dSw
eden
Denm
ark
Neth
erla
nds
Aust
riaPo
rtug
alFr
ance
Belg
ium
Germ
any
Italy
Japa
nSw
itzer
land
6,4
4,5
3,32,9 2,8
2,7 2,6 2,6
1,11,11,21,3
1,91,92,12,22,3
1,9
3,1
2,3
20 21
2.2 Despite the low economic growth Switzerland still had the lowest unemployment rate
Despite the low economic growth Switzerland had the highest rate of employment
2.3
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).
Average unemployment rate from 1992 - 2005 (14 years)
0
2
4
6
8
10
12
14
16
Pola
nd
Finl
and
Fran
ceIta
lyGr
eece
Irela
ndBe
lgiu
mGe
rman
ySw
eden
all O
ECD-
Coun
trie
sGr
eat B
ritai
nDe
nmar
kPo
rtug
alUS
ANo
rway
Neth
erla
nds
Aust
riaJa
pan
Switz
erla
nd
14,0
15,3
11,6
10,2
9,89,1
8,5 8,4 8,3
7,3 7,0 6,7
5,9 5,85,4
4,6
3,64,0
4,5 4,2
Spai
n
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.
Average employment ratio between the period 1994 and 2005 (12 years)
0
10
20
30
40
50
60
70
80
90
Switz
erla
ndDe
nmar
kNo
rway
Aust
riaJa
pan
Swed
enNe
ther
land
sGr
eat B
ritai
nUS
AGe
rman
yPo
rtug
al
all O
ECD-
Coun
trie
sFi
nlan
dIre
land
Belg
ium
Fran
ceSp
ain
Gree
ceIta
lyPo
land
83
76 75 74 74 73 72 71 71
545557
596161
6465667070
22 23
2.4 The countries with apprenticeship system had lower rate of unem-ployment amongst its youth prior to the financial crises
Countries with vocational training system still have lower rate of unemployment amongst its youth during the financial crises
2.5
Unemployment rates of adolescence between 15 – 24 years (only concerning the youth who are no longer in vocational training), 2008 before the financial crises
0
5
10
15
20
25
Swed
en
Spa
in F
inla
nd
Gre
ece
Ita
ly
Fr
ance
USA
G
reat
Brit
ain
Portu
gal
Belg
ium
Den
mar
k
Aus
tria
G
erm
any
Switz
erla
ndHo
lland
2524
2221
17
14 14 14 14
7 7 7 76
11
incl
Eas
tØ 19%
Ø 7%
Wes
t
Industrialised countries with only theoreticaleducation without vocational training, 19% average
5 industrialised countrieswith vocational training7% average
20
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.
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
0
10
20
30
40
50
Spai
nIrl
and
Italy
Sw
eden
Fran
ceFi
nlan
dLu
xem
bour
gGr
eat B
ritai
nPo
rtug
al
USA
Denm
ark
Aust
riaGe
rman
y (W
est)
Holla
ndSw
itzer
land
43
2827 27
2523 22
20 19 19
12 10
6 7 6
10
incl
Eas
t
Ø 25%
Ø 8%
Industrialised countries with only theoretical education without vocational training,
5 industrialised countries with vocational training8% average25% average
Countries which are conversant with apprenticeship system – a combination be-tween 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 ena-bles 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.
24 25
Vocational Education and Training(VET) Key to Employability
3
Regions and population groups in Switzerland with lower percentages of voca-tional 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 mar-ket. The consequence is mass youth unemployment.
26 27
3 OverviewThere 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 af-fected 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 Switzer-land’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.
Compared internationally, Switzerland’s unique vocational education and training system enables a larger percentage of the youth and adults in to working life re-sulting in the lowest youth unemployment and lowest unemployment in general.
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.
Swiss Educational System is difficult to be compared with other countries Switzerland is exceptional with Baccalaureate
3.1
Compared to each other the educational systems of the countries are extremely different. The ratio of the youth, finding access to higher education, with Aca-demic 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 Bac-calaureate 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.
Rate of admission to University compared internationally, 2005 (the average age of students completing Baccalaureate and Professional Baccalaureate indicated in percentage)
0% 20% 40% 60% 80% 100%
Finland
Ireland
Italy
USA
Sweden
Japan
Portugal
Belgium
Country Average Ø OECD
Holland
Denmark
France
Spain
Germany
Switzerland
Ratio in age groups
97
91
77
75
74
70
65
61
61
60
55
52
45
41
26
28 29
International comparison amongstyouth: Countries with VET system havethe lowest youth unemploy-ment
3.3International comparison: Coun-tries lacking in apprenticeship system havemore youth without professional education training
3.2
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 Nether-lands. 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.
Ratio in percentage between the ages of 18 – 24 without secondary level II qualification (unskilled youth) in Europe (2007)
0% 10% 20% 30% 40% 50%
Portugal
Spain
Norway
Italy
Great Britain
EU-15
Greece
France
Germany
Belgium
Denmark
Ireland
Netherlands
Austria
Sweden
Finland
Switzerland
36
31
21
19
17
17
15
8
8
9
11
12
12
12
12
13
13
Countries with VET system have a lower rate of youth unemployment than all oth-ers: Switzerland, Holland, Denmark, Germany. The VET system facilitates a quicker integration of the youth in the labour market. Countries with only theoretical edu-cation at secondary level II such as Finland, the Latin countries and southern Europe have significantly higher rate of youth unemployment.
Rate of unemployed youth in percentage 15 – 24 years in Europe (EU, autumn 2009)
0% 10% 20% 30% 40% 50%
Spain
Ireland
Italy
Sweden
Greece
France
Finland
Luxembourg
Belgium
EU-15
Great Britain
Portugal
Denmark
Germany
Austria
Norway
Netherlands
Switzerland
42,9
28,4
26,9
26,8
25,2
12,0
10,3
10,2
9,1
7,2
5,3
22,5
21,5
20,4
20,6
19,7
18,9
24,7
30 31
International comparison amongst adults: Switzerland has the lowest ratio of unskilled workers
3.4 International comparison amongst adults: Rate of unemployment is lower in countries with VET system
3.5
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 drop-outs from school and employees to achieve professional qualification.
Ratio of adult working population without post – compulsory education between 25 – 54 years in West Europe (2008)
0% 10% 20% 30% 40% 50% 60% 70% 80%
Portugal
Spain
Italy
Greece
EU-15
Ireland
Luxembourg
France
Belgium
Great Britain
Netherlands
Denmark
Norway
Finland
Austria
Sweden
Germany
Switzerland
70,0
42,0
38,3
34,7
25,7
25,1
24,4
9,8
11,1
12,4
14,9
15,1
16,5
18,2
21,3
21,3
21,4
24,0
Countries with low unskilled workers quota also indicate a low rate of unemploy-ment: Switzerland, Austria, Holland and Germany (enormous difference between east and west). Norway is a statistical exceptional case (fishery, crude oil exporter).
Percentage of unemployment rate amongst adults between 25 – 49 of working population in West Europe (EU-15, 2008)
0% 2% 4% 6% 8% 10% 12%
Spain
Germany
Portugal
Finland
Greece
France
EU-15
Italy
Sweden
Belgium
Great Britain
Ireland
Luxembourg
Austria
Switzerland
Denmark
Netherlands
Norway
10,4
7,7
7,4
7,3
7,2
7,0
6,9
6,8
6,8
6,3
5,2
5,2
5,0
3,4
3,4
3,1
2,8
2,7
32 33
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 exclud-ed here. The employability is strongly influenced both through the VET system and integration of working women.
75% 80% 85% 90% 95%
Sweden
Denmark
Switzerland
Netherlands
Portugal
France
Finland
Norway
Austria
Germany
Belgium
EU-15
Great Britain
Luxembourg
Greece
Spain
Ireland
Italy
91,0
90,5
90,0
89,6
89,6
89,5
89,2
89,1
88,8
88,1
87,5
86,2
85,3
85,1
84,2
84,2
82,8
79,4
Percentage of employed population among adults between 25 – 49 years (= employment ratio) in Western Europe (EU-15, 2008)
International comparison amongst adults: Better the VET qualification higher guaranteed integration into the working life
3.6 Formation and Social Question4
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.
34 35
4 OverviewInsufficient 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 con-ditions.
For the majority of the population, namely the youth with more practical than cognitive abilities, an apprenticeship is the surest way of ensuring self-responsi-bity and lifelong protection, to higher wages and therefore avoiding from social welfare benefit dependency. However, economizing in education and apprentice-ships , 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.
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”.
Employees with basic compulsory education without apprenticeship or further ed-ucation (“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.
Rate of unemployment amongst the various educational qualifica-tions; Statistically evaluated result of population survey conducted in 2000 (total population census)
Compared to average rate of unemployment (= 100%)
0
100
200
CompulsorySchool only(unskilled)
Vocationaltraining
Highervocationaltraining(mastertraining)
Secundaryschool level II
Commercialschool fulltime
University
Ø =100
170%
60%
80%
45%
100%
130%
Employees with vocational training are the least vulnerable to be unemployed
4.1
36 37
Educational training is the decisive factor how the economic cycle affect employ-ment: During a rapid economic growth unskilled workers will be disproportionally employed. Yet, in a recession, they act as“ economic cycle buffer” and are fre-quently disproportionally dismissed – like the economic principle says: last in - first out.
Unemployment based on various educational level in economic process
0%
5%
10%
15%
20%
25%
West GermanyRate of unemployment based on qualification groups in economic process, 1995-2004
1%2%3%4%5%6%7%8%
SwitzerlandLevel of unemployment based on various educational level in economic process, 1991-2006
30%
1975
1980
1985
1990
1995
2000
2005
Unskilled
University of applied sciencestotal rate of unemployment
VET / Degrees from professional colleges
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Unskilled
Professional qualifications / secondary level II
Academicians
1991
1992
2008
Economic fluctuations target the unskilled workers more than people with professional qualifications
Insufficient initial training poses the biggest poverty risk in the labour market
4.2 4.3
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 pov-erty 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.
Ratio of the “working poor” according to educational status 2005(working poor = full time employed people who live in poverty)
0 %
2 %
4 %
6 %
8 %
10 %
12 %
average of alllevel of employedpeople
without postcompulsaryeducation(unskilled)
Academicianswith VET
4,2 %
11,4 %
4,2 %
1,6 %
38 39
VET is the best social protection Apprenticeship and professional further education it is worth it
4.4 4.5
The social value of the vocational education and training is statistically proven: Higher wages thanks to higher productivity, much lower unemployment- and so-cial aid risk, better mastering of quick economical structural changes that repre-sent 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.
Statistical syntheses:VET/PET and Social status are intertwined
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.
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. Gradu-ates 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.
Gross monthly pay according to level of educational qualification and required standards
0
2000
4000
6000
8000
10000
Unskilled workers without professionaldiploma
Apprenticeship VET diplomaskilled workers
Apprenticeshipskilled workerswith higher VET diploma
University of applied sciences
Federal institute of technology(ETH)
4900 SFr.
6600 SFr.7500 SFr.
8500 SFr. 8900 SFr.
0
2000
4000
6000
8000
10000
Total economy (average, full time, 12 month salary) 2008
Ordinary tasks / unskilled With professional skillsand subject knowledge(qualified)
Qualified, demandingchallenging workmiddle management
4131 SFr.4868 SFr. 5147 SFr.
5852 SFr.6508 SFr.
8068 SFr.
ø 4500 SFr. ø 7600 SFr.ø 5600 SFr.
Machine, Electronic and Metal Industry (average 13 month salary) 2008 SFr.
SFr.
40 41
Swiss System of Vocational Education and Training
5
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.
42 43
5 OverviewIn this chapter we will discuss the Vocational Education and Training System compared to international standards.
The Swiss educational system maintains two educational paths side by side and is officially acknowledged as “equivalent however different”.
On one hand the practical training with its education levels apprenticeship (VET basic education ),Federal Vocational Baccalaureate Examination, professional col-lege HF, University of applied sciences FH; and on the other hand the purely scho-lastic 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.
However, the former mentioned path is neither compatible nor comparable with educational systems of the most European countries and the OECD world. Com-pared with international standards Switzerland shows a very low percentage in higher education qualification as majority of the Swiss youth start their profes-sional career with an apprenticeship.
The Bologna model is aligned to purely scholastic education and does not value the vocational education such as an apprenticeship.
The ambitious model “university landscape of Switzerland” that aligns itself to-wards 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 ab-sence 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.
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 Uni-versity 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.
The official systematic education model and different possibilities of achieving it
Que
lle: B
otsc
haft
Bund
esra
t BBG
© S
trah
m / h
ep v
erla
g
Adv. Federal PET Diploma / Federal PET Diploma
Professional College
University of Applied Science
University und ETH
Professional education and training University level
VET Certificate (2Years)
Compulsory education (primary school / secondary-level 1)
Basic VET (secondary -level / apprentice) in companies, vocational schools, trade schools and commercial schools
Pre-apprenticeship /Bridge-year courses
General education schoolsBaccalaureate
Vocational Baccalaureate
Federal VET Diploma (3 or 4 Years)
Academic Baccalaureate
VET/PET Academic Compulsory direct Access with additional schooling schooling education access qualifications
prim
ary
scho
olse
cond
ary
leve
l I
seco
ndar
y le
vel I
I
Te
rtia
ry le
vel
The Swiss education system with theoretical and practical education and training
5.1
44 45
Professional guidance – the decisive link between civil society and school and the world of employment
5.2
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 institu-tional cooperation (IIZ). The social aid is regulated at cantonal level.
Legal and institutional classification of tasks in the key function of the professional guidance and integration in the labour market.
© S
trah
m / h
ep v
erla
g
Occupational guidance o�ce
Based on VET LawVET and cantons are responsible
Regional employment agency
Based on unemployment insurances law
BCO and cantons are responsible
Disability Insurance O�ce
Based on Disability Insurance LawBSV and cantons are responsible
Delegates responsible for Integration
based on law governing foreigners
Integration into labour market through
vocational education and training and careers guidance
Social bene�ts
Canton is responsible
The strength of Switzerland: Practical training oriented Qualifications are quantatively predominant
5.3
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 cer-tification. 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.
Estimated ratio of education qualifications at secondary level II and tertiary level in percentage for the entire 2008.
Que
lle: B
FS ©
Str
ahm
/ hep
ver
lag
No further educationat tertiary level
41 %
Higher VET / PET
25 %
FH & PHUniversityof AppliedSciences
14 %
UniversityETH16 %
Without any
VET/PETQuali-
fication
10 %
Basic Professional Education(Apprenticeship, Commercial School)
63%
AcademicBaccalaureate
and specializedBaccalaureate
23 %
Professional
Baccalaureate
11 %
Prof
essi
onal
Col
lege
s 4
%
Pre-
App
rent
ices
hip,
Cer
tific
ate
4%
Qualifications at tertiary level (above 20 years)
Qualifications at secondary level II (16 –20 years)
Courses with part practical training Fulltime School
59 % with higher education (tertiary)
90 % post compulsory education (Sec. II)
46 47
Entrance into work force after completion of studies is relatively easier for Professional College Graduates
5.4
Graduates from universities of applied sciences usually have already completed an apprenticeship, as a result, they are more in demand than graduates from universi-ties. One year after graduation, former have 80% indefinite employment, the lat-ter 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.
Professional situations for fresh University Graduates and Graduates of Universities of Applied Sciences 1 year Post Graduation, 2003
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
80%
Uni UA Uni UA Uni UA
50%
80%
18%
Unlimited Employment Temporary Work
Employment withManagement Function
3%
16%
35%
ETH / University University of Applied Sciences UA
The labour market prefers Professional College Graduates
5.5
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 uni-versity.. Above all doctors and lawyers who graduated at universities show strong employability, probably because of their practical bound studies.
Professional situation for University and University of Applied Sciences Graduates 5 year post Graduation , 2007
75%
80%
85%
95%
100%
2
Engineering
All fieldsand NaturalSciences Economics
Medical Sciences
90%
5,3
Humanities
Nat
ural
sci
ence
s
All
Uni
vers
ites
All
Uni
vers
itie
s of
App
lied
Scie
nces
Engi
neer
ing
Engi
neer
ing
and
IT
Econ
omic
s
Econ
omic
s an
d Se
rvic
es
Hum
anit
ies
Art
s an
d so
cial
sci
ence
s
Soci
al w
ork
Med
icin
e an
d Ph
arm
aceu
tica
l
93,9
96,7
91,9
96,0
98,2
96,6 96,6
93,493
94,8
Uni UA Uni UA Uni UA
ETH / University University of Applied Sciences UA
Uni UA Uni
48 49
University and Professional College Graduates earn approximately the same amount
5.6
University- and University of Applied Sciences graduates five years later earn ap-proximately the same amount of salary. The average gross annual income are al-most 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.)
Gross-yearly income post 5 year Tertiary Qualification (average), 2007.
0.–
40000.–
60000.–
100000.–
SFr./Year
2
All fields
EngineeringAnd NaturalSciences Economics Sciences
80000.–
5,3
MedicalHumanities
Nat
ural
sci
ence
s
All
Uni
vers
ites
All
Uni
vers
itie
s of
App
lied
Scie
nces
Engi
neer
ing
Engi
neer
ing
and
IT
Econ
omic
s
Econ
omic
s an
d Se
rvic
es
Hum
anit
ies
Art
s an
d so
cial
sci
ence
s
Soci
al w
ork
Med
icin
e an
d Ph
arm
aceu
tica
l
20000.–
8000
0.–
8800
0.–
8720
0.–
102
900.
–
100
000.
–
8450
0.–
8900
0.–
9000
0.–
9000
0.–
8800
0.–
Uni UA Uni UA Uni UA
ETH / University University of Applied Sciences UA
Uni UA Uni
One Mission – Three Partners5.7
Cantons / StatesImplementation and supervision
ProfessionalorganisationsCurricula andapprenticeships
ConfederationStrategic managementand development
The Teaching points of vocational education (apprenticeship)
At Industry or enterprise: 3 to 3½ days per weekAt 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).
50 51
Training Arrangements5.8
Vocational education and training (VET)
Continuing education and training (CET)
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
List of Trades under the Swiss Dual System Apprenticeship Education and Training Scheme:243 Trades in 22 Vocational Fields
5.9
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
Example: 7 Trades in the Vocational Field “Nutrition”
• Baker - Confectioner• Butcher• Confectioner - Pastry Maker• Food Technologist• Dairy Technologist• Flour Miller• Oenologist
52 53
Example: 24 Trades in Economy and Administration
5.10
• 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
• 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 per-centage of the education cost is financed jointly by the company and its appren-tices.
Costs of Vocational Education and Training
6
54 55
6 OverviewThe 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 signifi-cantly 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.
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 oper-ate 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 stand-ard of the Poly-mechanics made the Swiss machine industry enormously efficient contrary to all earlier negative prognoses.
First year business expense is on balance highly cost oriented and complex due to supervision and vocational training staff. Therefore, it is definitely worth dis-cussing whether one could financially relieve the host companies through the in-troduction 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 ap-proximately 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 ef-ficiency 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.
56 57
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 sys-tems. 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.
Total public and private Education Expenditure indicated in percentage against GDP, 2006
USA
Denm
ark
Swed
enBe
lgiu
mSw
itzer
land
Fran
ceEn
glan
dFi
nlan
dCo
untr
ies Ø
OEC
DPo
rtug
alNe
ther
land
sAu
stria
Japa
n
Italy
Germ
any
Spai
nIre
land
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
7,4 7,3
6,36,1
5,9 5,9 5,9 5,8 5,7 5,6 5,6 5,5
5,0 4,9 4,8 4,7 4,7
Concerning the total Education Expenditure amongst the industri-alized countries Switzerland ranks close to average
6.1 The Educational System is cost effective for the state
6.2
In company training and education is not only practical and labour mar-ket aligned, but is rather economical for the state. The vocational educa-tion 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.
Yearly expenditure incurred by the public treasury per apprentice or student for (the part of) the school education, 2003 / 2005
Apprentice in host companyEducation (dual system)predominantly in German speaking part of Switzerland
Students / apprentice attending full-time school predominantly in French speaking part of Switzerland
Baccalaureate students attending State Academic Schools
Yearly expenditure per Student Secondary Level II
0
20000
40000
60000
80000
100000
Professional College For Economics /Social Work
UniversityNatural Sciences
UniversityHumanities
Professional College of Engineering
Federal Institute of Technology Zurich (ETH)
Yearly expenditure per Student Tertiary Level
8600.–24 300.– 19 600.–
18 000.–
36 000.–22 000.–
63 000.–
88 000.–
Practical Training Full Time School
SFr.
SFr.
0
20000
40000
60000
80000
100000
58 59
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.
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.
Commercial Apprentice in Host Company
Polytechnician Apprentice in Host Company
– 5 000
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
– 10 000
– 10 000
– 20 000
0
10 000
20 000
30 000
40 000
50 000
2710
0G
C
2690
0G
C
3180
0G
C
3190
0 P
2660
0 P 3640
0 P
Net
cos
ts
15005000
3540
0G
C
2250
0N
et c
osts
1290
0P
3680
0G
C
2270
0N
et c
osts
1410
0 P
4400
Net
pro
fit
3660
0P 35
900
GC
1490
0 N
et p
rofit
1. Apprentice Year 2. Apprentice Year 3. Apprentice Year
1. Apprentice Year 2. Apprentice Year 3. Apprentice Year 4. Apprentice Year
GC = Gross costs P = Productive work Net costs / Net profit
SFr.
SFr.
Net
pro
fit
Net
pro
fit
500
5080
0 P
3220
0G
C
Apprentice compensate the educa-tion expenditure in Host Company partly through productive work
6.3 Productivity: Key factor of inter-national competitiveness
7
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 vo-cational education and is being shaped by globalization and is the decisive key factor of international competitiveness.
60 61
7 OverviewSwitzerland compared internationally measured against wage level is a very ex-pensive 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.
A high labour productivity permits higher wages and lower unit labour cost which are ultimately decisive for competitiveness. Labour productivity depends on pro-fessional qualification and therefore also depends on the system of vocational training and professional further education. In addition investment plays an im-portant role that apart from small- and medium sized enterprises (SMEs) and com-pany founders are abundantly and inexpensively available.
Sectors competing internationally possess higher rate of productivity and there-fore 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.
In comparison with other countries Switzerland produces with high industrial la-bour cost. In spite of high hourly wages, Switzerland is not the most expensive production location, because additional wage costs (wage percent for social in-surances) are lower than in other European countries. In 2005 Swiss industry cal-culated in average 25.50 Euro or approximately SFr. 40 cost, per man-hour. East-ern Europe showed only 4 -5 Euro.
Cost in Euro per man-hour in the industry 2005 (labour cost = hourly wage + wage costs for social insurance)
0 5 10 20 25 35 40
Belgium
Sweden
West Germany
Denmark
Switzerland
France
Netherland
Finland
Austria
England
Italy
USA
East Germany
Japan
Czech Republic
Hungary
Poland
Bulgaria
17.3718.47 35.84
15.2319.30 34.53
14.6519.64 34.29
9.9922.82 32.81
11.8420.86 32.70
16.3215.94 32.26
13.4017.94 31.34
12.4717.54 30.01
14.0115.89 29.90
9.8217.36 27.19
11.219613.05 24.26
7.3615.20 22.57
7.5312.76 20.29
8.1010.29 18.39
7.39
7.02
5.90
1.80
Hourly wages Additional wage cost for social insurance
3015
Swiss produce with high labour costs, like other Western Europeans
7.1
62 63
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 special-ized in scientific instruments (precision equipment, medical gadgets, top qual-ity watches), in pharmaceutical and chemical products and mechanical machinery production (machine tools etc.). However, in other fields it is not so well posi-tioned. (The country ranking has been according to the RSCA- Index, Revealed Symmetric Comparative Advantage, considering the advanced technology in the respective export sector).
Country ranking based on the ratio of High-Tech exports in various industries, 2002
Que
lle: K
OF
ETH
© S
trah
m / h
ep v
erla
g
Scientific Instruments
Pharmaceutical
Chemical
Mechanical Machines
Aviation and Astronautics
Electrical Machines
Electronics
Information Technology
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.Rank
CH D S J DK US E F SF GB I NL B A
CH DK B I A E F S GB D US NL J SF
E CH B F D I DK GB NL US A J S SF
CH I B S E D J US A F GB SF NL DK
F US D I GB E S A CH DK B NL J SF
J A D GB S B I US E NL DK CH F SF
SF S J A GB DK US E D F I B NL CH
NL J B GB US D E A DK F I S SF CH
The global positioning of the Swiss Export Industry in High-Tech merchandise
7.2
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 com-petitive 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.
Ratio of the Swiss exports which have international competitiveness both in quality and price, 2005
38 %of the export productsare in markets with competition mainly in prices
62 %of the export productsare in markets with competition mainly in quality
93 %of these export productshave qualitative advantage i.e. High-Tech medical Apparatus’, Pharmaceutical ProductsMechanical Engineering
15%of these export products are price competitivei.e. Automotive Industry Paper & Pulp, Timber Products, Metalproducts
The global positioning of the Swiss industry with qualitative advantage cutting edge in the world market
7.3
64 65
Compared to OECD-Industrialized countries Switzerland has a relatively lower ra-tio of people with higher Tertiary education (University, ETH, Professional High School). On the other hand, Switzerland has higher ratio of work force with spe-cialized practical training (apprenticeship, Higher Professional School) and people who participate in further education during their professional life.
The percentage of people with Tertiary education from university taken between the ages 25 to 64, 2005
0
5
10
15
20
25
30
35
40
45
USA
Japa
nFi
nlan
dDe
nmar
kNo
rway
Belg
ium
Islan
dGr
eat B
ritai
nSw
eden
Switz
erla
ndNe
ther
land
sGe
rman
yFr
ance
EU25
Aust
ria
Italy
38 37
34 33 3230 29 29 28 28 27
25 2422
18
12
In Switzerland relatively lower percentage of the population have academic qualification
7.4
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).
The percentage of small and middle enterprises, which pursue and encourage innovation, 2002/2005
0
10
20
30
40
50
60
Switz
erla
nd
Islan
d
Aust
riaGe
rman
y
Belg
ium
Swed
en
Fran
ce
Norw
ay
Italy
Denm
ark
Finl
and
Grea
t Brit
ain
Neth
erla
nds
55
4645 43
38
35
29 29 2926
2422
18
Despite lower number of academi-cians still highest number of innovative enterprises
7.5
66 67
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 competi-tiveness 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.
Country comparison of workers motivation based on assessment by International managers in a survey conducted 2003 and 2009
10 = highest mark
0
1
2
3
4
5
6
7
8
9
Switz
erla
nd
Aust
ria
Denm
ark
Finl
and
Irela
ndNe
ther
land
s
USA
Japa
n
Swed
en
Germ
any
Italy
Fran
ce
7,77,9 7,8
8,7
7,67,3
7,07,2 7,2
6,5
7,16,8 6,8
5,9
7,0
6,56,9
6,1 6,1
6,7
4,6
5,34,9
4,5
■ 2003 ■ 2009
Willingness to work amongst em-ployees in countries with VET is highly rated
7.6
Switzerland is, according to balance of trade the winner of globalization. It ex-ports significantly more to the globalizing countries than it imports. The tradi-tional 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 de-liver expensive precision - they delivers cheap labour products.
Swiss goods imported and exported with newly industrialized coun-tries and countries in-transition emerging in the world economy, 2008
Chin
a
Hongk
ong
Turk
ey
Indi
a
Taiw
an
Sout
h Ko
rea
Bras
il
Russ
ia
0
1
2
3
4
5
Import 2008 Export 2008
8
7
6
0,8
2,5 2,4
0,7
1,6
0,7
2,0
1,0 1,0
3,2
2,4
1,1
5,0
1,4
5,96,1
Despite high wages globalization brings more export surplus – due to high quality
7.7
68 69
The Author Rudolf Strahm
Former Swiss National Councillor Ru-dolf Strahm was Price Regulator of Switzerland from 2004 to 2008. Prior to that he was National Councillor for 13 years. He studied chemical scienc-es and worked in the pharmaceutical industry for 5 years. He later studied management and economics at the University of Berne. He led several busi-ness associations and is now a lecturer and writer.
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.
Rudolf H. Strahm: Warum wir so reich sind. Wirtschaftsbuch Schweiz, hep Bildungsverlag Bern 2008.
Rudolf H. Strahm: Arbeit und Sozial-staat sind zu retten. Analysen und Grafiken zur schweizerischen Wirtschaft im Zeichen der Globalisierung. Werd Verlag Zürich 1997.
Fenner M./Hadorn R./Strahm R.H: Polit-szene 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
More Information
de.wikipedia.org/wiki/Rudolf_Strahmwww.rudolfstrahm.ch
70 71
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-the-job training of school finishers combined with trade-related theoretical education in trade schools leads to a highly qualified skilled workforce needed in industry.
Few months after founding JCF, the establishment of Rajendra & Ursula Joshi Ed-ucational 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 imple-ment the SDS in India under the initiated “Vishwakarma Apprenticeship Education Project”. This knowledge transfer also enjoys the support of the authorities, institu-tions and professional associations representing corporate members of industry, responsible for dual skill development in Switzerland.
Training Industry
Practical Skills on-the-job
training
Trade School
Trade-related Education
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.
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 in-dustries 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 FOUNDATIONAlbisriederstrasse 315, 8047 Zurich, Switzerland
RAJENDRA & URSULA JOSHI EDUCATIONAL SOCIETY510 Anchor Mall, Ajmer Road, Jaipur – 302 006, India
www.joshi-foundation.ch
72 73
bj instituteZollrain 12CH 5000 AarauSwitzerlandPhone: 0041 62 836 40 41
bj institutePlot No. 77, First FloorSyndicate Bank ColonyWest MarredpallySecundrabad 500 026A.P. IndiaPhone: 0091 40 40 13 13 02
Our background
Bruno Jehle, the founder of the insti-tute is an entrepreneur with more than 30 years experience in professional photography, electronic imaging, pre-press, print, internet service providing, application development, media asset management, and communications de-sign 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 so-cial & cultural projects. This foundation guarantees farseeing planning and its direction based on humanitarian prin-ciples.
Our objectives
bj institute promotes international ex-change of know-how of specialists in various fields. bj institute offers con-sulting and project management to its customers as well as high-quality train-ing in courses and workshops.
bj institute – Dual VET
bj institute is committed in enhancing India’s vocational education and training (VET) by introducing Dual VET combin-ing school with practical work in indus-try 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 im-plementing the Dual VET model in India with strategic partnerships in India and in Switzerland. To this end bj institute con-tinues to propagate the exclusive ben-efits of the model for all participants by means of campaigns and involving the focus groups.
Guiding principles
QualityThe bj institute is market-oriented. It promotes and practices Swiss quality standards.
Practical experienceThe bj institute co-operates with na-tional and international institutions and experienced professionals in order to offer practical experience together with theoretical excellence.
Transfer of skillsThe bj institute acts in collaboration with international partners to promote the transfer and application of expe-rience and research results into new products, techniques, and processes.
Social aspectsbj institute strives for social relevance by performing research into matters of national and international signifi-cance. It cultivates open dialogue with the general public and is a trustworthy partner.
Non-profitbj institute is not profit-oriented and independent of religion and political parties.
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 exper-tise in implementing and administering the Dual VET model to all those inter-ested in establishing the model in India. bj institute delivers customized training of the trainers by experts from Switzer-land and is of assistance in establishing curricula for Dual VET, in selecting capa-ble students, and in communicating with VET-friendly industry.
ProfileWorlddidac is the global trade association for companies providing products for education and training at all levels. We are the only globally operating organiza-tion 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
www.worlddidac.org