THOUGHT LEADER : Why isn’t education working?

Education for work – vocational and tertiary education – is vitally important to New Zealand’s economy, but it is less successful than it should be.
Despite huge investment of taxpayer dollars, the outcomes from polytechnics, universities and other tertiary education organisations have been criticised. And large proportion of New Zealand workers have no qualifications at all.
Low completion rates are one problem, with as many as 40 percent of all students in tertiary education failing to finish their course or qualification.
Then there is the issue of whether many of those courses and qualifications are even relevant. The issue is raised every time Business NZ surveys its members, with many businesses saying they find it hard to get workers with the right skills.
This may seem hard to believe – after all, New Zealand is well provided with universities and polytechnics. There seems to be no reason why any young person couldn’t get the right skills to get good job.
Another problem is low skills. You may also find it hard to believe, but more than one million people already in the New Zealand workforce have what’s called “low functional literacy and numeracy”. That’s huge number of people without the basic reading, writing and simple arithmetic skills to perform effectively in the workplace.
All these have big implications for our ability to achieve highly productive economy now and in the future.
Obviously we have problem: low skills, not enough skills and not the right skills. What’s going on?
First, the low completion rate, where students are not completing the course or qualification they were enrolled in, appears to be at least partly linked to lack of incentives for quality teaching.
Tertiary bodies get funding based on performance for their research function, in the form of the Performance Based Research Fund, but there is no equivalent funding incentive for high-quality teaching.
This might begin to pick up, as the Government has said it plans to introduce some performance-based funding for teaching from 2012.
Funding will be linked to measures like successful course completion, qualification completion and progression to further study. After 2012, organisations that are not performing will run the risk of losing funding – this kind of signal is well overdue and is also likely to lead to healthy competition between organisations, which should lift everyone’s game.
However it won’t fix the problem of students graduating with the wrong skills – without the skills needed by employers.
This could be improved if tertiary organisations were more engaged with employers, so that information on the skills workers need can be used to design and deliver courses, and if funding was better aligned to skill needs.
Some tertiary organisations have good links with business and are offering courses that are relevant to enterprise, but some have some way to go. Business NZ contributes to the course design of number of tertiary institutions and would be happy to work with more.
The problem of low skills needs special attention. One million or more employees with low functional skills will make it difficult for New Zealand to achieve high productivity, key factor in today’s competitive global economy.
More evidence of this problem abounds among 20- to 40-year-olds in the New Zealand workforce – 250,000 or more have less than level-one NCEA-equivalent qualification. These people will be in the workforce for 20 years or more, so we need training for them now to get better skills for the coming years.
Some good work is being done with the Workplace Literacy Fund, which subsidises literacy, language and numeracy training, in partnership with number of major employers such as Spotless and Downer EDI. However, funding for the future of this programme is uncertain. We need more certainty so employers can get involved in raising skill levels in their workplaces.

What do employers want?
As well as technical skills specific to the workplace, employers want strong literacy, language and numeracy skills, and skills connected with problem solving, critical thinking, teamwork and the ability to keep on learning.
Getting these skills and raising successful course and qualification rates are not ends in themselves, of course, but they will make New Zealand more competitive in the world and boost its economic development.
A skilled workforce is precondition for productivity, employment and economic growth.
Getting this crucial sector right will make big difference for the wellbeing of us all. M

Phil O’Reilly is chief executive of Business NZ,

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