The private sector creates 90% of all jobs worldwide and plays a major role in reducing global poverty. Dynamic and growth-oriented entrepreneurship needs specialised know-how and skilled workers. Switzerland has a successful vocational training system based on the cooperation between vocational schools, firms and the state. Partner countries can learn from this experience.
Many partner countries face high levels of unemployment. One reason is that the vocational training system fails to address employers’ needs. As a result, schools are not providing future employees with the skills that employers are looking for. This is not in the interest of trainees or companies, and it does not contribute to economic growth. Another reason for high unemployment rates is the lack of the right framework conditions, knowledge and investors to help new and innovative businesses enter the market and become competitive.
Entrepreneurial spirit creates jobs
The world is full of people with innovative ideas and a zest for action. They offer enormous potential to create new jobs and contribute to economic growth. However, start-ups in emerging markets often fail shortly after they spring to life. Moreover, existing companies are unable to maximise their growth potential. Firms often lack access to expertise, capital and crucial services in their countries. SECO contributes to improving the conditions for successful entrepreneurship in its partner countries.
SECO’s entrepreneurship programme promotes the creation of a local entrepreneurial ecosystem. Through a variety of measures, the programme aims to give start-ups and entrepreneurs a greater chance of long-term success. It also broadens the range of existing local support available. SECO cooperates with incubators, investors and mentors as well as with the media and the diaspora. The programme is implemented by Swisscontact and J.E. Austin Associates in Serbia, Albania, Bosnia, Macedonia, Peru and Vietnam. Following a positive interim evaluation, it will be extended by a 2nd phase (July 2019 to 2023).
Innovation and quality need to be backed up by skilled workers.
Sharing Swiss experience
Switzerland has a well-functioning vocational training system. Its dual system covers the theory – where apprentices attend vocational schools – as well as practical in-company experience. Such close collaboration between training institutions and the private sector produces better trained workers, who acquire the skill sets that companies actually need. SECO coordinates its activities with the State Secretariat for Education, Research and Innovation (SERI) and the Swiss Agency for Development and Cooperation (SDC).
Training systems should address the needs of the private sector. In turn, this helps to create better jobs and scale up productivity.
SECO supports the dialogue between public authorities and the private sector in partner countries. The goal is to match the professional skills taught with the companies’ needs. In Indonesia, for example, SECO is fostering a cooperation platform between technical schools, companies and the state.
Improved skills for success
A good vocational training system makes for satisfied workers, who enjoy better prospects on the labour market as a result of increased productivity. Thanks to better-trained workers, a company becomes more competitive and can then expand and create more qualified jobs. This has a knock-on effect on suppliers, who can also create new jobs with higher value added and, as a result, better wages. Job creation is instrumental in reducing poverty in a country.
The Skills for Competitiveness project (S4C) aims at strengthening the vocational education and training (VET) system in Indonesia by enhancing five Polytechnics in the steel, food processing and wood sectors. The project’s objective is to “dualize” and to strengthen the mechanism by integrating the private sector into the VET system. By linking selected Polytechnics with the private sector, the project tackles the lack of skilled workers (skills gap).
The project’s geographical spread creates economic perspectives, contributing also to the economic and social inclusion of peripheral regions.
For many family-run businesses, planning for succession is a critical challenge, and it is not unusual to find the boss still running the company after retirement, with his successors unable to agree on management structure. Good corporate governance, with a separation of operational, strategic and supervisory functions, contributes to the long-term success of family businesses. And as good corporate governance also reduces the lending risk for banks, businesses can borrow on more favourable terms. SECO therefore supports efforts to improve the framework conditions for good corporate management and to offer training to family businesses and
expand a network of local consultants.
Promoting better working conditions
Jobs need to meet certain minimum social standards if they are to ensure a safe and humane working environment. Better working conditions also help to increase productivity. SECO is therefore working alongside the International Labour Organisation (ILO) to ensure that international labour standards are being upheld.
The Better Work programme was launched as a partnership between the ILO and the International Finance Corporation (IFC). It helps exporting garment and textile factories to adhere to national labour laws as well as the core international labour standards. This way, it also improves the living standards of thousands of workers. In addition, Better Work makes it possible for garment factories to participate in global trade and to meet the requirements set by buyers. Here, the programme takes a participatory approach and places great importance on including workers in the process of improving their own working conditions.
The Sustaining Competitive and Responsible Enterprises (SCORE) programme was developed by SECO and the ILO. The SCORE programme aims to help small and medium-sized suppliers achieve higher productivity and better working conditions, particularly in the textile and tourism sectors in developing and transition countries. The programme offers training and on-site consultations in workplace cooperation, quality management, occupational health and safety, cooperative HR management and cleaner production. The services offered through the SCORE programme lead to higher productivity and better competitiveness for participating enterprises. This enables them to secure long-term contracts from the industrialised world and to create decent jobs in developing countries.