Aspire to develop skills

It's better to develop skills-based, hands-on training than churn out more graduates who can't get good jobs, say two academics.
By Wilson Wong, Published The Straits Times, 5 Sep 2014

THE recent call for greater emphasis on vocational training and education has drawn considerable interest in paper-chase-driven Singapore. The Applied Study in Polytechnics and ITE Review (ASPIRE) committee has released a well-thought-out report on this matter.

Raising vocational skill levels and making education more applied are likely to benefit Singapore's overall economy more than by simply increasing the number of university places.

Merely raising the number of university places could result in negative externalities such as significant under-employment. For example, in Britain, where 40 per cent of each school cohort attends university, the labour market has been flooded with more graduates than it can absorb.

It is not uncommon for fresh graduates to spend extended periods waiting on tables while clinging on to fading hopes of finding the elusive dream job in keeping with their university education. Currently, an estimated 1.2 million youth (between the ages of 16 and 24) in Britain are in jobs for which they are overqualified.

The call for a culture shift in Singapore to one where people pursue education and skills that are relevant, and not chase a degree at all costs, is thus welcome.

But changing world views will take time. The much-vaunted success of the German apprenticeship model did not come about overnight and is, in fact, the culmination of a centuries-old tradition of master craftsmen imparting their skills to their apprentices.

About three-fifths of German school-leavers embark on these apprenticeships, which typically last for 31/2 years. Today, these skilled craftsmen form the core of Germany's renowned Mittelstand (with its 31/2 million SMEs) which accounts for about 50 per cent of Germany's US$3.6 trillion (S$4.5 trillion) GDP. The Mittelstand employs 60-70 per cent of the German workforce.

This model has to some extent buttressed Germany from the ravages of the global economic downturn, which has left the rest of the euro zone with staggeringly high unemployment of 11-12 per cent.

However, it is no easy task to replicate this model successfully.

Britain has tried to do this, from the 19th century, with little success. Britons remain wedded to the societal expectation that bright young people do not become apprentices to work with their hands, but go to Oxbridge or London for a degree and then find lucrative jobs in the "City" (London's financial district). More recently, the United States has also been trying to adopt this system in a bid to bridge the gap between the industry-relevant skills desired by employers and the training provided by universities and community colleges.

There are three things Singapore must get right to replicate the good practices of the German system.

- Identify desired skills

The German system sees a tight nexus between employers, industry associations and training providers. Often, the companies themselves are involved in designing the training.

Singapore, too, needs to strengthen links between industry and training institutions. This requires training planners to get out of the classroom and keep close tabs on rapidly changing industry trends that determine what skills employers need.

Take one example in manufacturing. Increasing global competition has led leading original equipment manufacturers (OEMs) to position themselves as "systems integrators", leading them to outsource lower-value work to their suppliers. For instance, in the aircraft-manufacturing industry, suppliers now account for more than 70 per cent of the value of any given plane. This outsourcing strategy enables OEMs to free up more resources for higher-value-added activities such as next-generation R&D and marketing.

Singapore, with its significant expertise in precision engineering, is well placed to capitalise on this outsourcing trend. The potential of Singapore's workers has been recognised by multinationals such as leading jet-engine maker Rolls-Royce. Since February 2012, Singapore has hosted RollsRoyce's first training centre in Asia, at Seletar. Since its inception, the centre has trained more than 10 intakes of technicians.

But this is just one sector, and Rolls-Royce is just one employer among many in manufacturing.

Replicating the German model of vocational skills training means many more partnerships being forged by industry groups and training stakeholders.

- Higher pay

The second thing Singapore must do to replicate the German success in vocational training is to give tangible recognition to the efforts and contributions of skilled technicians via higher salaries.

Currently, the starting salaries of degree holders can exceed those of diploma holders by approximately 50 per cent. This gap tends to widen as their careers progress. In Germany, it is not uncommon for highly skilled and experienced technicians to draw annual salaries as high as €70,000 (S$115,000), figures that their Singapore counterparts will find hard to reach. Good salaries should not be the sole arbiter in deciding one's career, but they would help to draw more local school leavers to apprenticeship schemes. In Singapore, the low salaries associated with technical jobs have a lot to do with the entrenched mindset of the "scholar" being at the top of the pecking order, while those who "work with their hands" are placed further down. This cultural hurdle to promoting the vocational path to career success is not to be underestimated.

- Advancing to a degree

The third thing Singapore must get right is to emphasise unequivocally to key stakeholders (such as parents and students) that the pursuit of an apprenticeship programme does not mean that a person has to give up his or her chance of securing a university education later.

In Germany, Mittelstand companies send their master craftsmen for further training to universities that emphasise applied learning and the development of job-relevant skills. A similar approach could be incorporated into Singapore's apprenticeship programmes.

Local universities that advocate applied learning (such as the the Singapore Institute of Technology and SIM University) are already making their presence felt in our education sector. Graduates from Singapore's apprenticeship programmes, with support from employers, could upgrade their skills at these institutions.

Once key stakeholders see the recognition and upward mobility available in apprenticeship schemes, their chances of achieving acceptance and long-term success would be greatly enhanced.

Dr Wilson Wong, a senior lecturer at SIM University, has worked as an analyst and consultant in the global automotive and financial services industries.

Growing concerns over graduate employment
By Randolph Tan, Published The Straits Times, 5 Sep 2014

THE report by the Applied Study in Polytechnics and ITE Review (ASPIRE) committee has sparked much debate. Some have lamented the apparent reduction in emphasis on the need for a degree. But the committee's main objective was to strengthen vocational and skills training, not decry academic training.

In an ideal world, skills of graduates will perfectly match those required by employers. But some emerging employment trends of graduates are of concern.

For a few years now, there have been increasing signs that the academic training of university graduates has not rendered them immune to the problems facing other workers in the job market. As more from each cohort go to university, it is incumbent upon policymakers to confront the problem at an early stage.

In Singapore, the number of unemployed residents with degrees is now higher than for groups of any other educational level. For last year, the reported figures show 18,600 degree holders unemployed, making up close to a third of the overall 59,800. The numerical gap has been widening, with the figure overtaking those of the groups with secondary and below-secondary qualifications in 2010 and 2011 respectively.

One reason for the increase in numbers is that there are more degree holders, and they make up an increasing share of the workforce. But even after accounting for that, degree holders still have a cause for concern. Their unemployment rate used to be the lowest before 2012, but has since overtaken those of groups of other qualification levels. Last year, it was 2.8 per cent, compared with 2.7 per cent for the group with diploma and professional qualifications and 2.4 per cent for the below-secondary group.

To worsen matters, the long- term unemployed number and corresponding unemployment rate of resident degree holders display the same worsening trends. Last year, there were 5,100 degree holders among the long-term unemployed, translating to a rate of 0.8 per cent.

The group with the second- largest number - diploma and professional qualifications - was way behind at 2,500, with a rate of 0.6 per cent. The post-secondary group had the second-highest long-term unemployment rate, at 0.7 per cent.

The evidence on unemployment rates tells only part of the story. The other part comes from the fact that the increase in the number of economically inactive residents possessing a degree exceeded the rate at which degree holders increased in the population over the last decade.

In other words, the ranks of non-working graduates are growing faster than the rate at which new graduates are being minted. This suggests that some degrees are not being converted into employment.

But, fortunately, Singapore does not have high youth unemployment. Last year, the unemployment rate for residents aged below 30 was 5.2 per cent, which is not high by developed countries' standards, where double- digit rates are common.

The age profile of unemployed graduates is also interesting: Among graduates aged below 30, 7.9 per cent are unemployed. The figure falls to 1.9 per cent for those in their 30s, but rises to 2.5 per cent for those in their 40s and further to 3.1 per cent when they hit their 50s. This suggests that for some degree holders at least, the return on investment in a varsity education may fall after the first decade, or that graduates are finding it difficult to keep up with the demands of the labour market when they hit their 40s and 50s. This suggests a need to boost in-employment training, not just pre-employment training.

While the overall number of economically inactive residents rose a mere 8 per cent, the number of economically inactive degree holders surged 124 per cent over the last decade to last year.

Since economically inactive people are those who chose not to work - including housewives - there is a paradox here in that degree holders should not only be more employable, but they would presumably also avoid not working because of the higher opportunity cost involved. Yet the numbers show disproportionately more of them being economically inactive. This raises the question why more people are earning degrees, if the frequency of not converting them to employment has risen.

Hence, rather than ramp up university places, it makes sense to develop more pathways to allow students to deepen skills relevant to employers. In this respect, the ASPIRE committee's recommendation for a place-and-train scheme is a good one. This allows students graduating from polytechnics and the Institute of Technical Education to be attached to firms that pay them and send them on work-study stints.

The writer is deputy director, Centre for Applied Research, SIM University.

Related
ASPIRE committee report
Applied Study in Polytechnics and ITE Review (ASPIRE) Report
No degree, no problem