The Italian System of Continuous On-the-Job Training and the Interprofessional Funds Conference "Financing of Further Professional “ Conference "Financing of Further Professional Training“ Prague - 10th November 2006 Giancarlo Dente Fondazione Giacomo Brodolini Rome, Italy

In the last 10 years the average growth rate of the Italian economy was equal to 1.7% compared to 2.2% of the Euro area and 3.4% of the U.S.A. During the average growth rate of the productivity was 2.4% in USA, 1.2% in EU and 0.6% in Italy General overview

Economic and social factors

Labour force quality is a key-element of long-term economic performance In Italy the average education level is below the advanced countries’ figures (OECD area) and the Italian students’ performance is not competitive Labour Force Quality

Comparative indicators underline significant delays:  20% of Italian workers participate in training activities (EU average is 40%)  25% of Italian companies organize training courses for their employees (EU average is 60%) Training activities

A low educational level of the labour force Reduction of the convenience to invest in human capital Main causes

The structural features of the Italian manufacturing system: - small enterprises - local markets - goods with a low innovation intensity - low propensity to training investment Main causes

Consequences

Policies

Three main paths to fund “continuous on- the-job training”: 1. ESF (Measures D.1 and D.2) 2. National laws on “continuous on-the-job training” (’93 and 2000) 3. Interprofessional Funds only for the employed Policies

Period bln EUR allocated to continuous on-the-job training (19% of the total of public resources for education&training) Continuous on-the-job training absorbed 0.05% of the total spending for ALMPs (Active Labour Market Policies) European Social Fund’s contribution to continuous on the job training policies amounted on average to 60% Policies

The main policy innovation within the current national continuous on-the-job training system (2001) The Funds are financed on a compulsory basis by enterprises via the National Welfare Institute (0.3% of the employee’s gross earnings) Interprofessional Funds

In 2005 resources coming from the payment of 0.3% of gross earnings amounted to 610 mln EUR Causes: the increase of gross earnings and the positive trend of dependent employment Interprofessional Funds

Enterprises have the power to decide the destination of their contributions:  Ministry of Economy (2/3) and Ministry of Labour and Social Policies (1/3) may use them respectively to co-finance ESF and national training measures  Contributions may flow into one of the 11 Interprofessional Funds set up bilaterally with the social partners and tasked with planning and managing vocational training initiatives for their members Interprofessional Funds

Start-up period of the Funds will end at the beginning of 2007 Definition of the institutional procedures to be implemented by the MLSP and National Welfare Institute General and detailed agreements between social partners and employers’ organizations Interprofessional Funds

Almost enterprises joined the Interprofessional Funds until 2005 Most of them became members of the Fund promoted by their sector organizations On average the enterprises members of the Funds employ 14 people (the Italian average dimension of an enterprise is of 7 employees) Interprofessional Funds

Available resources Committed resources 20% of resources were committed to continuous on- the-job training in 2005 Interprofessional Funds

Multiplier effect: enterprises added on average 0.65 EUR to each Euro used to finance continuous on-the-job training measures In 2005 the Funds’ average contribution for each worker participating in continuous on-the-job training initiatives was 423 EUR. The highest contributions refer to managers (1000 EUR on average per person) Interprofessional Funds

The distribution of employed people working in enterprises members of the Funds is not homogenous across the country: 50%National average level 20%Southern regions 54.6%Lombardia 55.3%Veneto 60.6%Emilia-Romagna Interprofessional Funds

Strong segmentation in the distribution of continuous on-the-job training. The profile of the participant: - employee of a big enterprise working in the service sector and located in the North - clerks and managers participate the most in continuous on-the-job training activities Interprofessional Funds

The participation rate is strongly related to the contract type: - permanent contract 50% - fixed-term contract 30% - part-time 31% - collaborators 17% Interprofessional Funds

Few enterprises invest in continuous on-the-job training and fewer use public resources (public policies represent only 10% of total investments in the field) Significant gaps between the needs of end-users and the procedures of public interventions (funding delays, lack of information, skepticism about vocational training impact) Interprofessional Funds

Workers participating in continuous on-the- job training activities: 10-15% (EU objective is 12.5% of people by 2010) Typology of continuous on-the-job training: specific firm courses (30.4%), sector courses for different enterprises (30.6%), courses for independent workers (39%) Employment condition of participants: dependent (67.6%), atypical (2.4%), independent (30.1%) The Emilia-Romagna Region

9.1%> %Low secondary and elementary schools 51.2%High secondary schools 14.3%University EDUCATION 39 yearsAverage age 88.3% %15-24 AGE 41.5%Women 58.5%Men GENDER The Emilia-Romagna Region

Profile of the trainees: experienced and qualified employees with permanent contracts, having homogeneous careers and holding secure and generally well paid jobs Only a small share of the trainees (8% of the total) are people holding less stable and worse paid jobs (women, employees with segmented careers enduring periods of temporary unemployment, foreigners, people over 55, part- time workers) The Emilia-Romagna Region

Low-skilled workers and employees of small companies are not involved in continuous on- the-job training courses Therefore arise concerns on the future sustainability of the current industrial structure: the need to change the actual productive specialization (manufacturing) and to cope with delocalization processes Consequently, continuous on-the-job training initiatives play a strategic role The Emilia-Romagna Region

Social dialogue on labour market has a strong tradition in the Emilia-Romagna governance model At the same time there are sharp contrasts between social partners and employers’ associations caused by different interests The Emilia-Romagna Region

Thanks for your attention! Giancarlo Dente Fondazione Giacomo Brodolini Via A. Depretis, Rome – Italy