TVET reform can boost productivity, wages and spur quality investments

ON Jan 18, the honourable prime minister exhorted the civil service to knuckle down on implementing the projects highlighted in the 2024 Budget.

Among the important projects that he singled out was the revamp of technical and vocational training (TVET).

The call is a valid one. The Malaysian Investment Development Authority (Mida) considers that a world-class TVET can attract quality foreign direct investments.

TVET aims to create a skilled workforce with up-to-date skills needed by the industry. Under the New Industrial Master Plan, the skilled workforce is targeted to increase to 35 per cent by 2030 from the current 25 per cent of the workforce.

There are close to 1,400 TVET institutions in Malaysia offering over 6,000 courses. Given this magnitude, the quality of the programmes is hard to assess.

Unemployment among graduates in Malaysia is close to four per cent while unemployment among youths is about 12 per cent. Such unemployment levels have been due to a perceptible shift to skills-based hiring.

TVET can alleviate such joblessness. Through upskilling and reskilling, TVET enables the reduction of labour shortages in critical sectors and job mismatches.

For example, some 42 per cent of graduates are in jobs that are not related to their field of study. A better match between jobs and skills improves labour productivity and, consequently, wages.

It, therefore, behoves the government to review the curriculums offered by technical and vocational institutions for their relevance to industry.

More importantly, training should focus on AI technologies which will increasingly become the mainstay in the workplace.

To undertake such an evaluation the government should collect high-quality data. The analysis of such data would provide better insights into what skills are needed in the various sectors.

The second initiative that offers a possible revamp of TVET is an apprentice system. Here, the worker learns a trade or a profession from as young as 16 years.

This is the case in Germany. Upon successful completion of their apprenticeship, the skilled worker is absorbed into employment with the company that had trained him.

Such apprenticeships are common in other developed countries. In Germany, for example, apprentices work about two-thirds of their time in the company learning a trade. The rest of the time is spent on formal education.

Upon completion of training, apprentices obtain a nationally qualified recognition that will enable them to enter their respective professions at a commensurately higher salary.

The Academy in Industry (AiI), pioneered by the Malaysia Productivity Corporation, comes close to the foreign models.

The AiI provides specialised training in collaboration with industries. Unlike the typical three-year apprenticeship in Germany, training under the AiI is between eight and 18 months.

Like the German system, the AiI promotes a dual system of on-the-job training with theoretical instruction. The National Skills Department recognises the qualifications after completion of the training.

Such government recognition improves wages and labour mobility post-training. It also helps raise the average years of schooling which the World Economic Forum, a rating agency, uses to assess national competitiveness.

Third, the 13 ministries that oversee the countless TVET institutions must consult the captains of industry. This is to ensure that their curriculums are industry-based.

The national-level TVET Council, chaired by the deputy prime minister, should structure and coordinate these consultations so that the government can speak with one voice. The AiI is one platform to do so.

Lastly, Malaysian parents largely disdain TVET as an educational medium for their children. They consider TVET only leads to low-wage jobs that are dirty, dangerous and demeaning.

Therefore, there must be a cultural shift in attitudes to overcome this social stigma.

The higher wages through upskilling and reskilling and the government-recognised qualification should dispel the dismal attitude towards TVET.

While all these measures testify to the government's leading role in TVET, like Germany and Australia, it is high time for industry to take the lead.

The writer is a former public servant and a columnist of this newspaper for over a decade

The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times

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