Approaches to Approaches to Developing Demand-Developing Demand-

based TVET based TVET Frameworks for the Frameworks for the

Informal Sector Informal Sector Presentation by

Ray Powell26 August 2010

A premiseA premise• Over-reliance on – foreign remittances,

donors, the development of new capital intensive (but not employment generating) industries in the formal sector can create the conditions in many developing economies for ‘jobless growth’

• There are no easy answers but perhaps one possible solution lies in stimulating and growing the informal sector

A premiseA premise

Stimulating growth in the informal economy can - •result in a growth in the demand for labour;•be a catalyst to a transition from the informal to the formal economy; from subsistence to mixed subsistence (a cash crop) to simple processing;•result in a demand for training

Defining the informal Defining the informal sector...sector...

• Own account or family workers• Low formal education; functional illiteracy• Irregular work; income and production is

rarely taxed• Operates in both rural and urban

contexts• Remittances from the formal sector a key

source of financial input to the informal sector

Defining the informal Defining the informal sector...sector...

• Most participants claim to “just get by”• Productive output is rarely measured so

its economic contribution is under-valued• The workforce is not ‘organised’ and

often preyed upon and exploited• Growth is constrained by inability to

access credit; to upgrade skills; and to organise

• No formal recognition for their skill sets

Key sectoral informants…Key sectoral informants…• are different from those in the formal

sector;• generally reside and mix in the same

community but have a capacity to see the ‘bigger picture’;

• could be traditional or elected community leaders; church leaders; leaders in sporting clubs, women’s groups, farmers’ groups; teachers; extension officers; and workers in NGOs etc

Obtaining data on Obtaining data on labour & training labour & training

demand…demand…• is a painstaking process that

requires establishing trust• needs to be structured but not

overly bureaucratic (re language)• needs to be accompanied by

trained and astute observation• Needs to be regularised

Informal sector Informal sector challenges in challenges in governancegovernance

• No government can ‘take over’ the informal economy. Overall conditions for growth must be present for stimulation of the informal sector to be successful. It can be as difficult to stimulate as many have found to close it down.

• In fact, governments have begun to realise that to stimulate the informal sector, more can be achieved by doing less.

At whole of government level:

Challenges in Challenges in governancegovernance

• Why? Because frequently a policy intent to ‘stimulate’ somehow becomes transformed into an effort to regulate.

• Or a well-intentioned policy to regulate – e.g. to protect all consumers – is framed on the basis that “one size fits all” inadvertently disenfranchising the informal sector

Challenges in Challenges in governancegovernance

• Modern demand-based TVET systems prescribe a Quality Assurance model predicated on the premise that graduate output will be seeking employment in the formal sector, hence the paramount role that major employers are required to play in the quality assurance process

• Its relevance to the informal sector is questionable

At the vocational training system level:

A demand-based A demand-based framework for framework for governance governance

• Governments should perhaps be simply trying to put in place supportive, growth facilitating policies across the entire economy, recognising that often the businesses they now see operating in the formal economy had their roots in informal economic activities.

• E.g., policies which emphasise financial inclusion for the informal sector

At whole of government level:

A demand-based A demand-based framework for framework for governance governance

• For training providers at the local level, compliance with the same QA prescriptions as those for national institutions offering national and sometimes international qualifications would result in them closing down.

• The answer may lie in a two-tiered system of training provider registration and qualifications

At the vocational training system level:

Informal sector Informal sector challenges in training challenges in training

deliverydelivery• Too often training design for the informal sector is characterized by the same rigidity and inflexibility as found in the formal system.

• It is designed around - - the availability of teachers & formal

training facilities- a ‘schooling model’ of program content,

sequencing, entry requirements, and delivery.

Challenges in training Challenges in training deliverydelivery

• It fails in its design to recognise trainees as adults

• It fails to recognise that trainees often bring with them a set of negative conceptions learned from past unsuccessful experiences in institutionalised education and training

• The teachers are rarely trained in adult learning approaches.

• There is rarely an appropriate means for recognising attainment

A demand-based A demand-based framework for informal framework for informal

sector training sector training • Participants are adult learners - they

come to training of their own volition, with special needs, and require a problem-solving approach.

• Training needs to be short-term, intensive, focused on the ‘problem’ they are trying to solve, with flexible delivery arrangements, and equitable, open access

A demand-based A demand-based framework for informal framework for informal

sector training sector training • It is often best delivered in an appropriate

workplace by relevant practitioners and is focused on the attainment of those competencies that they consider they want or need.

• It should be assessed against standards that are relevant to the workplace in which they will practise the skills

• Attainment must be recognised

Challenges for financing Challenges for financing training in the informal training in the informal

sectorsector• The inflexibility of government financial regulations

(financial delegations, approval and accountability provisions) result in -

- difficulty in being able to get money quickly and efficiently to the point of demand; &

- difficulty and reluctance to countenance direct cash transfers to the private sector and NGOs

• Sample text here • Sample text herea• Sample text here

Challenges for financing Challenges for financing trainingtraining

• Compounded by the lack of knowledge of government financial regulations by potential training providers; and,

• Generally poor levels of ‘financial literacy’ in the informal sector as a whole

• And yet ironically, with the exception of self-funded trainees, rarely do the financiers of informal sector training concern themselves with effectiveness audits

A demand-based A demand-based framework for financing framework for financing informal sector traininginformal sector training• Requires the money reach the intended

beneficiaries directly and quickly in response to clearly identified demand

• Requires effectiveness audits• Requires thinking ‘outside the box’ with

regard to formal/informal sector partnerships; payments for employment outcomes; putting a value on social cohesion

The challenge for The challenge for evaluating and assessing evaluating and assessing informal sector training informal sector training

• Assess it using a genuine practitioner of the skills being assessed and against meaningful standards relevant to the level of performance the trainee requires

• Evaluate its effectiveness against its contribution to employment outcomes and its capacity to facilitate transition to the formal vocational training system

• Recognise and record attainment

A demand-based A demand-based framework for evaluating framework for evaluating informal sector training informal sector training • Recognises that the majority of trainees

are usually driven by necessity and ultimately must be the final arbiters themselves of both the demand for the skills they wish to acquire and the effectiveness of their training. This contrasts starkly to the majority of their counterparts in formal vocational training

•

A demand-based A demand-based framework for evaluating framework for evaluating informal sector training informal sector training • Their requirement of government is

that a process is in place that can assess their performance against credible and relevant standards and can also provide them with a means for credible recognition of the skills they have acquired (at whatever level) within the broader community

An emerging gender An emerging gender challenge in the informal challenge in the informal

sectorsector• Rural to urban migration particularly from

within the informal sector poses immense challenges for government; but it also poses major challenges for participants and for women in particular

• A key role they have played in agricultural production will increasingly disappear

• Large numbers will need to acquire new skill sets through training

Special needs for female Special needs for female informal sector trainees informal sector trainees

• Increased flexibility in scheduling that recognises their diverse roles;

• Physical security;• Strong support and encouragement in

training & the workplace as they take on non-traditional skills; and

• Strong support and encouragement in the family and the community

The challenge requires The challenge requires ‘facilitating’ policy‘facilitating’ policy

• increased family and women’s support services in urban areas;

• adequate workplace inspection;• specific facilities for women in training

facilities and in workplaces;• broad-based advocacy to increase the

uptake by women of training and jobs in non-traditional areas;

• special subsidies or bonuses - to women to encourage them to participate and/or to training providers to enroll them;

• equal and fair remuneration for equal work;• improved policing of violent crimes against

women;• improved procedures for dealing with female

victims of violence; and,• drafting or strengthening of anti-discrimination

legislation

‘‘Facilitating’ policyFacilitating’ policy