The New Learning Advisory Report on Lifelong Learning in the Knowledge-based Economy - Netherlands

June 2002
This is an abstract of the SER advisory report

Source: Social and Economic Council (SER)

Foreword

1. Key points of the advisory report
2. Summary of the advisory report
   1. Introduction
   2. Structure of the summary
   3. Policy efforts
   4. Problems
   5. A new policy model in the making

Annex 1: Diagram of the Dutch public education system
Annex 2: List of acronyms and abbreviations used

Foreword

Lifelong learning makes a significant contribution to increasing labour productivity and improving the labour market participation rate. Training raises the overall quality of the labour force, prevents qualifications from becoming obsolete and helps job-seekers find a permanent job. In short, lifelong learning is a requirement for the knowledge-based economy.

Lifelong learning requires an open training market in which people are encouraged to work on maintaining and improving their employability. This idea is explored in detail in The New Learning, the Social and Economic Council’s advisory report on lifelong learning in the knowledge-based economy.

In the Council’s opinion, policy-makers should pay greater and more specific attention to lifelong learning than they have done in the foregoing Cabinet period. Major efforts should be made to improve the level of training of both employees and job-seekers on the lower end of the labour market. It is high time to draft and implement a forward- looking policy agenda. The advisory report provides the necessary building blocks for it.

This publication is an abbreviated version of the advisory report. Section 1 describes the key points of the advisory report. Section 2 is a summary of the report. Annex 1 provides a diagram of the public education system in the Netherlands. Annex 2 contains a list of the abbreviations and acronyms used in the report.

The original Dutch-language version of the advisory report can be found on the SER website.

J.M. Prakke
Head of Public Information Department

1. Key points of the advisory report

The Netherlands is rapidly transforming itself into a society in which sustainable economic growth depends to a large extent on the availability and development of knowledge. Sustained labour productivity growth and a higher labour participation rate are vital for this. The Netherlands aims to be one of the trend-setters in Europe, including in the area of lifelong learning.

The Netherlands’ performance in the field of training lags well behind that of other countries such as Sweden, the United Kingdom, Denmark and Finland. The Council has detected numerous problems that indicate that policy efforts intended to encourage lifelong learning too often go no further than good intentions and are frequently largely ineffectual. That is because the policies offer few incentives that appeal directly to people. Most of the measures concerned are aimed at employers, benefits agencies or municipalities. A change is required both in the policy itself and in the way people think: it is time for “the new learning”.

In the new learning, the focus is on the individual. The introduction of an individual learning account gives people the opportunity to shoulder responsibility for themselves and to make their own choices when it comes to improving their employability. The government assists by offering positive tax incentives. Employers put a sound personnel policy into place which includes personal development plans and career counselling.

The new learning is set in an open training market for post-initial education. Anyone who leaves a programme in initial education and enters the labour market must, in principle, seek his or her own way in this open training market for adults. This demand- driven policy model requires the public training institutions to work on developing their expertise in competition with private institutions. This means that public training institutions will also have to charge market rates and will no longer be subsidised by the government for providing training facilities. The training market will function more effectively by being demand-driven, and encourage the individual to take a proactive approach to learning.

The government will need to figure out the practical aspects of this model in collaboration with the social partners, training institutions, the social insurance benefits agency and the municipalities. For example, one agreement might be that persons will retain their right to take part in subsidised initial education provided that they do not break off their enrolment in such a programme for more than a year or two. The government should therefore develop standards indicating when individuals can deviate from the general pattern. Transitional measures are also necessary to ease the change- over to a demand-driven model.

Level 2 of senior secondary vocational education (mbo-2)¹ is regarded as a starting qualification in the labour market. Well over two million people in the Netherlands do not have such a qualification. For many of them, this is a serious impediment to finding a permanent job. The government must take systematic steps in the coming years to help this sizeable group of people overcome their disadvantages. The accreditation of prior learning is an important tool for these groups because it accords a certain status to the knowledge and skills that they have acquired in the field. The Council therefore urges the rapid development and application of this system. In the Council’s proposals, until an individual has gained a starting qualification he or she retains the right to participate in government-subsidised initial education.

2. Summary of the advisory report

2.1 Introduction

On 7 November 2001, the Social and Economic Council received a request for an opinion on lifelong learning by the Minister of Economic Affairs, acting on behalf of the Minister of Education, Culture and Science and the Minister of Social Affairs and Employment. The request focused on the possibility of encouraging lifelong learning among the members of the labour force who are either working or have the potential to work. The reason for selecting this particular subject had to do with the goal formulated by the European Council at its summit in Lisbon (23 and 24 March 2000): to make Europe the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. The efforts made by Dutch policy-makers to implement the Lisbon Agenda provide the context for the request for an opinion.

In the Cabinet’s view, an effective strategy is required to give employees and potential employees access to lifelong learning, as a means of ensuring that the Netherlands has a well-educated and highly employable labour force. The rapid pace of technological change makes it necessary to invest continuously in training in order to prevent knowledge and skills from becoming obsolete. There is furthermore a growing need to deviate from the usual sequence of learning and working and to combine working and learning. That is a further reason for the Cabinet to ask the Council to explore the possibility of creating an effective strategy for lifelong learning.

The Cabinet observes that the investment in training falls short of what is required. The Cabinet asks the Council to investigate specific incentives for investing in lifelong learning and the conditions under which such incentives will be effective.

The Cabinet indicates that many of the parties involved are already working on new instruments, with demand-driven financing and motivational techniques, individual responsibility and freedom of choice being important factors. The Cabinet asks the Council to explore how such initiatives will contribute to facilitating lifelong learning.

2.2 Structure of the summary

The advisory report focuses on the measures required to embed lifelong learning into society in the mid- to long-term. The present summary reviews the recommended policy (section 2.3), the practical problems encountered at present (section 2.4) and the main outlines of a new policy model (section 2.5)². The recommendations are primarily strategic and the Council asks the Cabinet to express its views on the new policy model.

2.3 Policy efforts

It is high time for policy-makers to make a solid investment in embedding lifelong learning in Dutch society. The Netherlands is rapidly transforming itself into a society in which sustainable economic growth depends to a large extent on the availability and development of knowledge. Sustained labour productivity growth and a higher labour participation rate are vital, especially when we consider such demographic trends as the ageing of the population. Making education and training a subject of ongoing concern will do much to help the Dutch Cabinet achieve the goals that it has set for itself within the context of the Lisbon Agenda. The Netherlands aims to be one of the trend-setters in Europe, including in the area of lifelong learning. Investing in lifelong learning can make a contribution to achieving this goal by

1. upgrading the labour force so as to better meet the requirements of the knowledge-based economy and cope with anticipated structural changes in the labour market,
2. maintaining human capital in order to prevent qualifications from becoming obsolete, and
3. encouraging the reintegration of the unemployed into the labour market.

The Council supports the goals the Cabinet has set for itself with respect to the Lisbon Agenda. Within that context, it considers that it will be necessary to emphasise that each individual employee is responsible for his or her own career. However, this does not absolve the other parties involved from their duty to create the proper underlying conditions.

2.4 Problems

The Netherlands is far from achieving the Lisbon goals as yet. In international terms, the Netherlands ranks no higher than average when it comes to post-initial education. The advisory report analyses numerous problems that indicate that policy-makers have made too little effort with respect to lifelong learning, and that their efforts are often largely ineffectual and tend to go no further than good intentions. The Council has observed problems in the participation rate, in the policy instruments themselves, in the quality of the education and training programmes offered and in the control, division of responsibility and financing.

Participation rate

In view of the need to upgrade the labour force, the Council sees the sizeable group of over two million persons who do not have a starting qualification (in other words, whose educational careers have taken them no further than level 2 of senior secondary vocational education³) as a huge problem.

What is particularly worrisome is that it is precisely low-skilled workers who are less inclined to enrol in training and they are often not encouraged to do so by their employer or the benefits agency.

When it comes to training intended to reintegrate the unemployed into the labour market, specific problems arise which differ from one group of persons to the next, for example women re-entering the workforce, partially occupationally disabled workers, new immigrants, refugees and benefits recipients. The Council urges the Cabinet to continue to keep close track of whether and to what extent the SUWI Act (Structure for the Administration of Work and Income Act, see below) is alleviating the problems that have arisen owing to the hesitant use of training as a tool for job-seekers. In a wider context, the Council argues in its Social and Economic Policy 2002-2006⁴ for a comprehensive system in which training is given an important place, in part in the form of work/study programmes.

The Council regards it as a problem that the training participation rate among certain high-risk groups, such as older and low-skilled workers (including many ethnic minorities), lags behind that of the rest of the Dutch population. Employers do encourage job-related training, but they are much less focused on encouraging employees to train for future positions. Training, even if it prepares the employee for work in other companies or sectors, can be desirable, for example for employees who are at risk of losing their job. Individual employees will have to become more aware that they are responsible for their own employability, now and in the future. The fact that both employers and employees are uncertain about what their investment in training will yield may be due to the fact that such investments are still all too rarely made.

To upgrade the quality of the labour force, however, we must look beyond the lower end of the labour market. Structural demographic trends are partly to blame for the persistent shortages of high-skilled workers in general and in specific occupational groups in particular. The Council is very concerned about the present scale of the labour shortages in education, which urgently require solutions.

Policy instruments

The Council regards the role of the peak employers associations and trade unions in the Labour Foundation (Stichting van de Arbeid) as highly significant. In recent years the social partners (trade unions and employers associations) have made a number of important recommendations aimed at modernising the set of instruments intended to encourage training. They support new initiatives that encourage employees to take more responsibility for their own development, such as the personal development plan. An individual learning account can be a useful tool in this context, and should be developed in more detail and tested. The Council therefore calls on employers and employees in companies and sectors to work on implementing the Labour Foundation’s recommendations.

The Council believes that the jobless are also not given enough encouragement to enrol in training programmes or to retrain. Initiatives are taken on a smaller scale for various groups, for example ethnic minorities or refugees, but the Council believes these groups merit much more attention. One obvious approach would be to use APL (accreditation of prior learning) to qualify refugees (who are often well-educated) granted permanent resident status in the Netherlands; this would give them the start they need to enrol in a custom-made programme leading to their reintegration into the labour market, with the training provided matching the level of competence of the person involved as closely as possible.

The Council observes that there are too few incentives encouraging individuals to take more responsibility for their own employability. The tax incentives for employers are effective and should be retained without alteration. In the Council’s opinion, the tax instruments can be made more effective by gearing them more to the individual.

The many ancillary measures that have been introduced are regarded by the Council as a clear indication that the policy-makers involved (the ministries, the social partners, educational institutions, benefits agencies, municipalities) are convinced of the usefulness of and need for lifelong learning in the practical sense. There appears to be a solid basis of support for encouraging lifelong learning “from the bottom up”. However, the many initiatives are as yet too fragmented. To introduce a measure of unity and to increase the effectiveness of such initiatives and encourage and co-ordinate the activities of the various parties involved, the Council would urge the development of a commonly supported strategic policy agenda.

It would be advisable to draft such an agenda in collaboration with all the parties involved, so that justice can be done to all the many facets of the subject and to the involvement of the many actors, each of which will also bear its own responsibilities.

The Council believes that there are both opportunities and risks inherent in the many policy initiatives that are still in an experimental phase. On the one hand, experiments offer interesting opportunities to increase the effectiveness of instruments and to eliminate undesirable effects as much as possible. On the other hand, there is the danger that initiatives will be swept from the table prematurely or will become bogged down in political decision-making, as is now threatening to happen with the individual learning account. The Council therefore advises improving the effectiveness of the various new policy initiatives and creating enough scope in the future for new experiments that address the practical aspects of lifelong learning.

A coherent and good quality range of programmes

The Council observes distinct problems with respect to the transparency and coherence of the complex of training programmes on offer. The training market could be made less fragmented and its quality improved if the institutions subsidised by the government became a more important party in that market. The transparency of the post-initial training market can be improved by a more market-oriented set-up. APL should furthermore be implemented as soon as possible. APL can be wide-ranging and assessment – meaning arrangements regarding coaching and scheduling – can be included in the procedure. The broad application of APL as a training activity should be facilitated by means of tax incentives.

To provide custom programmes based on APL, more use should be made of forms of individual accelerated training. The expense associated with this method means that it has scarcely made any inroads at the ROCs. Given the cost of lost wages, however, the short duration of a custom programme balances out the higher cost of training.

Control, division of responsibility and financing

To encourage the development of an open training market, it is important for that market to be more demand-driven and for private and public providers of post-initial education to compete with one another on a level playing field. It is necessary in that respect to clearly delineate between initial and post-initial education. The situation at present is rather unclear and ambigious. The market for post-initial education is largely ruled by private providers, although public providers also offer post-initial education at market rates. At the same time, however, these public providers can offer publicly financed education to adults. Therefore there is no level playing field between private and public organisations, since there is no clearly defined right on publicly financed education for adults.

2.5 A new policy model in the making

In order to cast more light on the issue of lifelong learning, the Council has chosen to look at a broader context than that referred to in the Cabinet’s request for an opinion, which focuses on the instruments involved . The Council has identified the important challenges facing us in the future, and links policy decisions to these challenges which are incorporated into a new policy model. The model assumes that the individual will be a more critical reference point for policy than is now the case, and that individuals will be encouraged to take more responsibility for their own employability. This will require the complex of courses and programmes to be more market-oriented. The training market will function more effectively by being demand-driven, and encourage the individual to take a proactive approach. Demand-driven financing in post-initial education can only be achieved if post-initial education is clearly defined. The Council therefore proposes a new delineation between initial and post-initial education. This proposal implies that the dividing line between initial and post-initial education is where the pupil/student leaves the initial phase and enters the labour market. The government will continue to take final responsibility for initial education. The Council sees initial education (regardless of the track) as running from primary education up to the receipt of an initial university (doctoraal) degree. Further study is required to determine precisely when the latter actually takes place.

The Council further believes that the Cabinet should retain full responsibility for initial education and the financing thereof. An open training market for post-initial education should be created alongside initial education in which public institutions, like private ones, are subject to market forces and therefore charge market rates for similar services.

The open training market will develop largely by demand. Anyone who leaves a programme in initial education and enters the labour market must seek his or her own way in the open training market. The government will assist by offering positive (tax) incentives. Employers will put a sound personnel policy into place which includes personal development plans and career counselling, with small companies receiving assistance from employability consultants.

The government will have to involve itself in the development of the post-initial market for at least three reasons:

• As long as an individual does not have a starting qualification at mbo-2 level, he or she has the right to enrol in an education programme subsidised by the government. Mbo-2 level is the minimum required to enter and remain in the labour market;
• In its role of employer, the government is an important client in the training market;
• In the public interest, the government can intervene if things do not proceed as planned, for example because of marketfailure.

These are the key elements of the new policy model that the Council proposes. The Council would ask the Cabinet to state its views on this model and proposes drafting a supplementary advisory report on the implications and modalities of the new system (including the transitional provisions and exceptions) whenever specific proposals are made to that effect in the Cabinet.

Annex 1: Diagram of the Dutch public education system

Within the public (state-subsidised) system, adult education is limited to courses set up to provide students with a solid foundation for vocational and secondary education and to enable adults to participate in society (social and life skills). The courses provide adult general secondary education, broad basic education and Dutch as a second language. There are also courses aimed at fostering self-reliance. This limited form of adult education is provided by the institutions for senior secondary vocational education (the Regional Training Centres, ROCs). In addition to the large number of private commercial training and education organisations, vocational training courses are also offered on a commercial basis by the public institutions, the ROCs, the institutions for higher professional education (hogescholen) and the universities, although their estimated market share is still small (about 12%).

Annex 2: List of acronyms and abbreviations used

• APL Accreditation of Prior Learning
• CWI Centre for Work and Income (Centrum voor Werk en Inkomen)
• mbo-2 Senior Secondary Vocational Education level 2 (basic vocational education)
• ROC Regional Training Centre (Regionaal Opleidingscentrum)
• RWI Council for Work and Income (Raad voor Werk en Inkomen)
• SER Social and Economic Council (Sociaal-Economische Raad)
• SUWI Structure for the Administration of Work and Income Act (Wet Structuur uitvoering werk en inkomen)
• UWV Employed Persons’ Insurance Administration Agency (Uitvoeringsinstituut Werknemersverzekeringen)

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