Enhancing enterprise expenditure on VET: Policy goals and mechanisms

Abstract

Increasing enterprises' expenditure on their employees' vocational education and training (VET) remains an important policy goal for governments in many countries. Policy mechanisms implemented to secure this goal include the legislated and mandated approaches adopted in Germany, France and Australia, and measures designed to encourage voluntarism and exhort enterprises to increase their expenditure such as in the United Kingdom and the USA. These policy mechanisms represent quite different approaches to and context for policy implementation. Their goals can be equally diverse, including subsidising government expenditure on VET, securing a more equitable distribution of training opportunities across and within workplaces, improving the quality of skill development, and responding to strategic or particular localised skill development needs. Each of these kinds of goals likely requires distinct kinds of policy measures. The primary concern of this paper is to identify goals for increased enterprise expenditure on VET and align and elaborate policy options for achieving these goals. Throughout, the balance between efforts to mandate and regulate are contrasted with those attempting to change enterprise sentiments more persuasively, and for the longer term. However, given that decisions about expenditure will largely be made within enterprises, ultimately most of these policy goals will only be met through the development and sustaining of a sentiment within enterprises that is favourable towards expenditure on training.