The enduring fallacies that plague official skills policies

No policy changes in the past two or more years show evidence that we will soon be seeing skilled workers emerge at the rate all producers of goods and services in the economy believe is required. The sooner policymakers and their backroom advisers accept this commonsense criticism the better.

But will they? Authoritarian governments tend to presume that the subject population will accept that "we, the government, know what is best for you, so just leave it to us". In the former socialist bloc countries, where no one dared criticise government because the horrors of Stalinism remained vivid in memory, an entire culture of sly jokes against the state emerged because of this strict prohibition.

One classic example is the boy-scout joke. A boy scout gets home at the end of the day and says to his mother: "Wow, but I had a hard job doing my good deed today." Mother: "Why was that?" Scout replies: "I helped a blind man to cross the road." Mother: "But why was that so difficult?" Scout: "Because he did not want to go."

Will we be seeing a rash of boy-scout jokes soon in South Africa, pointing to our government's firm belief that it knows what is best for all of us, and that we should behave like submissive blind men? This is the case in numerous spheres of economic and social policy, specifically so in the skills training arena.

The dominant presumption of the authorities is that the issues are simple and understandable, that they already have the strategic insights required, and that it is merely a question of persuading decision-makers throughout the economy that actions in accordance with stated policies will raise the volume and efficiency of investments in skills training. In this way, national aspirations to generate a great deal of new human capital will be met.

Unfortunately, this is an enduring fallacy. At the same time, though, not all is gloom and doom in the skills training arena. Two department of higher education and training documents in the past year show genuine concern about the system's deficiencies — the green paper on post-school education and training and the government notice concerning sector education and training authorities (Setas). These show definite progress in grasping what issues are at stake.

But too many misconceptions in official thinking remain. Three major ones are:

l The role of private sector employers is still underplayed. This requires perspective. Formal employment in South Africa is currently 14-million, and approximately four out of five, or 80%, of employees are in the private sector. Yet the green paper states that the government's intention is that the public sector must become the main generator of skills.

As an afterthought it does acknow-ledge the training role of private employers, but they are treated as secondary players. This is bizarre, and it compels one to consider that ideology might be playing a role in policy thinking. If so, that would be unfortunate: textbook Marxism is not a good guide to policy formation and reform in a contemporary mixed economy. But for the present this has to remain speculation.

l The information available is far too unrealistic, as are the incentives believed to motivate every decision-maker in the sphere of skills training.

These are employees, employers, intermediary organisations such as Setas, training providers and qualifications authorities.

This presumption underlies the visible official obsession with the planning of skills supply and demand at sectoral and national levels. No policy reformer asks who will use these planned skilled worker numbers, planned occupations, planned courses, planned on-the-job training or planned programme offerings at further education and training (FET) colleges. How will these influence the decisions to allocate resources?

The most convincing answer is nobody uses such planned magnitudes. This is because at levels above that of production — industries, sectors and the national economy where information about worker numbers, costs, occupations and more is added together — this planning information is too imprecise and unwieldy to be of use when making investment decisions about skills production.

l Linked to the official failure to recognise private employers as the primary interest group is the wholesale shortage of opportunities for on-the-job training that face trainees, what the green paper calls "workplace experience". This is one of the most serious deficiencies of our skills training strategy and will undermine the major effort announced in the green paper and again more recently in the media to pour resources into upgrading and reforming the country's FET colleges.

Labelling this "the key area of focus for expansion [of training]", the department is commendably candid here. It admits in the green paper that "relationships between colleges and industries are, with some exceptions, weak. It is estimated that approximately 65% of students at colleges are unable to find workplace experience, which is required to complete most diplomas but valuable for all students."

An additional cause for concern is that officials believe that the public sector can play the role of on-the-job training provider that is now missing within the system.

"It is evident that state-owned enterprises, workshops of the department of public works, government departments and state programmes such as the extended public works programme and all public infrastructure projects must play a more direct role in expanding workplace-based training," the green paper says. "The public service should be a training space … In addition, it is essential that the private sector also play a key role in providing workplace-based learning, with the assistance of the Setas where necessary."

This is a serious misconception. Of course the public sector as employer can contribute towards the on-the-job training component of the training package that is now missing.

But as a new systemic tactic its ­limitations are fatal:

• The public sector is too small in employee numbers — only about a fifth of the total workers who are formally employed;
• Its accessed range of production technology is narrow and too specific;
• When public sector producers use such technology it easily slips into obsolescence without the spur of competition and market signals;
• There are weak incentives to train adequately because in general the public sector does not look for skilled workers to use in production, which contrasts markedly with private employers; and
• The private scetor has strong survival motives, is highly risk averse and hence is reluctant to invest in additional on-the-job training simply at government's urging. The experience of the various phases of the national skills development strategy makes this reluctance clear.

Additional problems endure despite the welcome new openness of official sources about the training system's deficiencies. In brief, three other problems are:

First, matching workers to employers is not like a game of Snap. You cannot accelerate the process by allowing the free pursuit of private interests through the occupational market, nor can the state accelerate the process by attempting to coerce employers to train. Too often a training equilibrium does not exist because of market failure unless employers and the state know how to intervene.

The German system sets the gold standard because employer organisations overcome the market's failure by, for instance, outlawing and punishing skills poaching between employers. In South Africa it is highly likely that poaching (or free-riding) is a major cause of companies' reluctance to invest in training only to lose the newly skilled worker. But no research, government or private, has been conducted into this important issue;

Second, government's overriding concern with equity and the necessity of reversing past discriminatory access to skills training appears to have pushed into the background the underlying investment requirements for efficient skills acquisition. This is self-defeating; and

Third, the separation of education from skills training in the conception of policy is an instance of inadequate conceptualisation. This is a major weakness in our country, despite the division between the two for policy purposes being only for institutional convenience.

Sean Archer is a research associate in the Southern Africa Labour and Development Research Unit at the University of Cape Town