This paper aims to introduce selected issues from the international literature on skills
training into the South African policy forum. Reform of national strategies in skills
production has characterised a number of industrial as well as certain developing
economies in recent decades. Their experience is potentially valuable locally.
The main lessons are that skills training resembles education in being partly a public good.
The acquisition of skills parallels the acquisition of knowledge. Training opportunities do
have to be rationed by some mechanism, either through the market or by rules internal to
an organisation engaged in training, but the content of the competency learned is a form
of knowledge. More competency with economic value that is acquired by one person does
not mean less of it is available for acquisition by another. Nor, secondly, can non-payers
be wholly excluded from the benefits of training financed by others. For example, there
are separate gains for fellow workers, for employers poaching trained workers, and for
investors in new technology. So certain economic decision-takers can free-ride on such
investments in human capital. As classic examples of market failure they make clear that
simple allocation through a market is not at all adequate for a national system of skills
training.
The second lesson is that problems of information, incentives and market power preclude
the emergence of a training equilibrium in which individual workers and employers pursue
their interests successfully and therefore efficiently. In practice most training takes place
on the job, where it is difficult for an outside agency like the state to influence investment
decisions directly. Sensible roles for the state are to supply needed information, to put
in place positive and negative incentives where needed, to provide accreditation that
is credible in the market, to set up a framework of regulation that fosters informational
transparency and constrains skills poaching, and to invest in high quality prior education
for trainees entering occupational markets. An additional state function is to provide
workable policy devices like ‘temporary migration programmes’ that enable active skilled
labour recruitment from source countries. International precedents exist that show the way
in a number of these expedients.
