These days we were working on the next issue of PARTNER magazine where we have a major article about the SMEs in Georgian regions, the challenges and problems they are facing. The most common issue brought to us was the Vocational Education and Training. The SMEs they do appreciate low taxation, free trade agreement with the EU, special funds, Government financed infrastructural programs but they say they still struggle to get the benefits because they lack some special knowledge and they can not find the employees either with some special skills. After I checked this paper which I wrote back in 2013, however I noticed nothing much has been changed, thus it did not take me long time to edit it.
Over the years unemployment remains an endemic in Georgia. After the Soviet’s collapse Georgia’s politics and economy went through every imaginable policy. Before 90s country was a flagship in communist union of Soviets. Beginning of independence was marked by external wars as well as civil. It is hard to guess an economic policy within those years. Possibly it was close to post communist anarchism with some Wild West signs. The things improved later once little civil order was restored. Since that country obtained more or less coherent economic policy. True, it was heavily mixed on the ground but at least the fiscal and monetary policies were put under some policy framework. With this relative stability Georgia has achieved remarkable economic expansion by 1998 and was floating before the Government started disintegrating altogether, full scale corruption became deeply engraved informal system running the country.
By 2003 the Government has realized it was losing political battle and tried to enforce somewhat new policies, borrowed from the World Bank but it lacked capacity to act as well as it was too late.
From 2004 new Government started implementing mostly home-made economic policy with an interesting set of libertarian tools, together with building up strong, corruption free government institutions. Response was immediate, by 2007 country had double digit economic growth and rushing delegations from abroad to learn ‘Georgian know-how’.
2008 was a sudden halt, a painful halt brought by the war with Russia worsened by the world economic crisis. Because of political difficulties Government response was limited to only fiscal stimulation. Fiscal and monetary policies were stabilized within limited period; however the Government started prompt increase its hidden presence into real economy. Even before the strengthening of government institutions was accompanied by attempts to dominate over businesses in order to ‘purify’ and lift up their performance too; but now together with political pressure it has started shifting to Statism. Unfortunate prove, how far the ‘rights’ can drift away in young democracies. Strangely enough it was still accompanied with minor adjustments on the social side despite heavy political pressure and ‘inevitable’ has been realized late 2012 with sweeping victory of coalition of all imaginable political groups, from lefts to rights.
As it is obvious Georgia had no lack of experiments and reforms over the past 20 years but as it is also a fact – unemployment, high unemployment or even systemic unemployment is still there. Now, there are numerous articles what was done, or what should have been done, however I will try to keep an attention on one pillar which is essential for employment and Georgia’s example clearly supports this idea.
If one checks country’s largest job webpage – jobs.ge, he/she discovers simple fact, most of the folk looking for a job come from the universities with diplomas in either law or economics, sometimes diplomats, while there is a high demand for low or professionally educated people. It shows a clear mismatch between the market demand and supply. Is that so hard for youth to see it and adjust accordingly? Of course no, they do understand as well as their families but is there a system in place which can accommodate their needs?
In the Soviets Vocational Education was relatively ‘well functioning’ institution. As many other things they simply took German model, mutated it and put in place. Despite heavy modification dual system still has been working. After the basic education soviet teenagers were choosing between high and vocational education with significant amount to be attracted by VET centers due to the blooming industrial sector after Stalinist industrialization. As in typical dual system students were allocated at the enterprises for the practical skills and at professional centers for theoretical education. Outcome was somewhat rational division between high and VET educated citizens, with necessary skills and ready positions. Almost paradise. Whole soviet system started disintegrating slowly already before the West noticed it, during core soviet rule, but was not obvious until 80s, as we all know it ended up with full-scale collapse but interesting things started happening with Georgian vocational education system just after that. Surprisingly enough, VET system remained the same, actually only partially, government was left with ruined professional centers but now without enterprises and practices since this part became private and no one took care to adjust the system in order to integrate VET into commercial enterprises. Situation was only worsening over the years. After several attempts to ‘reform’ the education even theoretical part of VET became isolated from education chain.
Since the government pretended to be the ‘Ace’ especially after 2008, it has decided to crush over the VET in order to make it workable. With the millions of investment and beautification it was ordered to work, without real attempts to bring it to the private sector since they were not assumed to be capable to carry such important mission. And surprisingly to the government nothing happened. VET disobeyed and remained as it was out from general education system; and disconnected from business.
Now it is a history but very important to realize and try to learn on our own mistakes. Good thing is new government does show an interest and assumes VET as an important system and crucial for our economy and employment. At least the VET is the declared priority, at the best of my knowledge there are numerous commissions working on its reform, nice papers were produced. However there is another parallel world, a real world, where the business remains far away from the vocational institutions, the Government resumed the beautification once more, some centers are coming back being closed for many years but again under the state rule and even worse, sometimes they are given in management to other vocational institution those look nicer.
It does not really matter a model whether American or Finnish or S. Korean. It is clear it needs to be adjusted to Georgia because VET itself is not selfstanding independent institution. Rather it plays a connectivity role in between the theories and practice, students and entrepreneurs, schools and companies.
Despite the differences between the models still there are three major groups. One we already experienced during the communist time. Hard to confess but it was working, however it only works within red environment, hence it’s not relevant. Second is ‘no’ VET at all, we have this system already for the past 20 plus years, again we saw this system does not work either. And one we haven’t tried so far is VET as in integral part of general education and business.
In a nutshell, state should allow business to integrate itself within the VET system and vice versa; it must bring theoretical part to the reality requested by the enterprises, and system should be in place adjusting daily on market needs. At the same time state funded VETs should realize it is not their sole right to give the practical knowledge to students and they have to cooperate with private companies. State has to provide better analyze of the jobs market. It has to increase awareness especially at the level of secondary education thus motivating VET education. VET centers funding should be changed and target employment and education of youth rather than simple maintenance the VET centers buildings. Various forms should be allowed of VET centers and government monopoly drop if and when privates have willingness to take over existing VET centers. VET system should be included into the general education system and smooth connections, easy in and out, established. Comprehensive examination system must be developed with a system of recognition of informal education.
One shall understand the VET is the critical for a country. We do not have much time. Also there is no need to wait forever to make small changes, last year we established Entrepreneurship subject in the schools, it is not perfect but it needs to develop further, internships need to start, jobs fair needs to be established, informally obtained vocational education must be recognized, the system shall be in place which allows it and it is not a rocket science.
Picture below shows how VET was functioning in the Soviets and what Georgia inherited:
Key here was strong linkage between the Vocational Education Centers, so called PTUs, and Technikums and state-hold enterprises in two major dimensions. First at educational level, this involved practical and theoretical studies necessary for students to obtain a profession with the skills required by the enterprises. Second it was well functioning ‘labor market’ which was providing smooth job placement after VET. Once both collapsed no actions were taken to put new connectivity system in place to link these two sides through comprehensive mechanisms instead of ‘commanding state’.
If and when these linkages in education and employment are restored, system could be following (Finnish type):