Sectoral Perspectives on the Benefits of Vocational Education and Training. Research Paper No. 22

The report confirms the importance of training for the European Union (EU) industrial policy. It demonstrates that sectors where training is firmly integrated in human resource practices have higher productivity gains. Such economic benefits are not only realised through developing workers' skills, but also thanks to higher job satisfaction and increased individual commitment to the organisation. This report also contains evidence of spillover effects among workplaces within a sector in industrial clusters. These clusters usually develop around high value-added activities, which require firms to attract and retain a highly qualified workforce. To do so, firms have to adopt advanced human resource practices. They also have to cooperate and pool resources to satisfy skills development needs, whenever individual firms are not be able to sustain the necessary high training level. It appears that such joint training efforts decreases the negative impact and likelihood of losing trained workers to other firms. The case studies collected in this report also show that public investment in training--catering the specific needs of these high value-added firms--can be very effective in inducing firms and stakeholders to work together, generating high spillover effects across entire industrial clusters. The evidence collected here by Cedefop argues for integrating vocational education and training (VET) in regional and sectoral growth strategies. VET institutions may then act as a catalyst for the further development of industrial clusters. Smart growth in Europe would directly benefit from such integrated economic policies. (Contains 35 tables, 25 figures and 43 footnotes.)