Español   |   Français

Blog: Building links between enterprises and training organisations

Lack of adequate skills is often one of the most challenging obstacles in the labour markets of developing countries. Particular challenges arise when developing countries seek to shift from agriculture to manufacturing without a solid skills base. The type of skills required changes with structural transformation. When a low-income economy undergoes the process of structural change, moving from a primarily agrarian-based economy to one dominated by industry, a new set of skills is defined. Manufacturing requires skills that were not needed in agriculture.

Ethiopia is an example of this. The country has experienced a decade of high and sustained economic growth at around ten percent and is putting a specific focus on transforming the structure of its economy from being a primarily agrarian-based economy to becoming one dominated by industry. The changes have led to increased demand for skilled labor. The government of Ethiopia therefore increased the number of TVET institutions from 505 to 919 between 2011 and 2015. In 2015, more than 350,000 students were enrolled in TVET courses and the number of students is increasing every year. This rapid expansion of the system has increased the supply of skilled labor. At the same time, the economic changes have meant that new skills are demanded. To keep up colleges are hiring new teachers every year; many of whom are hired directly as graduates from TVET colleges or universities and therefore without longer practical experiences gained in a company.

What Ethiopia is experiencing often happens as low-income economies develop. A gap has developed between the training provided by the public institutions (supply) and the skills that are needed (demand). Due to a lack of proper participation of the business sector in creating standards for vocational training, the standards often do not match with the tasks and required skills expected for the companies’ workplace. As a result, TVET Colleges develop curricula and train TVET students not in full accordance with the required job demands and reality on the ground.

The government together with the business sector needs to focus on diminishing the gap between supply and demand of skilled labor. Policy-makers seeking to design skills policies face challenges that are specific to the country context. For them to fully understand the nature of the context and the skills needed, policy-makers need to engage with companies. Guiding principles based on good practices shed light on the factors that play a role in successful skills development policies. But the supply-demand mismatch for skills is also associated with the inability of the business sector to communicate the skills that are needed and, most importantly, the unwillingness to become directly involved in the creation of skills through training schemes. Firms complain about the lack of a qualified workforce, particularly as they move up the technology ladder.

To read the rest of this article, please click on the PDF below.


Other international organizations



Knowledge Products

Advocacy and information materials

Sub Knowledge Products

Promotional material


Training quality and relevance
Participation of social partners

Sub Issues

Employer organizations

Subject Tags

TVET systems
public sector

Publication Date



Tezera, Dejene. Division Chief, Department of Agribusiness Development, United Nations Industrial Development Organization.
Your comments
This discussion feature works best when accessed from the following browsers: Chrome or Firefox.
Please read our Community Guidelines .

Sign up to receive our newsletter