Top in Tech: Wrong leadership structure cripples Malaysia’s TVET

• TVET would strongly benefit from being industry-led, not by bureaucrats
• Crafted by industry, curriculum would be more relevant, costs cut by half

"RM6 billion (US$1.5 billion) is a lot of money; but at the end of the day do we get the results we want?” asked Callum Chen, President of the Malaysian Consortium of Mid-Tier Companies.

"The answer is no."

Chen was talking at a panel aptly titled "Budget 2021: 6 billion reasons to disrupt TVET" as part of the Tech Talk series jointly organised by Digital News Asia and MalaysiaKini. The 6 billion is in reference to the RM6 billion budget allocated by the Malaysian government toward TVET education in 2021.

Much of the discussion was about what the government can do to improve the situation for Technical and Vocational Education Training (TVET) institutions in Malaysia. The answer it seems, is that the government should stop doing it by itself, and get industry, not just much more involved, but actually leading TVET efforts. This will ensure the graduates are desired by employers.

The panel did acknowledge that policy makers in Malaysia recognise the importance of a technically competent blue-collar workforce.

"The government's aspiration is to expand skill-based, technology-driven and high-impact sectors, with the objective of producing high-paying jobs," observed Jeffrey Tan, ACCCIM Deputy Chairman of Human Resources Committee. "The government's stated intention is to move away from cheap labour-intensive and low-value manufacturing activities, which also reduces the reliance on foreign labour."

ACCCIM stands for the Associated Chinese Chambers of Commerce and Industry of Malaysia, the leading industry group in Malaysia.

Tan used the fact that developed nations have a 40% skill-based workforce, in comparison to Malaysia's figure of only 25%. "We have still a long way to go."

Chen meanwhile noted that mid-tier companies (which his association represents) will benefit from having skilled workers to drive them up the value chain. While mid-tier companies only represent 1.7% of all companies in Malaysia, they have an outsized impact on the economy, employing 17% of the workforce and contributing 39.9% to GDP. Increasing the proportion of skilled workers will only drive that number even higher.

"Don't blame us if these so-called graduates are not employed"

"Too many cooks spoil broth" was the comment made when the panel were asked to comment on the fact that TVETs in Malaysia are under the aegis of seven different Ministries. To make matters worse, industry associations are not involved in the decision-making.

"You don't involve the people who understand what they want, what they need, and the kind of trainees who are supposed to graduate and work in a factory," said Chen, clearly frustrated with the situation.

This result is as expected. Tan said they find a mismatch between the skills graduates have, and what is required by industry. "Frankly (speaking), much of the syllabus is very archaic, things that are 10, 15, 20 years old," he claims.

"Don't blame us if these so-called graduates are not employed," interjected Chen.

Another issue, and this is long standing, is that the best students - and their parents - do not see TVET as an education opportunity. Although the government tries to encourage students to go into TVET, only about 10%-15% of secondary school graduates make that decision.

"There's a misperception that TVET education is for students who don't have good grades, who are mischievous students that have no future, which is totally wrong," declared Tan. In fact, the options for a student span a wide range of interests and abilities, from welding to aeronautical engineering to robotics.

"This is something that we need to address to close the gap," said Tan.

Germany: Half the cost, more than twice the graduates

Daniel Bernbeck, CEO and board member of the Malaysian-German Chamber of Commerce and Industry (MGCCI), had his own opinion about the RM6 billion budget passed by the parliament.

"It's not about the amount of money that you spend, it's the way you spend it," he said.

Bernbeck looked at the data and has come to the conclusion that Germany's TVET model is more cost-effective than Malaysia's. "We pay only half the amount of money compared to the national budget into the vocational training, but we train 500,000 apprentices every year; Malaysia only trains around 200,000."

This stark and sobering contrast paints a chilling reality to the policy-makers and bureacrats involved in Malaysia’s TVET structure.

Bernbeck credits the strong role that the private sector plays in this success. In Germany, it is the industry that runs the TVET programme, and they bear most of the responsibility for the training. Students receive 75% of their training in the company’s workshop, while the remaining 25% of learning (mostly theoretical) is undertaken by TVET institutions.

The certifying body is the chambers of industry and commerce for industrial jobs and technical education, and plays a neutral role in certification, as well as monitoring the training for quality assurance.

"It is a private sector execution and enterprise. It is not a public sector activity, and this is completely different to the Malaysian setup," he observes.

The advantage is that what the students learn is completely relevant to the job they have to do for the company (it is literally the work they do). "They are trained on the machine, on the job that he or she is supposed to be doing. There is no gap, there is no upskilling later."

"In Malaysia, it's 'train and place'. This is the exact opposite of what we do in our system, where people are (first) placed in industry, and then (only) they are trained."

On top of that, the apprentices also get a small allowance. "They are being paid while they are trained, they don't have to pay to be trained."

Some local success with MPMA showing the way

Can the German model be implemented in Malaysia? In fact, on a small scale something akin to it already has been done. The Malaysian Department of Skills Development (JPK) has an initiative called the National Dual Training System (SLDN), where the company takes on 70%-80% of hands-on training, while the training center takes on the remaining 20%-30% of theory.  Companies that participate can use HRDF funds for this training, and also qualify for income tax deductions.

However, out of the RM6 billion allocated under the 2021 Budget, only RM60 million is reserved for SLDN, for the benefit of 10,000 students.

On top of that, Bernbeck also pointed to the German-Malaysian Institute (GMI) in Kajang, and the Penang Skills Development Centre (PSDC) as examples of industry-led initiatives in Malaysia.

Arguably the best example comes from two talent development programmes the Malaysian Plastics Manufacturers Association (MPMA) ran in 2012 and 2017. With RM3 million funding from the EPU for each programme, the MPMA overachieved both times.

The 2012 programme was budgeted to train 220 technicians and engineers to a new level of innovation and capabilities, but the MPMA was able to 348 trained executives with 18 trainers as well. For the 2017 programme, 100 staff from four MPMA members, with Chen’s company, LH Plus being one of them, received world class training from overseas trainers.

“These are examples when industry takes the lead in upskilling its talent,” says Chen, a past president of the MPMA. “Give us RM60 million and we will work wonders!” he urges of the government. There would not be a need to invest RM6 billion into the national TVET structure.

Naturally, the panelists would like to see similar schemes much more widespread in Malaysia, given its effectiveness elsewhere in the world.

"For instance, in China we have thousands of apprentices under the German dual vocational-training model, because they have understood that their old traditional system did not allow them to leapfrog into the 21st century," said Bernbeck

"It's important that the government needs to hand this over to the private sector to steer it," emphasised Tan, suggesting that the government sets up a TVET commission to administer, coordinate and streamline all TVET courses in the country.

Bernbeck stressed that it's important for Malaysia to develop its own version of the scheme. "No country has ever just simply replaced their existing model with the German model," he said.

"It's not a plug-and-play thing, it's a transition into a more demand-driven industry-driven innovative model," he continued.

However, to him the benefits at the end of the day are abundantly clear. "This is very cheap compared to the existing model. Malaysia would save a lot of money on the national budget of RM6 billion for TVET,” he ventures.

"I think 60 percent of that amount can be saved.” Is Putrajaya listening though?