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

www.bjinstitute.orginfo@bjinstitute.org

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