Germany’s dual vocational-training system: Possibilities for and limitations to transferability

Heyday of the dual system

About 1.2 billion people in the world are between 15 and 24 years of age. In other words, youth make up 17% of the world’s population. Almost 75 million of these young individuals worldwide are currently seeking a job. The global youth-unemployment rate in 2011 was 12.7%, a full percentage point above that of 2007. This figure is expected to increase to 12.8% by 2018. Indeed, on the global level, young people are nearly three times more likely to be unemployed than are adults. Overall, 40% of the world’s unemployed are young people (ILO, 2012a, 2012b, 2013a, 2013b).

Germany’s vocational education and training (VET) system, the so-called dual system of vocational education, has drawn increasing attention in recent years. The dual system is credited with keeping youth unemployment at low levels compared to European and international averages and is viewed as producing highly skilled workers who contribute to the innovative capacity of the German manufacturing sector. The European Union and many of its individual member states have publicly acknowledged the benefits of Germany’s dual system, reflecting a level of interest in the model that is today greater than ever. In its “Rethinking Education” strategy paper, the European Commission makes the following compelling statement: “Work-based learning, such as dual approaches, should be a central pillar of vocational education and training systems across Europe, with the aim of reducing youth unemployment” (European Commission, 2012: 7). The European Alliance for Apprenticeships, a Commission-initiated project, was formed to work toward the same end. According to the Commission, the Alliance will help fight youth unemployment by improving the quality and supply of apprenticeships across the European Union, in large part by creating a robust partnership between key employers and education-sector stakeholders.

Given this state of affairs, it is understandable why interest in Germany’s vocational-education system has risen so dramatically in recent years. The institutions, ministries, and experts responsible for this area in Germany, Austria, and Switzerland have been swamped with questions from foreign delegations, while conferences on the issue of transferring the dual system have been held on all continents, and their publications widely disseminated. But what are the distinguishing features of the dual system? And how does it differ from other systems?

Vocational education: The three basic approaches

Various countries have developed a wide range of approaches designed to help young people make the transition from school to work. In the area of vocational education, three different models dominate. First is the market-based or liberal model, predominantly used in the Anglo-Saxon regions, in which the development of vocational skills is market driven and is not broadly standardized. Under this system, the supply of and demand for training is regulated by the market. Second, there is the school-based or bureaucratic, state-regulated model; within Europe, France is the most typical example of this kind. In this case, vocational training is regulated and financed by the state, and the types of vocational skills provided are not strictly a function of labor-market demand. Third, there is the dual-corporatist model (applied mainly in German-speaking countries), which combines the market-based and school-based regulatory patterns. In this third model, schools and companies each serve as learning locations; the practical part of a learner’s education takes place through company-based training, while vocational schools provide the theoretical component. The characteristic feature of this system is that the provision of knowledge and skills is closely linked to the acquisition of necessary job experience. For this reason, training takes place under conditions similar to those the trainee will encounter in the workplace (Greinert, 2004).

The German dual system: How does it work?

Vocational education in Germany is part of the national education system. Students can commence training after their ninth year of school, at the earliest. Coursework lasts from two to 3.5 years. The legal basis of the German VET system is the VET Act (BBiG), originally passed in 1969 and subsequently revised. About 50% of students in upper general education opt for such vocational training. The two major pillars of the dual system are the workplace within a company and part-time vocational school. Learning at both venues is governed by distinct but coordinated regulations. The company provides practical training while the vocational school supplements this on-the-job learning with theoretical instruction.

Training areas include about 350 different occupations in the technical, agricultural, commercial, and industrial sectors, including public administration, health care, and the social services. As a rule, trainees spend 8–12 hours per week at school; the remaining time is spent at the actual worksite. To become an apprentice in the dual system, a young person has to apply to a company for an apprenticeship and sign a training contract. The right to attend related classes at a part-time vocational school is granted automatically. The vocational course ends with an assessment overseen by an appropriate authority such as the Chamber of Trades and Handicrafts, the Chamber of Industry, the Chamber of Commerce, the Bar Association, or the Schools of Administration. For this final student examination, each relevant chamber establishes a board of examiners consisting of employer representatives, employees, and at least one vocational-school teacher.

Generally speaking, the German dual system is based on co-determination between employers’ associations and trade unions with regard to regulation, curriculum design, certification, and funding. This joint responsibility is further reinforced by the fact that the VET system is implemented by the Federal Institute for Vocational Education and Training (BIBB) in such a way as to ensure continuous dialog and consensus between the stakeholders. The employers’ associations and trade unions, the primary partners in the BIBB’s policy governance, exert considerable influence on the content and form of VET, ensuring that their requirements and interests are taken into account. The federal government recognizes training-eligible occupations through statute and issues training regulations. The states (Länder) are primarily responsible for curricula within the part-time vocational schools, as well as for funding of the teaching staff. Employers and unions draft proposals for occupational training programs and negotiate provisions governing apprenticeships through collective agreements. The chambers supervise workplace training and instructor training, and administer examinations (BMBF, 2011).

Beyond this functional perspective, it must be noted that Germany’s dual system exhibits a number of weaknesses. In broad terms, it does offer very good labor-market opportunities to those who complete their training; however, a large number of youth continue to be denied access to this system. Thus, despite the demographic shift, around a quarter-million young people are in so-called transitional measures, which are intended to improve their opportunities within the vocational-training market but often resemble perpetual waiting rooms. Many never succeed in making the transition to a full vocational-training program. In fact, every year, 150,000 youth leave the educational system without a professional qualification. And precisely because such great importance is placed on education in Germany, the risk of becoming unemployed without vocational training is considerably higher – indeed, three times higher – than is the case with a qualification. Unsurprisingly, demands have grown increasingly loud in recent years for Germany to provide guaranteed vocational training, closing the gaps in company-provided vocational training through the provision of state-supported training positions. The problem with the market-oriented dual system is that it derives from the divergent structural logics at play: The (company) offer of vocational-training positions follows an economic calculus, whereas the demand for training (on the part of young people) is predicated on demographic developments and individual decisions. Achieving balance between supply and demand is therefore often a matter of happenstance.

A closer look at Germany’s dual system shows that it involves much more than the integration of school- and workplace-based training. It is a complex and historically conditioned institutional structure with a large number of differing actors, responsibilities, interests, and logics guiding action. In addition, it owes its success in part to the relatively high value that German society places on workplace-based job training, as well as the willingness of companies to support vocational training, a necessary condition for the system’s functioning. An exact replication in the sense of a 1:1 transfer to another country is thus unrealistic.

Elements of the German dual system

University of St. Gallen Professor Dieter Euler, working on behalf of the Bertelsmann Stiftung, has produced a systematic analysis of opportunities for transferring the dual system to other countries. Under his approach, the dual system is broken down into 11 distinct elements, each of which is described and examined with regard to its transferability. In this analysis, Euler also discusses how each specific element might be replaced if a direct transfer is not possible (Euler, 2013).

As an example, one core element of the dual system is the dual principle – the integration of theory and practice – under which the workplace takes a critical role as a learning center, thereby allowing for a realistic training process to take place. However, very different models for implementing the dual principle in practice are also conceivable. Theory and practice can continuously alternate, as in the German model, but they could also follow one another in phases of longer individual length.

Another recent study offers empirical evidence of the benefits of workplace-based learning in general. According to the study, work experience, whether acquired informally or as part of a formal course of study, increases the likelihood that an individual will find posteducation employment. Although the share of young people who are combining work with study is declining in some countries, the study found that people who did pursue this combination, either as a formal part of their education or in addition to it, faced a much lower risk of posteducation unemployment, at least within the countries surveyed. In Germany’s case, the dual apprenticeship system appeared to be a key factor in explaining that country’s relatively low rate of youth unemployment (Thompson, 2013).

What, then, are the overall implications for transferring the dual system to other countries? A national VET system seems best regarded as raw material for innovation rather than as a blueprint for reforms or a finished export product. Any country wishing to import a foreign system of vocational training must take existing framework conditions into consideration and implement the dual vocational training in line with the country’s own educational, social, and economic objectives. There is no “best” system; each system can be judged only by its success in achieving its specified aims. Additionally, a national VET system is influenced by other social subsystems, and exporting it – or even individual features of it – is possible only if conditions in the importing countries are comparable.

Obstacles to transfer: Image and company involvement

Some of the framework conditions necessary for a dual vocational-training system can be regulated by the state, such as training-curriculum design or rules governing examination procedures. Others, by contrast, lie largely outside state influence. This is true, for example, of the issue of vocational education’s social acceptance. A vocational-education system can only function if youth, their parents, and companies regard this as a wholly adequate alternative to an academic education. The extent to which a society values vocational training can be a key factor in efforts to reform such a system. In many countries, vocational training suffers from a poor image. For parents and youth in these regions, a traditional school-based or academic education is valued more highly than is on-the-job training.

Changing such views, which often take the form of deeply rooted prejudice, requires considerable perseverance. According to recent findings, programs aimed at raising vocational training’s acceptance within society can be successful when they are able to show results that justify confidence in the VET system. By contrast, raising career expectations that cannot be fulfilled will have a counterproductive effect. Therefore, every activity aiming to raise social acceptance should be cautiously performed and be preceded by an in-depth analysis of the country’s specific conditions and employment prospects (GIZ, 2013).

One major hurdle in the implementation of dual vocational-training systems is companies’ (lack of) willingness to provide training positions in their organizations. If workplace-based job training has no tradition in a given country, it is difficult to communicate to companies why they should now range themselves behind the idea. In particular, the fact that firms must pay their apprentices a monthly wage during the training process often meets with strong resistance.

In this regard, it is helpful to offer information and explanatory material that makes an economic argument. Vocational training is hardly a charitable activity, even if appeals or commendations are sometimes directed to companies’ responsibility for the young generation. Vocational education must be economically beneficial; otherwise a company will not offer it in the long run. A direct link between vocational training and economic profitability arises in considering the value-added contribution a trainee makes during the training process: The more deeply a trainee can be integrated into the company’s value-creation process, the more substantial is the gain that he or she brings to the firm. This integration tends to be stronger in the trades than in high-tech industrial areas, in which training often takes places in teaching workshops where the company’s value-creating processes are only simulated. The earlier the value-added contribution can be achieved during the training, the less firms have to fear financial disadvantages because of losing qualified staff after training to other firms who poach them without offering their own training.

In Switzerland, empirical studies on the costs and benefits of workplace-based education have been performed for many years. Here, about two-thirds of vocational-training relationships conclude with a net benefit to the training company. For the remaining third, net costs arise immediately after the conclusion of training, but these are in most cases offset by short- and middle-term benefits. Short-term gains emerge through the avoidance of recruitment and initial-training costs associated with new employees. Middle-term advantages come about as a result of the very company-specific training provided, which allows the organization to obtain skilled workers with qualifications that either could not be found on the external labor market or would be available only at high wages. The question of the costs and benefits of vocational training thus gains by a nuanced analysis, as a profit-based calculus is the best argument for a company deciding whether or not to invest in vocational training (Muehlemann and Wolter, 2013).

The nature of reforms

Generally speaking, reforming education systems is a complex undertaking. This is true in particular for vocational training, which – positioned as it is between a society’s education system and labor market – must interact with a diverse set of actors and institutions. Institutional actors include ministries responsible for specific policy areas at various levels of the national and subnational administrations, as well as social partners and companies whose facilities serve as training sites and will thus be affected by any reforms.

Different institutions utilize different rationales for action and are subject to different incentive structures. An education ministry, for instance, will often aim to expand the scope of its own power and its institutional standing even as it advocates on behalf of educators. Companies and employer associations are by contrast driven by the economic rationale of profit maximization. For their part, trade unions may advocate for fair minimum wages but are also concerned with maintaining membership numbers. Every reform has winners and losers. For example, introducing trainee salaries creates changes in wage structures; expanding the scope of vocational schools requires a restructuring with profound consequences for teaching staff; and introducing vocational training will initially require companies to increase their investment in personnel and other costly resources. Implications such as these must be factored into the implementation of any reform.

Given these various logics conditioning action, every reform attempt initially runs the risk of being written off as a measure primarily reflecting the interests of a specific stakeholder. Involving the whole spectrum of stakeholders early in the process is therefore a key factor in facilitating reform success. Leading institutions such as ministries in charge of the process must initially identify key stakeholders’ core interests and concerns. In a second step, a series of joint meetings could be held in order to discuss and formulate a consensus-based agenda. The political capacity to carry out and enforce reforms depends on the extent to which stakeholders affected by a reform perceive such changes as being relevant to their shared objectives. Though time consuming, participatory processes of this kind are worthwhile investments. All too often, reforms are blocked by stakeholders whose interests were unacknowledged in the early stages of the process (Bertelsmann Stiftung, 2011).

Communicating a reform agenda should be accompanied by efforts to raise public awareness of the issue. Change is possible only when political attention is driven by public opinion to focus clearly on a subject. Youth unemployment, skilled-labor shortages, and the narrowing scope of opportunity available to youth are examples of issues relevant to vocational-training reforms that might be highlighted in public-awareness campaigns.

Obviously, a transfer process implies much more than simply working from an existing blueprint. It is a complex undertaking that needs thorough consideration and considerable patience. In addition, transfer is not a one-way street; the “modular approach” to transfer cited in this article demonstrates that there is no ideal system, but that opportunities can be created by adapting others’ experiences to the needs of a specific country. However, this approach may also be useful in broadening perspectives within the countries that have dual VET systems today. Thinking in terms of individual elements instead of taking a monolithic view of the VET system may enable policymakers to identify areas needing reform or improvement. Even a much-praised VET system such as Germany’s has shortcomings, and it too could benefit from other countries’ experiences. In other words, transfer is best seen as a two-way process, offering both parties an opportunity to learn from one other.