Industry training: an overview

This report is part of the work commissioned by the Industry Training Federation (ITF) and completed by independent economic research agency BERL to examine the economic costs and benefits of industry training. This work is being used to inform the New Zealand Government’s review of industry training. This report focuses on how industry training organisations (ITOs) fulfil each of their recognised roles under section five of the Industry Training Act 1992. Under the Act, ITOs in New Zealand have three main roles: (1) arranging for the delivery of industry training that enables trainees to attain national standards; (2) designing national qualifications and running moderation systems to ensure fair, valid and consistent assessment against national standards; and (3) providing leadership to their industries on skill and training matters, identifying current and future skill needs, and working with employers and employees to meet those needs. The report has three sections. The first part discusses how many people are currently engaged in industry training; what industry training involves in terms of delivering national standards and qualifications in the workplace; and how ITOs work with employers to set and maintain industry standards, and to review, modify and develop qualifications. This section also discusses how qualifications development and standards setting does not occur in a vacuum and how government policy changes such as the Targeted Review of Qualifications modify behaviour in the tertiary education sector. The second part of the report discusses how ITOs provide a key role in identifying and responding to industry skill and training needs. These skill and training needs may be due to demographic changes or economic changes, or a combination of both. This section also discusses how ITOs work with schools to encourage new entrants into industry training, and to provide career information and advice to career influencers such as parents and secondary school teachers. It also illustrates that whatever the driver of change, ITOs work with industry and employers to identify current and future skill needs and how industry training can meet this. The third part discusses the economic rationale for government investment in industry training. It discusses how government invests in industry training and vocational education to reduce market failure and improve efficiency. It briefly examines the situation in other countries in terms of the provision of vocational education and training before discussing in more detail how ITOs rectify the potential for market failure in New Zealand. As well as looking at government investment in industry training, this section explores why employers invest in industry training and how productivity improvements are only one part of the equation. Examples here are drawn from two international studies and interviews with employers and ITOs. Overall, the report provides qualitative and quantitative information on the process of arranging and delivering industry training, establishing recognised national qualifications for different levels of skill and experience, and the leadership required to ensure that future industry skill needs will be available or addressed. The report draws throughout on data and information provided in interviews with ITOs, industry representatives, training and Modern Apprenticeship Co-ordinators, and employers. It also refers to official data sources, BERL databases, and information and data provided by the ITOs.

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