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IDB: Transformation: Skills for Productivity

Economic Development and TVETin South Korea

Lima Peru, June 12, 2014

Jisun ChungKorea Research Institute for Vocational Education and Training

Changes in GDP per Capita since 1960s

1965-1995: 100-times increase in GDP per capita only in 30 years.

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

‘70 ‘75 ‘80 ‘85 ‘90 ‘95 ‘00 ‘05 ‘10 ‘11‘60 ‘65

105

11,471

21,529

100-times increase in

GDP per capita

($)

22000

2

‘13 ‘14

24000

26,20426000

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[Success Factors of the Korean Economy]

1. Government Leadership in Economic GrowthImplementing a series of “Five-year Economic Development Plans” 1st –7th : 1962 – 1996

2. Success of Private SectorThe major domestic companies (Samsung, Hyundai, Kia,

LG, Daewoo, POSCO .….) lead national economy

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[Success Factors of the Korean Econ-omy]

3. Human Resources Development<chart> Pop. attained at least upper secondary ed

(2013) 100

80

60

40

20

0

Canad

aOEC

D

aver

age

Korea US

France

United

Kin

gdom

Ger

man

y

25-34 year-olds

55-64 years-olds

Indigenous Enthusiasm for Education and HRDdichotomy between old and new generations

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Shift in Industries (1960s)

Before 1960◁ Traditionally agricultural society

-Government planned to shift from agriculture to manufac-turing which was more value-added.

(strategic industry)

From 1960s◀Industrialization

◀Manufacturing industries

- general merchandise

- light industries

(e.g. textiles, footwear, wig)

◀ Labor Intensive export-ori-ented industries

- with comparative advan-tage of cheap and abundant labor

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Policies of Vocational Education and Training supporting Economic Development

• Construction of infrastructure of vocational education Primary education for six years has been compulsory to sup-

port industrialization. Public training centers were established. Vocational Training Act in 1967

• Cultural Factors: People’s indigenous enthusiasm for edu-cation and work (Confucian culture)

- diligence: work hard for family, society, and country

- aspiration for upward social mobility: Skills development (ed-ucation and training) was mechanism for social upward mobility.

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1970s~1980s: Transitioned to Heavy and Chemical Industries

petro-chemical, shipbuilding, automobiles,

electric and electronic industries

◆Skilled workers and technicians were needed

- expansion of vocational high schools,

vocational colleges

- Increase in in-house training system

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1980s~1990s: Technology-intensive Industries

• Shifted to technology-intensive industries– Demand for high-skilled, multi-skilled technicians – Expansion of 2-year vocational colleges,

polytechnic universities, and 4-year universities – Increase in role of public training organization and

qualification authorization (HRD Korea)• Employment Insurance System was established in

1995. (Social Safety Net: for the unemployed as well as em-ployed to be trained)

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Knowledge-based Economy In 2000s

• IT, BT, NT, CT, ST, ET… knowledge intensive, more highly skilled workers were needed

• Labor cost raised high with increase of national in-come and more educational achievement.

- Low labor cost was not a comparative advantage any more : many developing countries retain lower waged labor-force

• Then high skills and knowledge are more important to develop competitiveness.

Source : Bank of Korea

Brief History of Skills Development Poli-cies in Korea: Industry and Export Profile

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Key Skills Development Policies

Foundation of 22 vocational high schools, 1954

Setting up of 6 ‘Skills Youth Center’ in preparation for World Skills Competition, 1969

Setting up of 42 practice factories in vocational schools, 1967

Policy of 6:4 general: to: vocational high school ratio, 1969

Increase in vocational college capacity (10,160 students in 1962 → 17,920 students in 1967)

On-the-job training made compulsory , 1973

Yearly increase Sci.& Eng. Vocational College students to ease the shortage of technical manpower , 1991

Increase in trainees 98,863(1967)→1,006,822(1994)→5,000,000(2010)

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Timely supply of skilled workforce in step with the industrial development stages has contributed to economic development.

SD, heavily represented by government-led public training in the initial stage, is in transition to market-led paradigm marked by voluntary participation and government support.

Labor-intensive light industries (cheap labor=comparative advantage)

Technology-intensive industries (skilled labor)

Knowledge Industry (High-skills/ High-tech)

Contribution of Skills Development

-10

10

30

50

70

90

1970 1975 1980 1990 1995 2000 2003 2010 2012Primary Lower Secondary Upper Secondary Tertiary

Labor-intensive Technology Knowledge-based

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Muchas Gracias!