NN40, May 2008
Education for Sustainable Development? Or The Sustainability of Education Investment? A Special Issue
Skills Formation for Economic Development in India: Fostering Institutional Linkages between Vocational Education and Industry
By Okada, Aya, Nagoya University
Email: aokada@gsid.nagoya-u.ac.jpKeywords
TVET, apprenticeship, India, enterprise-based training
As national economies are integrated into the global economy, which is increasingly becoming ?knowledge-based? (OECD, 1997), and as technological change occurs at unprecedented speeds, it becomes increasingly important for developing countries to develop institutional mechanisms that can foster skills formation at both national and firm levels, to become globally competitive and to promote sustainable economic development. As the knowledge and skills required for today?s production activities are becoming more and more tacit, hard to obtain, and costly to transfer between firms, and thus more specific, and often even firm-specific (Najmabadi & Lall, 1995), firms are taking on an increasingly important role. Indeed, they have become de facto institutions for skills development that will improve productivity and competitiveness (Okada, 2004). These changes pose enormous challenges to institutions of technical and vocational education and training (TVET) in developing countries, in terms of their design, planning, and management, as they affect the adequate supply and deployment of skills needed in the workplace as well as the productivity of the workforce, and thus the growth of economies. Conventional pre-employment school-based TVET may become less relevant and less important, given its difficulty in keeping up with fast-changing skills in demand, caused by: 1) the changing nature of skills, 2) changing production processes, and 3) changing labor markets. Thus, there is a growing recognition about the need to develop an alternative model of TVET in which the private sector is more deeply involved (Middleton et al., 1993; OECD, 1994; ADB, 2004). Training, whether conducted on-the-job or off-the-job, is an institutionalized form of knowledge and skill transfer. Particularly in the work context, training is a means of acquiring and enhancing firm-level learning: lessons the organization has learned are translated into learning by members of the organization, and knowledge acquired by the firm is shared among them in different parts of the organization. That is, in-firm training promotes the intra-firm transfer of knowledge and skills. Despite the current trend in which production processes converge across different countries, considerable diversity still remains in the various national systems of skills formation, even in the face of globalization (Ashton & Green, 1996).
This study examines the nature of institutional linkages between vocational education and industry in the Indian skills formation system. The Indian case is of particular interest for two reasons. First, India has faced an acute need to upskill its workforce, as India?s economic reforms since the mid-1980s, and more notably in the 1990s, have led to dynamic restructuring, a growing exposure to global competition, and an increased inflow of foreign capital. Second, although the Indian TVET has been widely considered to be unsatisfactory, interestingly, it has had a formal apprenticeship training scheme institutionalized by the government in the 1960s, when India was still at a very early stage of its economic development. This tripartite institutional arrangement involving the government, industry, and TVET institutions, has worked well during India?s rapid economic restructuring in more recent years, as it has provided incentives to both firms and workers. The study focuses on the linkages that TVET institutions, such as Industrial Training Institutes (ITI), have forged with firms to accelerate the upgrading of workers? skills. In particular, making special reference to the Indian automobile industry, I examine the changing patterns of interactions between the ITI and the firms, as the industry grew very rapidly in the 1990s; I then consider how such interactions have helped the industry upgrade workers? skills. The automobile industry is one of the Indian industries that has gone through the most rapid transformations in recent years. The existing literature on TVET, particularly in the Asian context, has mainly focused on school-based education and training institutions; as few studies have looked at enterprise-based TVET, we lack sufficient insights into how workers are actually trained inside the firm, and what incentive systems would motivate governments, firms and training institutions to develop the kind of tripartite partnership that will forge the formation of skills that the country and the industries require. This study thus fills this gap by drawing on a detailed firm-level observation of the Indian apprenticeship training scheme.
This micro-level study is based on three rounds of fieldwork that I carried out in India between 1996 and 2004. In this paper I argue that while India?s vocational education system has been considered largely unsatisfactory, the institutional linkages that vocational education institutions have forged with firms through state-mandated apprenticeship schemes, have actually played an important role in developing and diffusing the skills that industry requires, thus allowing industry to achieve rapid transformations.
References
Ashton, David, and Francis Green, (1996), Education, Training, and the Global Economy, Cheltenham, U.K.: Edward Elgar.
Asian Development Bank (ADB), (2004), Improving Technical Education and Vocational Training: Strategies for Asia. Manila: Asian Development Bank.
Middleton, John, Adrian Ziderman, and Arvil Van Adams. 1993. Skills for Productivity: Vocational Education and Training in Developing Countries. New York: Oxford University Press (for the World Bank).
Najmabadi, Farrokh and Sanjaya Lall, (1995), Developing Industrial Technology: Lessons for Policy and Practice. A World Bank Operations Evaluation Study. Washington, D.C.: World Bank.
OECD, (1994), Apprenticeship: Which Way Forward? Paris: OECD.
OECD, (1997), Industrial Competitiveness in the Knowledge-based Economy: The New Role of the Government. Paris: OECD.
Okada, Aya, (2004), ?Skills Development and Interfirm Learning Linkages under Globalization: Lessons from the Indian Automobile Industry,? World Development. 32 (7), 1265-1288.
Okada, Aya. (2006). ?Skills Formation for Economic Development in India: Fostering Institutional Linkages between Vocational Education and Industry,? Manpower Journal, 41(4). 71-95.
Back to full contents of NORRAG NEWS 40.
Download the full issue of NORRAG NEWS 40 in pdf.