Under the Global Production Networks (GPN) / Global Value Chain (GVCs), the MNCs usually locate their units in accordance with the skill of the labour force which they get. If some of the Asian countries managed to attract huge amount of foreign direct investment, initially in labour-intensive manufacturing and then in other sectors, moving up the global value chain. It is because their education in general and Technical and Vocational Education and Training system in particular was well-suited at the time. As, for developing countries, skilling at a mass-level will not only help to attract Foreign Direct Investments by increasing the productivity of the labour force but also to mitigate inequality and reduce poverty as it will up to an extent solve the crisis of employability. For the developing countries the dual-corporatist, Technical Vocational Education and Training (TVET) system of Germany offers so many things to learn.
The paper which is divided in three parts argues that, instead of having the wages as low as possible and engaging in a race to bottom, a country with a well-functioning TVET system can make itself a favourite manufacturing destination. The first part of the paper looks at the opportunities provided by GPNs/GVCs to developing countries and the issue of skills. The second part of the paper gives a brief account of the German TVET system. The last part of the paper highlights some of the lesson which the developing countries can draw from the German model.
The relevance of dual model of TVET system for the developing world