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Lessons for the US Workforce: Austria's Vocational Education System

09/18/2013 04:19 pm ET | Updated Nov 18, 2013

I recently had the opportunity as a guest of the semi-annual George C. Marshall Visit to Austria program to take a close look at the Vocational Education and Training Program (VET) in that small but prosperous country. The term "vocational education" has long had a negative connotation in the United States, as we rush headlong to meet a goal of helping all of our students to achieve a four-year college education.

Apart from the problem of the rapidly rising cost of higher education in the US is the question of its impact on employment, stability of careers, and contributions to the health of the overall economy. Austria offers a much different approach to post-primary education in the US -- though similar to VET systems in Germany, Switzerland, and Denmark -- and one whose success merits a close look for this country.

After nine years of mandatory primary school training, Austrian youth make a choice of preparing for a university education or going into a VET track. This decision is made much earlier than in the United States, as the triage is made normally at the age of 15 in Austria. It's based on school performance, testing, and individual choice.

Roughly 80 percent of each age cohort goes into the VET program, a proportion higher than other VET-friendly countries such as Germany (about 60-70 percent go into VET tracks) and Switzerland (almost two-thirds). Half of those in the VET track are in traditional apprenticeship programs, which feature three to four days per week in a company training regimen in one of over 200 specialized occupations such as metal working, mechatronics, machine repair and control, welding, tool and die making, and other crafts. The other one to two days are spent in formal schooling to learn math, languages, and other general skills. The rest of the Austrian VET students go into full-time, school-based programs in a variety of areas that would be considered white-collar jobs in the United States: retail trade, banking, accounting, nursing, and hospitality, among others.

Austria is a heavily industrialized economy, with some 30 percent of output related to this sector, so the major roles apprenticeships play is appropriate for filling the increasingly specialized jobs required to compete in a highly competitive global economy. Similar to other central European countries, a key feature of the Austrian system is the buy-in of private firms to the VET system. All firms in Austria are required to belong to local economic chambers and contribute to the VET system, both financially and in terms of developing curricula for apprenticeship training.

With the cooperation and input of labor representatives, participating companies decide on the skills they need for the future success of their companies and set up the training programs with the help of local and regional educational institutions. Apprenticeships are awarded by each company, and the successful applicants are hired (at the age of 15 or 16), paid negotiated salaries, and trained in factories and schools according to the curriculum that is jointly developed.

At the end of the three-to-four-year apprenticeship, if the students pass the qualifying exam they are awarded a nationally recognized skill certificate. If they do well and pass additional exams, they can go on to become master craftsmen or to university education. Companies benefit by having a pipeline of trained workers (a high percentage of apprentices stay with the sponsoring company) and get increasing output from the students even before they complete the programs. Students in the full-time school VET tracks generally require three to five years of training, with mandatory summer company internships.

Almost 86 percent of those entering the VET track complete the program, a rate much higher than the European Union average. In part because so many young people enter VET at an early age, the youth unemployment rate in Austria is only about 8 percent, compared to an EU average of 23 percent and a US rate of 15 percent. Non-VET countries like France, Italy, and Spain have even higher youth unemployment rates. Austrian firms are generally able to meet their needs for skilled labor -- although company executives often report they would like to see a more robust pipeline due to demographic stagnation in Austria. Productivity in the country is about 15 percent higher than the EU average, which authorities attribute at least in part to the success of the VET system.

As an aside, it is perplexing to note that of the 20 percent of those who enter the university system, more than two-thirds do not finish. It is unclear why this is the case, as financing of higher education in Austria is largely paid by the government, and a university education, like in the United States, generally confers more privilege and advancement opportunities than the VET tracks.

The VET system is widely accepted in Austria and indeed is a product of the Germanic "social market economy," which emerged in the last century after World War II. It is highly unlikely that it would be imported to the US -- which has a more individually-oriented and services-dominated economy -- because it places a higher value in college degrees for all students, frowns on making career choices at a young age, and generally values white collar over what are traditionally considered blue collar occupations.

There are, however, some lessons from the VET system that ought to receive a better hearing in the US. First, we do need to address the question of skills shortages in many industries, especially if the resurgence many predict for US manufacturing is to be realized. Secondly, US companies need to become more engaged with local school systems to craft the right training programs to fill the jobs pipeline, especially with an already aging workforce in the industrial sector now beginning to retire. Thirdly, the economic results of the VET system for both workers and companies, if better understood, might help overcome the social and cultural stigma for this type of training and career path, which has grown over the years.

Finally, the aspirational goal of a university degree for every student might be tempered by understanding the high level of skills obtained in apprenticeship programs, the job satisfaction and career paths resulting from successful nurturing of skills, and the economic outcomes possible with a well-run VET system.