Sharing costs and responsibilities for lifelong learning
The Thematic Review seminar of the Mutual Learning Programme of the European Employment Strategy (EES), held in Brussels on 28th September 2005, was the third in a series of biannual seminars in the framework of the ŒMutual Learning Programme of the EES ‚. The theme of this Thematic Review seminar, „Sharing costs and responsibilities for lifelong learning‰ presents a very important and central topic in the European Union‚s efforts to boost growth and jobs as part of the relaunch of the Lisbon Strategy.
The seminar was hosted by the European Commission (DG Employment, Social Affairs and Equal Oppor-tunities-DG EMPL) and attended by government delegates, national and European stakeholders and soci-al partners from EU member states, Bulgaria, Norway, Romania, and Turkey.
The Thematic Review was opened by Antonis Kastrissianakis, Director of DG EMPL and Maria Cândida Soares, Chairperson of the Employment Committee Ad Hoc Group. Antonis Kastrissianakis emphasised the relevance of the theme of lifelong learning in particular in the context of the Lisbon Strategy. Boosting human capital and making lifelong learning a reality are key to confronting the two main challenges Euro-pe is facing: economic restructuring as a result of economic integration and new technologies on the one hand, and demographic ageing on the other. Lifelong learning is a productive and beneficial investment at all levels: individual, company, economic and social.
Maria Cândida Soares also underlined the central role of lifelong learning in the context of demographic ageing, globalisation and the transition to a knowledge economy. She drew attention to the fact that in spite of the importance of education and training, less than 10 per cent of 25-64 year olds participated in 2004 (Labour Force Survey, 2004). Those who would benefit most from continuous education are those who miss out most: the low-qualified. This has long-term implications for lifetime earnings and, as a result, for social cohesion and equal opportunities. Maria Cândida Soares welcomed the organisation of a The-matic Review seminar and further Peer Reviews on the subject, emphasising the crucial role of exchan-ging good practice in coming closer to finding new models of sharing costs and responsibilities for lifelong learning in the EU.
Experts Klaus Schömann (Jacobs Center for Lifelong Learning and Institutional Development, Germany) and Koos van Elk (EIM Business and Policy Research, the Netherlands) presented papers on market failure as a source of underinvestment in further training, and on policy instruments to foster lifelong lear-ning respectively.
Klaus Schömann‚s contribution concentrated on why market failure in the training market occurs and what can be done about it. He explained what is meant by market failure in the context of continuous education and how the imbalance of supply and demand leads to a lack of participation in further training. In an ideal labour market, workers will invest until their optimum, i.e. where the marginal increase in wages equals the marginal cost of training. The problem is that there is no direct link between training and returns on training (i.e. increase in wages) and workers therefore hesitate to take time out from the labour market to invest in training. Risk aversion and budgetary constraints (the capital market is also unwilling to provide loans for education) also explain why people are averse to participating in training. Firms are not so keen to invest in the training of individuals from a fear of their being „poached‰ by other firms, although this problem could in principle be circumvented through contractual arrangements. Further ways of tackling the barriers to participation in training are ensuring access to loans, promoting information availability, promoting transparency in training, certification and recognition of professional experience, targeting the groups least likely to participate and most likely to benefit (the low-qualified, older workers), reducing stigmatisation of the unemployed and older workers, and finding ways to co-finance education (drawing on the argument that it provides mutual benefits).
Koos van Elk‚s paper on policy instruments to foster lifelong learning was based on a study on lifelong learning financed by the European Commission in 2004. The study sought to identify the instruments and incentives required to promote human capital and to provide insights into the effect of government policies to stimulate entrepreneurs and employees to take up training in the EU-15. The study found that while all countries recognise the importance of a highly educated workforce that is constantly upgrading its skills and knowledge, they differ in the policy choices to stimulate this. Some member states concentrate on initial vocational education and apprenticeship systems while others focus on continuous training of the employed. In total 94 policy instruments were identified, of which 34 had been evaluated. Despite short-comings in these evaluations, the evidence showed that most instruments and incentives help to increase participation in training. A major issue for policy-makers is the deadweight effect. This ranges from 20% to more than 50% in those studies in which it was evaluated. Koos van Elk concluded with a presentation of the determinants of success. These included adequate information on the measure, orientation on target groups, flexibility, a limited administrative burden, substantial incentives (direct and indirect costs), accre-ditation and standardisation. He also gave a number of policy recommendations. These included carrying out serious policy evaluations, targeting workers and enterprises, paying attention to high deadweight, not focusing too much on fiscal and financial incentives, providing freedom of choice and transparency of the market, balancing administrative burdens and targeting, and putting policy instruments in a policy context.
The expert contributions were complemented by company examples from Deceuninck SA, Belgium and the Siemens Group. Deceuninck‚s human resources management programme „Deceuninck Career Gui-dance‰ is co-financed by the European Social Fund and the regional government of Flanders to cover the most vulnerable target groups. More than 75% of the Deceuninck workforce in Belgium is covered by the ESF, i.e. is older and/or low-qualified. Training is offered in five key areas: information technology, techni-cal skills, production processes, communication and management, and induction training. The structure of the training is innovative and seeks to avoid the classic classroom format. The importance of coaching and mentoring by colleagues is emphasised. Financial support from the ESF has provided an important contri-bution to the establishment and implementation of the training measures. Lifelong learning is a crucial part of the Siemens Belgium/Luxembourg corporate culture. It is particularly relevant in the current climate of rapid change, globalisation and more critical stakeholders and shareholders. Employees expect more in terms of career prospects (portfolio careers) and it is in the company‚s interests to encourage lifelong learning in order to remain on the cutting edge. Siemens regards its employees as the key to its success and invests accordingly. Training provision has changed since the 1990s, with more attention being paid to employee motivation as a key factor in improving performance. There is also a move away from traditi-onal teaching to new forms of learning (online learning, web-based training, virtual classrooms, Œon the job‚ learning, voluntary learning). Siemens encourages employees to participate in external training (MBA, project management courses) and also has a large apprenticeship programme with 8,000 apprentices.
In order to provide practical insight into the policy issues raised by Koos van Elk in particular, country examples from Ireland and Belgium were also presented. Ireland used to be characterised by high levels of unemployment especially amongst young people. Now it is experiencing impressive economic growth accompanied by low unemployment. In future, more of Ireland‚s growth must come from the increased productivity of its existing workforce, in particular in the services sector. The main policy thrust in the field of training is therefore training for the employed and up-skilling, the so-called „one-step-up‰ approach. Most expenditure on training is spent by companies. The remaining 10%, which comes from public expen-diture, can only function as a catalyst. In Ireland, public expenditure on training has four broad compo-nents: establishing a list of recognised training providers; helping companies with HRD planning to avoid unnecessary expenditure on ineffective training; providing selective financial support for skills priorities in the framework of the FÁS Competency Development Programme; and encouraging individuals through financial support. A training support system was also introduced to assist companies in up-skilling employees to improve company competitiveness. As the co-funding provided depends on the size of the company, SMEs benefit most from this measure.
The Belgian presentation focused on the system of training vouchers for employers and employees in Flanders. The policy objective of the voucher system is to increase the participation of adults in training (and to reach the EU benchmark of 12.5%). The training voucher system for employers was introduced in 2002 to stimulate training in SMEs. The basic principle is that companies can buy vouchers which are subsidised by the Flemish government (50/50). The measure was a clear quantitative success but had a high risk of deadweight loss. The voucher system for employees was introduced under the same principle in September 2003 and aims to encourage employees to maintain their knowledge levels and to strengthen their position on the labour market, i.e. to increase their employability. An initial evaluation showed that low-skilled and older employees were under-represented. Here also, there was a substantial risk of deadweight loss. Adjustments to the system (e.g. including free vouchers for the low-skilled) were introduced in 2004. First figures suggest a moderate success. The success of the programme could, ho-wever, prove its downfall in that it becomes too expensive!
Following the country presentations, there was a panel discussion involving the OECD, the European Trade Union Confederation (ETUC) and the European Association for the Education of Adults (EAEA). The panel discussed a wide range of issues, also taking questions from the floor. Some of the main points of the debate were:
Equal opportunities issues: lifelong learning as currently implemented, often tends to increase inequali-ty, since the higher skilled enjoy more training over a lifetime than the lower skilled who need it most. This has obvious implications for lifetime income and social cohesion.
Economic feasibility: the rates of return on lifelong learning are difficult to measure. Ways of raising the benefits for all stakeholders need to be looked at. New forms of funding for lifelong learning need to be developed.
Deadweight: Subsidies for lifelong learning have a bad reputation due to deadweight effects, but perhaps the question of deadweight is not always decisive, and the gains from training provision may be worth the deadweight losses.
Information and communication: there is often little communication between sectors on lifelong lear-ning issues. More synergies would be useful.
Social capital: we should also be talking about social capital and not only human capital, when looking at the rational for promoting lifelong learning.
- Accreditation of non-formal and informal learning. Systems of validation for work experience are being developed in a number of countries. These take into account that most (70%) learning is on the job, espe-cially in learning organisations where knowledge sharing is a priority.
Antonis Kastrissianakis gave a final statement highlighting the key issues of the seminar. He emphasised the need for interaction between the different European Employment Strategy objectives if they are to be achieved. DG Employment, Social Affairs and Equal Opportunities is setting the example by working to-gether closely with DG Education and Culture on this priority of the EES. Mr Kastrissianakis also high-lighted underinvestment in lifelong learning as a major obstacle which needs to be tackled by public authorities and policy makers. Resources are a key factor to the success of lifelong learning strategies. The Structural Funds will continue to play a major part in funding the Lisbon training objectives. He concluded by thanking all those who took part in the seminar for their contributions to the European debate.