The contribution of vocational skills development to inclusive industrial growth and transformation: An analysis of critical factors in six countries

Renewed donor interest in vocational skills development (VSD) has led to a growing number of programmes that aim at providing skilled labour for the industry in developing countries. Little is known, however, about the contribution of such programmes to the creation of more and better jobs, the reduction of poverty, and, in consequence, inclusive industrial growth and transformation.

The project examines the critical factors that help or hinder vocational skills development in low and middle-income countries to contribute to inclusive industrial growth and transformation. The research is based on data from six countries, including Bangladesh, Cambodia, Ethiopia, Laos, South Africa and Vietnam. In each of these countries, 8 to 10 industry-specific VSD programmes are studied, with a focus on programmes that cater to major manufacturing industries (e.g. ready-made-garment, electronics).

In order to produce evidence that is a) relevant for the design and implementation of VSD programmes and at the same time b) reflects the critical role of contextual factors, the project brings together approaches from impact evaluation and the political-economic literature on skills formation.

The project aims at informing policy makers, VSD providers and stakeholders from the world of work what VSD programmes work under which conditions. This information is not only highly valuable for improving skills development, but also for moving the respective developing countries towards a higher degree of inclusive growth.

Many governments of lower income countries and international donor agencies have greatly increased their support to VSD. This renewed interest in VSD can be seen as a response to high rates of youth unemployment in the developing world. Given the important role of the manufacturing industry in job creation and economic transition, a significant proportion of VSD programmes cater to this sector. Almost no data, however, is available about the actual contribution of such programmes to the (potential) growth and transformation of industries. Without such sustainable industrial development, the SDGs – especially the targets in the fields of decent work, economic growth, and reduced inequalities – will be hard to reach.

This issue is therefore not only relevant for policy makers in developing and middle-income countries, but also for the development community as a whole.

In examining the linkage between VSD and inclusive industrial growth and transformation in a holistic fashion, focussing on collective consequences of skill development in complex systems, the project departs from past research on these topics. It especially highlights the significance of historical, geographical and institutional context, when designing and implementing VSD programmes.

It will assess the following hypotheses: Firstly, VSD programmes that focus on medium-level skills (e.g. for technicians) are more likely to contribute to inclusive industrial growth and transformation than those that focus on lower skill levels; secondly, VSD programmes in countries with a clear strategy and the respective capacity to link education and training to industrial development are more likely to contribute to inclusive industrial growth and transformation than those in other countries.

• Bangladesh
• Cambodia
• Ethiopia
• Lao PDR
• Republic of South Africa
• Vietnam

• Link to project website
• Links to project phase 1 (2018-2020) and to project phase 2 (2020-2023) on SNSF research database P3