Annex IV: Education and Training: A Joint Statement by BIAC and TUAC

January 1991

• Introduction
• Challenges facing the OECD countries
• The necessary response
• Improving basic education
• Modernizing basic training
• Retraining throughout working life
• Making it happen

Introduction

The two sides of industry meet and cooperate in many situations in everyday working life: improving production, settling disputes, drawing up agreements, planning. Organizations of the social partners also often cooperate although national practices vary considerably.

At the international level, the advisory committees of Business and Industry and Trade Union organizations, respectively, take part in the deliberations of the OECD. These committees - the BIAC and the TUAC - in 1986 prepared a joint statement which was presented to the OECD Ministerial Council on how we perceive the interdependence existing between economic growth and development and full employment and social dignity.¹ In 1988, BIAC and TUAC presented a joint statement to the OECD Intergovernmental Conference on Education and the Economy.²

It has now become "conventional wisdom" that educational and training investment in "human resources" is a key to economic success. However, our experience in the world of work convinces us that much is still left to be desired in the performance of education and training systems, in the level and scope of investment in the skills and quality of the adult labour force, in the levels of functional competence reached and maintained -and thus in the prerequisites to sustained economic growth through the critical decade of the 1990s.

It is in the common interest of both BIAC ³ and TUAC to again present a Joint Statement addressed to the OECD governments, this time focussing on the vital importance of education and training. A "total quality" approach is essential for education and vocational training. We can no longer accept complacency with systems which produce large numbers of drop outs. 80-85 per cent of the labour force in the year 2000 is already at work and we must achieve the continuous development of adults' skills and competence throughout each individual's life.

Challenges facing the OECD countries

The OECD member States must sustain their economies as they move towards, and into, the next millennium in the face of the following challenges:

• Demographic development will reduce the normal replenishment of the adult labour force at around 2.5 per cent annually to alarmingly low levels - 1.5-1.9 per cent annually - throughout the 1990s in almost all member countries.
• Despite the fall in general levels of unemployment in the OECD since 1988, the continuation of unacceptably high unemployment in many regions and amongst many groups risks excluding them.
• Structural change and technological development has an accelerating impact on products as well as on production and how it is organized, marketed and distributed. (In addition, more jobs are now being created in services and information than in production.) These changes confront our societies with several far-reaching challenges. We must prepare our young people for a profoundly better understanding of, and insight into, the emerging and new technologies - and motivate them to master these in all aspects of our lives so as to ensure that technological change contributes its maximum to economic development and does not counteract social progress. At the same time we must be aware of the environmental challenges associated with this process. We must develop new competence in the present adult labour force on an unprecedentedly massive scale. Businesses must respond flexibly to changes. And we must increase the continuous development and reform of our industrial production and its work organization. This challenge, if successfully managed, should lead to both economic and social gain.
• The already manifested increase in competition on the world market - following from the rapid increase in world trade, accelerating technological development becoming increasingly accessible to all, and changing political and economic parameters - will in all probability increase even further through the 1990s. Another kind of competitive challenge altogether is that following from the enormous needs of the emerging new market economies and democracies of Eastern Europe to receive assistance through the difficult and unstable transition period that may well stretch through the whole decade of the 90s.

The necessary response

These challenges require a threefold response in order to ensure that the OECD countries' human resources meet the challenge:

1. Investment in education and training: those countries and firms who will succeed best in the international competitive environment will be those who treat education and training of the young generation and the development of the skills of adults already in the labour force as an investment and not as a cost. However, it should be said that investment in education and training is a necessary condition for success, not a panacea which can put right other economic or social policy failures. Moreover, basic education must provide young people with the competence and understanding necessary for their individual enhancement, their social integration and responsibility as well as their employability by employers. The basis for this is that young people must be given the means to successfully cope with a rapidly changing labour market and society. Continuing curricula reform and equal opportunities for both sexes are essential. The education system can be a cement of social cohesion through OECD countries which itself is a key factor in economic development.
   Enterprises depend heavily on the performance of the education system. This is particularly the case for the smaller companies which have relatively smaller chances to train and retrain their staffs themselves, and generally can afford less investment in raising the competence of their workforce. This last fact is mainly due to the time-scale involved before such investments pay off. In order to make these smaller enterprises more competitive and to increase the opportunities available to their staffs, incentives schemes and other "outside" support arrangements attractive to both sides should be investigated and discussed.
2. The performance of public youth education and training systems: progress has taken place over the last ten years. However, it is unacceptable to the social partners that a best possible level of educational attainment is not achieved. Most systems succeed to raise at best less than 80 per cent of each cohort to the desired standards (with the exception of Japan). Although measured standards may be misleading, this deprives both large groups of our young and the economy of the necessary prerequisites for active participation of all in the development of our societies. Our joint strategy calls for a "total quality" basic education for all young for which our governments must be responsible and their respective school systems must be accountable. Governments must provide the necessary financial resources (when efficiently deployed) to allow "total quality" in education. The OECD has an important role to play in helping to extend good practice in this field.
3. The need for educating and retraining the adult labour force: more than 80 per cent of the workforce of the year 2000 is already at work and this adult workforce will thus comprise an increasing part of the labour force available to us into the next century. In many OECD countries a large part of this workforce left school with only the minimum school qualifications and the large majority do not receive systematic adult education or retraining. These circumstances are compounding the other problems which we are facing. This situation can no longer be tolerated and must be put right over the 1990's. Continuing education and retraining must be made accessible and attractive to adults. OECD governments must take the prime responsibility in reversing this situation and employers and trade unions are themselves committed to assisting them in meeting this objective.

Improving basic education

In the face of organizational and structural change, the nature of work is changing at an accelerating pace. Mass production and Taylorist systems of production are giving way in some industries to new forms of work organization. If new technologies are to be exploited to the full, both economically and socially, this process of change in work organization will increase and spread. At the same time, structural changes mean that individual workers are faced by fundamental changes during their working lives. This change in the world of work produces changes in the requirements on our educational systems. The increasing need for ability to handle information, numeracy, group work, the ability to communicate, literacy, inter-personal skills and customer-related skills will all require educational systems and curricula which reflect the need for young people to learn and not just absorb knowledge and to be able to adapt to and profit from future changes. The basic education system has increasingly to provide for the capacity to engage and re-engage in the learning process itself. This will put increased pressure on the school systems to adapt and to be seen as being more at the cutting edge of change. Indicators of inadequate system performance such as increasing functional illiteracy and persistently high drop-out rates suggest that in many OECD countries the position has become very serious. More optimal use of resources and in some cases extra public resources are necessary, but at the same time there must be active cooperation between schools and the world of work and public authorities - both to ensure that adaptation of systems take place and to make better use of the capacity and interest of enterprises to assist schools to create motivation and generate learning opportunities. Schools are not factories and learning environments have to be built up, not imposed. Alongside education for employment schools also have to ensure education for individual enhancement and social responsibility.

Future societies and economies will not be able to function if high quality education is focussed on a small group. This is why a "total quality" approach to education is necessary. We have as our ambition the elimination of the drop-out phenomena as well as the overall raising of standards.

In achieving all these improvements the quality and morale of the teaching profession is the key. We endorse the conclusions of the report of the OECD's Working Party on the Conditions of Teaching - "The Teacher Today" - that in many cases the conditions and rewards of the teaching profession must be improved as an urgent priority and that opportunities for regular retraining of teachers is necessary in order to improve the quality of teaching.

Changes must also take place in systems of higher education. We must give an increased opportunity for the higher education of young people as well as increased flexibility in making these institutions available for supporting the continuous development of adults active in all avenues of working life. Higher education institutions should be encouraged to consider the potential for adult vocational training in their traditionally "academic" curricula in order to increase their accessibility to adults.

Modernizing basic training

Many OECD member States need to improve their systems of vocational education so that young people leaving the compulsory school system have an opportunity for a higher education place or training opportunity which leads to a certifiable qualification. There is no one model for the desirable balance or the type of system which should be preferable. But close cooperation between the three partners - government authorities, employers and trade unions - is essential. Information on successful examples - whether industry or community based - should be used more actively.

In some cases there are imbalances between the "education" and the "training" establishments which need to be redressed. In other countries, initial vocational training and apprenticeship systems have broken down to a worrying degree. In all countries, however, there are problems of insufficient levels of basic training, mismatches between the skills produced and those required, and growing gaps in opportunity. Although the exact delivery of vocational training systems may vary, public authorities have a responsibility for ensuring the study and operation of the system and each young person must have a right to such training. Public authorities, in close cooperation with the social partners, must also ensure that vocational training leads to a set of certifiable skills and qualifications.

Retraining throughout working life

There must, however, be a sustained effort at retraining the adult labour force and to a large extent this must be enterprise-based. At the moment, this is often insufficient both due to the changing environment of the 1990s and due to the long standing tendency for individual firms to under-invest in training for fear that skilled workers will be "poached" by other employers. This also leads to the tendency to focus on narrow job based training rather than focusing on wider transferable skills of use to different employers. The ultimate response must be to upgrade the level of competence of the adult.

Especially, the smaller enterprises are hard put to invest sufficiently in training, and to provide comprehensive enough training schemes, for obvious reasons. These companies need more outside assistance, both from their own organizations, from schools and universities, and from governments and banks, to overcome these difficulties and limitations.

In most member countries, the rapid expansion of education and training in the last decades has inadvertently resulted in increasing inequalities as regards the distribution of education between generations, most younger workers having received almost twice as much schooling as their older colleagues. This is further compounded when production priorities act to allocate more continuing training and retraining resources to those workers that are already best educated. Also, various jobs require different amounts of upgrading. However, to compensate for such circumstances cannot be regarded as being solely a responsibility for employers -rather, there must be a tripartite response.

There are community-wide interests in this process and therefore government must take a responsibility in both the orientation of the content and the funding. The responsibility for financing must depend upon the respective goals of the training, its immediate employment objectives, its wide social needs and its individual enhancement. The field of enterprise-based training and retraining does, however, represent a perfect field for a "win-win" strategy of cooperation between the social partners and government, taking account of national circumstances, in which all parties gain and conflicts can be reconciled.

Enterprise-based training is therefore having to:

• take on responsibilities for remedial education;
• provide sufficiently wide skills that the workforce is adaptable and polyvalent;
• whenever possible provide an opportunity for individual development, as well as training becoming a standard part of working conditions for all workers.

These demands on what enterprise-based training must achieve lead to the need for a three-dimensional model that explains both how to increase the personal competence, the social competence and the professional competence - and how to distribute and balance responsibility for these partly converging, partly divergent ambitions. Also, it calls for new and more versatile methods of cooperation between all "players", such as incentives and various fiscal/financial options made available under specified conditions.

In some countries, collective agreements have also been concluded establishing good practice for enterprise-based training. In some instances paid training leave has become an established practice. Training leave may become increasingly important in the future. It should be combined with mechanisms that constructively govern its deployment to times and purposes that are beneficial also to others of the "players". Systems of personal "accounts" for training (or drawing rights) combined with incentives should be examined.

In almost all countries, however, serious gaps exist in training provision by small and medium size enterprises. Other areas requiring specific government programmes are those of particular underprivileged groups who may require targeted programmes, such as those trapped in unskilled poor quality jobs or the long term unemployed. A further area are those industries or sectors facing massive restructuring, where anticipatory retraining programmes can help ease adaptation and change.

Making it happen

BIAC and TUAC are ready to engage in a joint effort with OECD to encourage governments to increase general awareness in all circles concerned of the critical importance of the quality of the labour force to economic growth and performance. We hope to increase the opportunities to individual workers, both through incentives and new responsibilities to further their skill development. The goals are:

• improving the general school system through a "total quality approach" to basic education;
• the development of a high quality vocational education system leading to certifiable qualifications with the greatest possible access for all;
• increased opportunity for young people to go forward to further and higher education;
• the development of enterprise-based training;
• the promotion of retraining for workers throughout their working life.

Our objective is to increase the options available to individuals throughout their lives as well as meeting the economic and social challenges facing us. Opportunity must be given for skill development, incentives must exist to make this worthwhile to the individual and therefore changes also have implications for collective bargaining and pay systems.

A new "win-win" strategy of cooperation must be developed between all parties concerned both in youth education and training and in the development of the potential of the adult labour force - governments, social partners and above all individuals involved.

It is recognized that there are absolute limits to both financial resources and time. In the same manner that the goals of training and retraining have objectives for the employer, society as a whole and the individual, so financing responsibilities must reflect the different objectives -individual, corporate and collective. Similarly opportunities for using working time for retraining, the provision of training leave and the general reduction of working time are elements which have to be balanced.

Ultimately, however both financing and use of time for training must be treated as an investment. Action by government at the right time can ensure that the investment is brought forward. Indeed for many individuals and small companies action by the government is the key to enabling them to participate in this process in any way at all, since their immediate perspectives and potential seldom allows them to have longer term or more comprehensive ambitions.

The profile of training needs to be raised both at the level of the board-room and within workplaces. In many cases it has been included on the collective bargaining agenda, and at the same time is an appropriate subject for consultation and cooperation arrangements. The ultimate goal is to increase individual opportunities, avoid exclusion and match both economic and social needs.

The suggestions and reflections brought forward in this Statement call for education and training to be at the center of OECD's and its member governments priorities. BIAC and TUAC will work to this end and also seek to ensure the close interaction of Education and Training Policies with other priorities such as Economic, Manpower and Social Affairs and other policies. We are quite prepared to continue and if necessary increase our cooperation with OECD, its Secretariat and the CERI, in present and future forms.

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[ Index | Introduction | Chapter 1 | Chapter 2 | Chapter 3 |
Chapter 4 | Chapter 5 | Concluding remarks | Annex 2 | Annex 3 ]