Skills Development

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Skills Development and Koreas Experiences
October, 2006
Korea University of Technology and Education
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1. History of Vocational Training Policies in
Korea

• Beginning Stage in the 1960s and 1970s

Background

• Economic Development Plans Started in 1962
• Massive demand for skilled workers, but
• Lack of funds available
• Lack of vocational training facilities
• Lack of training experts experiences

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• Beginning Stage in the 1960s and 1970s

Major Policies

• Vocational training system established since
  1967
• Training criteria determined to promote
  various
• programs
• Government-led training to provide skilled
  workers
• Founding public vocational training
  institutions
• Funding by ADB IBRD loans
• Compulsory in-plant training adopted since 1976
• Training levies imposed on non-complying
  firms
• Institution to train instructors established in
  1971

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• Beginning Stage in the 1960s and 1970s

Further Issues

• Technical difficulties in
• Designing and operating training institutions
• Supplying qualified instructors
• Foreign technical assistance required to solve
• those difficulties in short period
• German technical assistance played an essential
  role
• (also ILO, Belgium, Japan etc.)

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• Growth in the 1980s

Background

• Changes in industrial structure
• Labor-intensive ? technology-intensive
• Mass production ? flexible production
• Increasing students in higher education,
• decreasing trainees
• Increasing need for upgrading training levels

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• Growth in the 1980s

Major Policies

• Focus shifted from simple-skilled to
  multi-skilled
• Longer training periods
• Upgrading refresher training emphasized
• Training for white collar workers
  supervisors
• Integration of training criteria skill test
  criteria
• Financial subsidies increased to activate non-
• government training

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• Growth in the 1980s

Further Issues

• How to improve efficiency of training facilities
  to better meet industrial demand?
• Policy emphasis changed from quantity to
  quality
• Adjustment of training criteria testing
  criteria to the
• industrial needs
• Integration of public training institutions

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• Transition period in the 1990s

Background

• Focus of training to be changed, to enhance
  competitiveness of firms
• Initial training ? upgrade training for
  employed
• Public training ? in-plant training
• Target manufacture workers ? all workers
• Financial crisis 1998-2000

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• Transition period in the 1990s

Major Policies

• In-plant training system incorporated into Skills
  Development Program under Employment Insurance
  System in 1995
• Compulsory training ? EI contributions /
  subsidies
• Extended to all workers, all industries to
  cover lifelong
• skills development
• Safety net for unemployed
• Unemployment measures based on training for
  unemployed
• Founded Korea University of Technology and
  Education in 1992 for upgrading of instructors
  HRD experts

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• Innovation in the 2000s

Background

• Growth of IT, BT, etc.
• Lifelong workplace ? lifelong occupation
• Polarization of labor market more opportunities
  for skilled workers, less opportunities for
  disadvantaged

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• Innovation in the 2000s

Major Policies

• Closer link among business, school, research
  government in RD, skills development programs
• Universities growing roles in providing
  industry needs-oriented manpower skills
  development programs
• Continuous skills development across working life
• Organized learning at workplace
• Workers voluntary skills development
• Universityindustry cooperation programs
  increasing
• at national and regional levels
• Special programs to improve skills of
  disadvantaged

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2. Financing of Skills Development

• Compulsory Vocational Training (1976-1998)

• Companies with 300 employees or more (1976)
• ? companies with 150 or more (1992)
• Non-compliers to pay training levies
• Funds from the levies used for training
  expenditure
• Trainees 2,180,000 (76 98)

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• EI Skills Development (1995)

• 3 programs in EI financed by EI fund
• Unemployment benefits, job security skills
• development
• Skills development program
• Contributions 0.25 0.85 of total wage,
  
• depending on company size
• Support for employers employees by EI fund
• Trainees 2,460,000 (06)

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3. Implications
Driving Economic Growth

• Timely supply of workforce for each phase of
  industrial development
• (light ? heavy/chemical ? high-tech industry)
• Abundant quality workforce as a driving force
  behind the rapid economic growth

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Flexible Policy Responses

• Policy responsive to changes in industrial
  structure
• Basic training in manufacturing ? Basic
  Upgrade training in overall industries
• Private sector-led initiatives
• Public training ? Private Voluntary training
  with govt. support

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Tackling Mass Unemployment

• Large-scale training for the unemployed during
  the financial crisis
• Support for living re-employment of the
  unemployed
• Expanded training in IT sector facilitated
  transition to an information-based society

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Active Labor Market Policy

• One-stop services at PES (Job Center)
• Closer link among unemployment benefits, job
  placement skills development under EI system