Governance of Labor Market and Skills Intelligence as Driver of VET Reform

Abstract

Blending the worlds of education and of work via continued reform of EU vocational education and training (VET) systems has become a key priority of EU policies, especially in the aftermath of the 2008 global crisis. But the objective of strengthening feedback loops between VET and the labor market, most notably via adaptive information systems based on robust labor market skills intelligence (LMSI), is intrinsically dependent on putting in place an appropriate governance infrastructure. Effective skills governance should facilitate stakeholder interaction and promote policy implementation and system learning. This chapter discusses the root of coordination failures, including asymmetric information, externalities, and strategic complementarities in information acquisition that impedes skills governance at both agent and policy levels. It proposes a novel skills governance framework that can be used by policymakers in diverse countries to identify “foundations” of well-functioning labor market information systems. Understanding how skills governance systems in countries are structured, interactions between different parts of the system, and the underlying behavior and motives of social actors is an essential prerequisite for ensuring that well-informed, labor market-relevant, VET reforms can be implemented.