By: Francis Cook
Mercury chief executive Fraser Whineray believes New Zealand should aspire to be more like Switzerland, and it starts in the education system.
Whineray was part of a business delegation that travelled to Switzerland in June this year. He and other members of the convoy were exposed to the country’s pragmatic dual education system.
In Switzerland, teenagers are essentially groomed for roles in the economic system much earlier than other countries.
Only around 20 per cent of young Swiss go into a university stream; the rest enter vocational education training (VET) streams where they undertake part-time apprenticeships as they continue with school.
“Labour is scarce and expensive,” Whineray said.
“Switzerland cannot afford a mismatch. Supply needs to meet demand.”
Whineray said students in New Zealand are making decisions about which subjects to study at age 15 without a full grasp of how it could affect career choices in five years’ time.
Young Kiwis are still essentially encouraged to get a Bachelor of Arts degree, which Whineray said was simply not in demand.
He suggested the idea of canvassing top New Zealand companies to understand what skills would be in demand in the next five to 10 years, then utilising that information by filtering it to young people making subject choices in high school.
Unlike New Zealand, where apprenticeships normally mean plumbing, electricity and building, Swiss students are trained in accountancy, banking and a range of other skills designed to have them enter the workforce as efficiently as possible.
“There are over 200 types of apprenticeships, which are highly respected,” he said.
Whineray said any education or training that led to employment should be valued, not looked down upon.
Another Swiss efficiency New Zealand could benefit from is the ability to move people effectively. Whineray said Swiss cities and villages had precise infrastructure that could transport people quickly and effectively.
“Switzerland has very sophisticated people-mobility,” he said.
“Right now I can’t live in Birkenhead and work in Mt Wellington easily. It fragments the market and it’s sub-optimal.”
The issue particularly affects parents who need extra mobility.
“We need to get the whole labour market engine clearing more efficiently so New Zealand can leverage its human capital,” he said.
Finally, a unique element of the Swiss model is their decentralised nature which allows regions to compete with one another through lower taxes and other incentives.
“If a region needs to grow, they can competitively change taxes and even make bespoke tax deals,” Whineray said.
A key takeaway from the Swiss delegation for Whineray was the low unemployment among youth and the high wages the country pays workers.
Switzerland’s income per capita is among the world’s highest and it frequently rates as No 1 on the Global Innovation Index, despite the comparatively low numbers of university graduates.
Whineray believes New Zealand could follow suit by making this country an even better place to do business and rethinking the ways we ensure youth are getting the skills and experience to maximise their opportunities for quality employment.
Swiss vocational model impresses chiefs
An overwhelming 94 per cent of chief executives want the Government to take a leaf out of Switzerland’s book when it comes to skills and training.
The Swiss utilise a vocational education training stream, where students combine school learning with skills developed in the workplace, resulting in an unemployment rate of just 3 per cent (as of July 2017).
After a delegation of Kiwi business leaders visited Switzerland earlier this year, the country’s approach to skills development and training impressed many.
“Our once world-class education system no longer is,” argued Roger Partridge, chairman of the New Zealand Initiative, the organisation that facilitated the delegation. “We need new solutions to give us the skilled workforce business needs, and which young New Zealanders deserve.”
And when asked to rate the impact of a variety of domestic factors on business confidence, respondents to the Herald’s CEO Survey gave an average rating of 6.8 to the skills and labour shortages factor.
This ranked as the fifth most impactful domestic factor out of the 18 rated by business leaders.
This has been a consistent trend over the 14 prior Mood of the Boardroom surveys.
Around 70 per cent of students in Switzerland enter the vocational education and training (VET) system, which also compensates students for the practical work they do – usually a maximum of three or four days per week, with the remainder made up of academic classes.
Students have the option of applying for VET programmes once they reach the age of 14, which cater for around 230 different professions.
And though vocational training programmes typically evoke images of trade and industrial professions, the Swiss model includes programmes for sectors such as information technology and other STEM fields.
As Partridge wrote at the time, the dual track system “has contributed to a highly skilled, more future-proofed workforce, and enviably low levels of youth unemployment”.
“It certainly warrants further study.”
All of this adds up to a society in which youth unemployment is just 8.6 per cent (the fifth lowest in the OECD), as compared with New Zealand’s 13.2 per cent (18th in the OECD).
Meanwhile, its higher education system continues to punch well above its weight: ETH Zurich, the country’s premier STEM university, ranks 10th= on the Times Higher Education Rankings.
The country boasts three universities in the top 100, despite being less than double the size of New Zealand – by comparison, our top-ranked university (the University of Auckland) comes in at just 192nd.
While transforming the education system is a common catch cry from politicians across the spectrum, most policy proposals appear incremental in comparison to the structural differences in Switzerland – and most Kiwi CEOs appear keen for that model to be considered more seriously.
The Herald’s Mood of the Boardroom 2017 Election Survey attracted participation from 118 respondents. The results were debated this morning by shadow finance spokesman Grant Robertson and National’s Finance Minister Steven Joyce.
Source: NZ Herald