Restructuring Technical and Vocational Training in the Kingdom of Saudi Arabia(PPP Initiative)

By: Saleh Alamr, Vice Governor for Planning and Development

The Kingdom of Saudi Arabia

• Land Area: 2,000,000 sq km

• Total Population: 27,136,9778,429,401 foreign workers

• Population Growth: 2.21%

• Life Expectancy: 74 years

Larges Expansion Plan in TVET

• 50 Colleges of Technology (Male)• 50 Higher Institutes of Technology

(Female)• 162 Industrial Secondary Institutes• 4 Trainers Training Colleges

PPP Initative: The overall project consists of 3 main phases – second phase has just been completed and third is about to start

Activities

▪ Develop analytic understanding of job demand and supply in the Kingdom

▪ Understand setup and sizing of higher education sector (university vs TVET)

▪ Deep dive on TVET and benchmark performance, provision and system setup

▪ Develop/refine TVET strategy going forward

▪ Perform “due-diligence” on existing vocational training institutions (financials and outcomes) to refine performance understanding

▪ Test and refine strategic initiatives developed in first phase with international market participants: training providers, regulators and employers

▪ Refine and detail recommendations from phase 1 based on market testing outcomes

▪ Put enablers in place to implement strategy

▪ Start implementation of recommendations

Diagnostic and Strategy Market Testing Implementation

1 2 3

Today

July 2011 December 2011 May 2012

Key recommendation of phase 1 was to massively scale up the size of vocational training in the Kingdom…

100

456

36

420259

71

188176

7898

11010

TVTCPartnerships

28

144

9

13586

25

6158

2533

313

15.1

1.4

13.78.6

2.5

6.17.3

2.84.5

4.9

3.51.4

2011 2013 2015 2020

StudentsThousand

GraduatesThousand

Budget SAR billion

ESTIMATES

…and improve its quality further through 4 main initiatives. However, several issues open at the end of phase 1

Focus areas

1 Scale up public-private partnerships

2 TVTC transformation

3 Establishing short work-readiness programs

Regulatory setup

Key recommendations

▪ Expand involvement of international and private sector vocational and technical education providers

▪ Ensure employer involvement in the design of vocational education programs, either through employer-lead model or with provider-lead model

▪ Be very specific on framework and operating model to facilitate tendering process

▪ Align TVTC colleges with expanded PPP model

▪ Launch programs to provide short work-readiness training to the currently unemployed, possibly using employer-lead voucher model

▪ Center should reduce its role to regulation, funding, information provision, policy coordination

4

Key open issues

▪ How should new PPP model look like to ensure high performance but also keep costs under control?

▪ How to ensure a consistent high-quality system across all colleges?

▪ How to align efforts of HRDF with future vocational activity?

▪ How would new regulatory setup look like?

In the market testing phase we involved we set out to refine our answers and address open issues with lots of external input

Interviews conducted since December, 2011Expert interviews▪ Engaged inter-

national experts to define key questions to be solved for PPP and regulatory model

International visits▪ Tested PPP and

regulatory model with providers and regulators

▪ Gauged institutions’ interest in supporting reform implementation in KSA

Local benchmarking▪ Tested PPP and

regulatory model with employers and existing providers in KSA

Detailed due diligence on TVTC performance

Benchmarking effort

Australia▪ 3 education providers▪ 1 association of colleges▪ Government regulator

UK▪ 5 education providers▪ 2 awarding bodies▪ 1 industry body▪ 1 regulator

Brazil▪ 1 education

provider

Germany▪ 3 education providers▪ Ministry of Labor▪ 2 research and advisory

organizations

Philippines▪ Government

regulator and manager

▪ 2 education providers

KSA▪ 5+ non-

government colleges

▪ Many employers

US▪ 6 education

providers▪ 2 accreditors▪ 1 association

of colleges

Canada ▪ 5 education

providers▪ 1 accreditor▪ 1 association

of colleges

Newly developed PPP model addresses these issues and received strong, positive feedback from providers abroad

▪ Provider-led model, employer representation incl. through subject matter experts

▪ Provider developing curricula (with employer-input), screening and selecting students, providing training materials, administering institute and internal quality assurance

▪ Curricula development based on new Occupational Standards developed with employer input: Differentiated requirements and clarity on required graduate output quality

▪ Providers “bidding” for new capacity (build but empty or upcoming) on a per-student funding basis, ~15% of funding performance based (graduation, long-term employment), incentives for employer sponsorships and government “offtake” agreements (limited in time)

▪ Modular course structure – effective integration of short courses and regular TVET programs

▪ Government provision of infrastructure, loans for equipment and process support

▪ Provider-led model, employer representation incl. through subject matter experts

▪ Provider developing curricula (with employer-input), screening and selecting students, providing training materials, administering institute and internal quality assurance

▪ Curricula development based on new Occupational Standards developed with employer input: Differentiated requirements and clarity on required graduate output quality

▪ Providers “bidding” for new capacity (build but empty or upcoming) on a per-student funding basis, ~15% of funding performance based (graduation, long-term employment), incentives for employer sponsorships and government “offtake” agreements (limited in time)

▪ Modular course structure – effective integration of short courses and regular TVET programs

▪ Government provision of infrastructure, loans for equipment and process support

Model Highlights

Further enablers need to be put in place to finalize PPP model

SOURCE: Team

1. Develop detailed TVTC capacity forecasts (by region/program) to match need capacity with market needs (rough estimate for first batch of PPP colleges already existing)

2. Start development of new NOSS to understand skill requirements per job and capture further benefits (create transparency, promote mobility and allow national skills testing)

3. Conduct full cost-benefit analysis of vocational programs to complement “demand view” for new programs with view on macro-impact

4. Continuous refinement of data accuracy on performance

5. Communication campaign for new model

6. Potentially other refinements, e.g., voucher scheme to give employers and students “voting power”

1. Develop detailed TVTC capacity forecasts (by region/program) to match need capacity with market needs (rough estimate for first batch of PPP colleges already existing)

2. Start development of new NOSS to understand skill requirements per job and capture further benefits (create transparency, promote mobility and allow national skills testing)

3. Conduct full cost-benefit analysis of vocational programs to complement “demand view” for new programs with view on macro-impact

4. Continuous refinement of data accuracy on performance

5. Communication campaign for new model

6. Potentially other refinements, e.g., voucher scheme to give employers and students “voting power”

Providers will be selected through a rigorous RfP evaluation process…

1 In full-time equivalents

ProposalsProposals ~20-30

~ 10-20

~30-50

ProcessProcess▪ Pre-qualification

based on:– Accreditation– Students/staff1

– International experience

– Programs– Finance and

performance

▪ Three steps process:– Individual

discussions– Site visits to

providers– High-level

business plans▪ TVTC provides

feedback and asks questions

Finalcontracts

▪ Creation of a long list of potential providers based on– Benchmarkin

g trips– Additional

references from umbrella organizations

▪ Site visits to KSA colleges

▪ Providers develop final detailed business plan

▪ Providers bid for colleges (binding)

Long list creation

Round 1: pre-qualification

Round 2: high-level business plan

Round 3: final bid

Need to involve regional/low-cost providers in RfP process to ensure cost-efficiency – especially for “standard” programs

Quality assurance model will be central for institutional and student level but left to market mechanisms for programs

Institutional levelInstitutional level

Final recommendation Rationale based on market feedback

▪ A single accreditor to ensure quality of all training providers, ideally in-house with external support to set it up (could also be outsourced)

▪ Consistent standards

▪ Organization operates at scale in KSA, with resources to inspect many colleges

▪ Standards can be customized to KSA

Program levelProgram level

▪ International programmatic accreditation strictly voluntary1

▪ Least intervention in the market

▪ Program accreditation redundant if national student testing is in place

Student levelStudent level

▪ National testing of all graduates in order to receive degree

▪ Existing teachers can be leveraged to run tests with minimal training

▪ Existing college facilities can be used to host tests

▪ Direct comparability of college performance

▪ Skills requirements are driven by employers

▪ National skills standards can be set up relatively quickly

▪ Skill standards also helpful to calibrate required inputs and costs

To deliver up to 10 pilots with proposed PPP model by the end of the year, enabler development needs to be complemented by starting delivery

SOURCE: McKinsey, TVTC

PRELIMINARY

Months 1 2 3 4 5

Missing enablers/open issues to detail PPP package▪ Forecast capacity▪ Understand cost-

benefit▪ Skill standards▪ Data accuracy▪ Communication▪ Further refinements

TVTC PPP unit ▪ Build internal unit to manage PPP relationships

PPP tender process (pilot in 2012 with up to 10 colleges)

▪ Identify and select providers

Build quality assurance and regulator

▪ Design system governance

Mis

sin

g e

na

ble

rs Private providers on board

New proposal developed and aligned based on revised TVTC data

Detailed proposals developed and agreed upon in last project phase

Final PPP

model

Sc

ale

-up

de

liv

ery

Thank You