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Knowledge in Action - Steve Maharey Speech

16 May 2002 Hon Steve Maharey Speech Notes

Knowledge in Action

Building the information base for making effective investments in skills

Address to the Competenz AGM. EMEX Trade Show, Auckland Showgrounds.

Introduction

Thank you for the invitation to join with you at your Annual General meeting.

I have a number of things I want to discuss with you today. They take the form of some messages, and some announcements.

The first, by way of a message to all of you, is “well done’. You had a very good year last year with a 13% increase in trainee numbers, and qualification completions up by 26%. You are one the country’s leading ITOs and the Government very much appreciates the leadership that you are giving, both within the industry sectors that you cover, and within the vocational education and training community more generally.

The second message is, “we have only just finished the warm-up; the whistle for the start of play proper is about to go ...’ . Continuing with the sporting metaphor what I am saying is that we always need to be looking to lift our game.

I know that your Chairman is an Otago Highlanders supporter, and, at the risk of offending him, I want to suggest that ITOs should be to industry training, what the Canterbury Crusaders were to the game of rugby on Saturday night - setting the standard higher and higher.

Industry training

Industry training or vocational education and training is part of the post-compulsory education and training system. In short, it is part of what I refer to as “tertiary education’. I know that the term still conjures up visions of ivory towers, and of institutional learning for the few. I want to change the popular meaning of that term to also encompass everything that you do.

People in universities are trained, and there is an important educational dimension to what you do, so we should move away from a simple distinction between education and training. And we should move away from the idea, or the presumption that education happens in an institution, and training happens on the job - I am very keen to see the workplace increasingly referred to as a place of learning - as indeed it always has been.

New Zealand requires a tertiary education and training system that supports the realisation of the Government’s broader vision for the nation’s economic and social development, and environmental sustainability.

Our tertiary education system has many strengths, not the least of which is the dedication of those who are at the sharp end of teaching, training and research. We have much to be proud of in the investment that is being made, whether by employers through on the job education and learning, or providers lifting the foundation skills of those at risk of long-term unemployment, or by universities that are networking with research institutes and the business sector to realise the growth potential of pure and applied research.

But while there are strengths, there are also weaknesses. The tertiary sector lacks a clear strategic direction, it is fragmented - and you better than most have a sense of the problems of alignment as between what happens through ITO purchased training and the vocational education and training that is provided through Polytechnics - and there is inadequate cooperation and collaboration across the sector.

The Tertiary Education Strategy and industry training initiative

On Tuesday I released the Government’s Tertiary Education Strategy - a Strategy that will drive the transformation of our tertiary education system towards being both more strategically focused, and more connected - particularly with the business sector - and collaborative.

A strategy is only as good as the policy and programme drivers that deliver the required outcomes. The TES will have those drivers and levers, including a significantly reshaped funding system for tuition and research. More detailed announcements will be made next week as part of the Government’s Budget 2002 decisions.

The building of a skilled and adaptable workforce to meet the demands of a high wage, knowledge based economy has been a central feature of the Government’s programme from our first days in office.

Modern Apprenticeships involved 2,000 young people at the end of last year. And we will hit our target of 3000 Modern Apprentices by June. Looking ahead we have budgeted $51 million for Modern Apprentices over the next four years. I must emphasise that I am talking here about funding decisions made in our first two Budgets, and I will say no more at this point ¡K

The Industry Training Fund has increased by $8 million to $78 million this financial year and will increase a further $8 million in 2002/2003 (making a total of just over $86.7 million). This will enable more New Zealanders than ever before to participate in formal structured workplace training. During 2001, more than 95,000 people participated in training purchased through the Industry Training Fund.

I might add parenthetically, and somewhat politically that when we came into office I inherited a situation where the Industry Training Fund appropriation stood at $60 million. It had been higher, but on 28 July 1999 the previous government cut the Industry Training Fund by $4.7 million to fund something referred to as the “5 Steps Ahead’ initiatives - it is not clear to me how cutting funding to industry training is a step ahead to anything.

Government decisions arising out of a comprehensive review of Industry Training will lift the volumes, quality and responsiveness of industry training, and encourage higher rates of completion. Industry Training Organisations will be required to take a leadership role in identifying, and responding to, training needs. And this enhanced role is formalised in the Tertiary Education Reform Bill presently before the House. I want to return to the matter of the future role of ITOs as key actors in assessing future skill needs in a moment.

A New Technology Fund of a $1 million dollars has been established through the Industry Training Fund to increase employees’ access to industry training through the use of new technology such as computer based training.

Gateway, a new programme to improve the transition from secondary school into the workforce, currently involves 722 students from 24 schools. Employers are showing strong interest in providing systematic workplace training for school students. Gateway is also helping strengthen links between Industry Training Organisations and schools.

Supporting the Skills Information Action Plan

I want to now turn to two announcements - one a Budget 2002 announcement, and the other an announcement of an initiative of your own.

Firstly to the Budget announcement.

I mentioned earlier the new role that ITOs will have in assessing and responding to skill and training needs.

The new provision that is presently before the Parliament amends the Industry Training Act by adding the following to the statutory role of ITOS:

“provide leadership within the industry on matters relating to skill and training needs by -

(i) identifying current and future skill needs; and

(ii) developing strategic training plans to assist the industry to meet those needs; and

(iii) promoting training that will meet those needs to employers and employees”

This change to the role of ITOs is one element in the Government’s Skills Information Action Plan. Today I want to take the opportunity to announce what the Government will be doing to support ITOs in that new role through some of the other elements of the Action Plan.

The Skills Information Action plan is a wide-ranging package aimed at improving employment outcomes and economic transformation by making available better information about the labour market, with special emphasis on the supply and demand for skills.

Initiatives in Budget 2002

Today I am announcing five new initiatives to enhance the government’s Skills Information Action Plan:

„P an integrated website (“portal”) that creates a one-stop shop for job-seekers, employers and others interested in information about New Zealand’s labour market

„P a six-monthly Skills Report, written in plain English, that summarises existing information on the supply and demand for skills, including areas of actual or forecast shortage

„P integrating data on employees and their jobs, to better understand the processes of job creation, job retention and skill development

„P a new survey on job vacancies that will improve knowledge of the demand for skills

„P designing a survey on the employment and earnings outcomes for tertiary graduates.

Over the next four years $11.6 million will be spent on these five new initiatives, which will contribute significantly to the Skills Information Action Plan’s two objectives. The two objectives are:

- to speed up the matching of people’s skills to the job opportunities that are currently available The goal here is to help New Zealand employees improve their ability to find the industries, regions and employers that require their skills, and to help employers find the right employees (whether domestically or by tapping the global labour pool), and

- to reduce skill shortages in the future by helping people make to better decisions about education and training . The goal here is to enable New Zealanders to choose the education and training that is most likely to lead to job opportunities, and to assist education and training providers to better anticipate the areas of study and courses that will be in demand in the future.

Let me say something about each of these initiatives in turn.

1. An Electronic “Labour Market Information Portal”

A Labour Market Information Portal, with the working title www.work.govt.nz, will provide seamless access to labour market information from a single website, eliminating the need to visit multiple websites or click through layers of links.

The website will assist people to more quickly identify and acquire skills, and more readily find new work -- leading to faster and better matching of available skills to current demand and less potential for future skill mismatches. The portal will meet the needs of a wide range of people: employees, school leavers, the unemployed, potential immigrants, employers, government, and industry groups.

The portal will provide a “shopping mall” offering “everything you want to know about the New Zealand labour market” -- jobs, careers, training, migration, volunteering, self-employment, employer and employee rights and obligations, and forms of assistance available -- whether the information is from the public or the private sector.

The portal will bring together, for example:

„P information and research held by the Department of Labour;

„P KiwiCareers information from the Career Services website;

„P the Job Bank and Talent Bank of Work and Income New Zealand; and

„P other sources of information on immigration, voluntary work, digital opportunities, community businesses, health and safety, ACC, childcare, employment regulations, taxation, the transition to retirement, and income support.

This Portal is a major undertaking that will contribute significantly to the e-Government strategy.

A web front linking existing websites will be in place by Septembers this year, with development into a true “portal’ over time.

2. A Skills Report

A user-friendly six-monthly Skills Report will complement the Labour Market Information Portal, providing an alternative way to access current and new information.

It will contain in plain English information to inform decisions on job seeking or changing (for employees), what to study (for students), firms’ human-resource strategies (for employers) and what courses to offer (for training providers). These reports will be available, six monthly from November this year.

3. Development of a graduate employment outcomes survey

The Department of Labour will design a survey of the employment and earning outcomes achieved by tertiary graduates. If the project proceeds on a continuing basis, two groups will benefit:

- students and intending students will have better information on the likely employment prospects and earnings that follow any particular course of study. Students will be more likely to undertake study in areas where skills are in demand.

- tertiary institutions will be better able to respond to labour market needs, and there will also be improved information for those who review the performance of tertiary institutions.

These two factors will support the transition to a highly skilled, innovative economy.

Work on the design of the survey is to start immediately.

4. A Vacancy survey

A new national survey will be put in place to improve quantitative information on current skill shortages by surveying employers.

This initiative will fill a major gap in knowledge about the demand for skills by establishing a robust data of employer vacancies, recruitment difficulties and, if possible, labour turnover. This information will:

- enable firms to adapt their human-resource strategies;

- speed the matching of available skills to areas in higher demand;

- improve students’ decisions about their investment in education and training, thereby reducing the likelihood of skill shortages; and

- inform the Tertiary Education Commission planning decisions and its review of the performance of the tertiary sector.

The survey will benefit firms, industry organisations, students, job-seekers or job-changers (including potential migrants), training providers, training purchasers and funders, and those reviewing provider or institutional performance.

The Skilled Vacancy Survey supports the Government’s education priorities by improving decision-making on what courses to take, offer and fund.

Development, design, pre-testing and consultation with potential data users will occur in first year. The survey will be piloted in year 2, and data will start to become available then. The first full year’s data will be gathered in year 3.

5. Understanding the dynamic interactions between employees and firms

Data about employees and their jobs will be integrated in order to examine questions that currently cannot be answered without increasing compliance costs on firms.

These questions include:

- What types of firms create jobs?

- What types of job placements result in the best long-term employment outcomes?

- What types of firms make the most contribution to individuals acquiring skills?

The integrated dataset will provide new insights into how the economy functions, and thereby help to improve policies that support growth, innovation and employment. Integrated data will also support the Government’s education priorities through better information on how skills develop during an individual’s working life, and the role that firms play in this.

Ultimately these improvements will benefit job-seekers (beneficiaries and non-beneficiaries), people who are disadvantaged in the labour market, students, employers, employees, the self-employed, and training providers.

It is anticipated that we have a fully integrated data set developed by 2006, with intermediate research outputs generated in the meantime.

This Government is serious about ensuring that we get the matching right between skill and labour force needs and what happens in response to those needs before they turn into constraints on growth and innovation.

That means ensuring that we have the information that will inform the decisions of learners about what to learn; that will inform the decisions of the Tertiary Education Commission, of ITOs and of education and training providers what needs to be taught (and how and when and where), and that will inform the decisions of employers about their own training investments.

Knowledge in Action Award

I said I had one further announcement on behalf of Competenz - and let me say that I feel honoured that Competenz has asked me to make this announcement today.

I am pleased to announce the introduction of a new award - the Knowledge in Action Award, which will be awarded to a member company of Competenz, and which will recognise a significant improvement in the winner’s business due to their involvement in industry training.

I congratulate Competenz on the development of this award, and I hope that you will do me the honour of inviting me to the first presentation ceremony. This is a great initiative, and it is a good way to bring my comments to a close.

Thank you again for the contribution that you are making to the growing of an innovative New Zealand. The Government stands ready to work with and alongside you.

Ends


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