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Index to this Issue
EDUCATION –

Education and Training Services
Sector Competitiveness for Education and Training Services - Canada
The Services Sector Education and Training Authority, South Africa
SWOT ANALYSIS of the Services Sector
 

The education and training services (ETS) industry consists of establishments and organizations engaged in the delivery of education and training services mainly on a fee or contract basis for profit. These services include the commercial activities of public institutions and community­based organizations, which often operate on a cost­recovery basis. There are four general components within the industry: Back to Main Index

• firms specializing in education and training programs and their accompanying products and services such as courseware, curriculum design, train­the­trainer programs and training needs assessments
• businesses in other industrial sectors (for example, accounting, engineering, management consulting and telecommunications) that provide education and training services either as a supplement to their main product or service line or on a stand­alone basis
• private schools and training institutions
• commercial activities of public education institutions such as colleges, universities and those as opposed to the degree and diploma­granting activities of the public education sector.

Statistical data are lacking on the education and training services industry on both the supply and demand sides. Unlike most other service industries, the ETS industry does not benefit from an annual statistical survey, and collection of other data is very limited. While statistical data cover educational services at the aggregate level and numbers may point to certain trends, it is never clear whether these apply across­the­board to all types of educational providers including private sector firms. For example, Statistics show that the educational services industry — defined to include primary, secondary, university and non­university education — provided jobs to almost 930 000 people in 1996, with a total payroll of more than $34 billion. But because the lion's share of educational services is held by the public education system and because Statistics does not distinguish between private and public establishments, it is difficult to estimate the true economic importance of the private education and training services providers.

The analysis for this Overview therefore had to look outside traditional sources to gather a workable description of the industry. Inherent in this process are the sometimes inconsistent results among sources, depending on the assumptions made and their method of data collection. This is further compounded in foreign publications by their lack of focus.

This lack of data and the necessity for alternative data sources are not unique to the training industry, but are prevalent in many service industries. There is a need to recognise timely, complete and accurate statistical data to assess industry competitiveness. Back to Main Index
 

In the emerging global knowledge-based economy, intellectual capital has displaced natural resources as a primary determinant of economic strength and competitiveness. Canada's education and training services industry can play an important role in helping Canadians acquire the knowledge and skills needed to find jobs in this new economy. This Overview of the education and training services industry gives a general picture of the strengths, weaknesses and prospects of this industry sector so that providers and governments can develop practical approaches to strengthen the industry. Back to Main Index

The education and training services (ETS) industry is a heterogeneous sector comprising many specialized small and medium-sized enterprises (SMEs), training arms of companies in other sectors (such as equipment suppliers and consulting engineering firms), and training supplied by public colleges and universities on a contractual basis. It has developed historically to respond to the supplementary skills training needs of businesses and individuals.

Very little comparable data exist on this sector, particularly on private ETS suppliers. Since more than 55 percent of known firms have been established since 1984, the industry is still considered young. A 1992 Industry, Science and Technology Canada profile indicates that among the 3 000 or more ETS suppliers, almost two­thirds have five or fewer employees. Most of the private suppliers have headquarters in Ontario, British Columbia or Quebec. Because of the sector's focus on job-related training and skills upgrading, its services are highly marketable both at home and abroad. The main areas of expertise include executive and management development training, computer related training, and supervisory, communications, sales and marketing and professional technical training. There are no reliable estimates of overall industry revenues, but it appears that almost half the private suppliers export their services (46 percent), mainly to the United States and Europe.

Although the sector has world-class expertise in training delivery and product development, the many small firms predominating in the industry often lack sufficient capital to make large or long-term investments in product and staff development. In addition, the sector tends to have little expertise in business, marketing and distribution.  Back to Main Index

The basic tools of the industry are undergoing a radical change with the development of new media learning materials (NMLM), which encompass computer software and courseware content, including multimedia and interactive programs, applied to computer-based training. The flexibility and potential for timeliness inherent in NMLM open new markets for suppliers. These new tools enable what can be called just-in-time training, allowing training suppliers to supplement their traditional classroom and module- based programs with individually targeted packages whose interactive capabilities can give trainees and learners greater control over their learning and faster access to the materials they need. NMLM adds considerable power and value to education and training programs offered through distance education and the Internet.

Education and training services firms, particularly SMEs, find it difficult to attract capital and to secure loans and lines of credit. The banking and investment communities have been uncertain about how to value the intellectual assets represented by courses, curriculum packages and software. Solid sales records and successful strategic alliances among education and training providers are helping educate the financial community.

Because most Canadian SMEs cannot afford to hire training staff, and because of the proliferation of new skills requirements at all levels from equipment maintenance and operation to organizational management, the market for independent suppliers is growing. Foreign education and training services suppliers and international demand for training have sharpened competition. As a result, specialized education and training services firms have begun to develop strategic links with other industry sectors and to enter into strategic alliances in order to gain more effective market presence.

Clients both in Canada and abroad find it difficult to identify with confidence who speaks reliably for the sector from a national perspective, or which suppliers provide consistent, high-quality services. They must rely on individual contacts and experience for their information. Australia, France and the United Kingdom in contrast have definite strategies, policies and industry associations that provide a framework for the industry, and particularly for international marketing. U.S. providers exist in a less structured environment. They nevertheless operate in a more strategic fashion, and have strong coordinated marketing support. Better organization of the sector in Canada is a challenge that needs to be addressed.Back to Main Index

Internationally, demand for education and training will continue to grow, especially in the primary, secondary, technical/applied skills and informal markets. The Canadian International Development Agency (CIDA), the international financial institutions (IFIs, which include the World Bank and the other multilateral development banks) and the European Commission have committed billions of dollars to training, retraining and education. Ten percent of World Bank lending ($2.9 billion in 1995), for example, now goes toward education and training. Canadian firms have benefited from some of these investments, often as subcontractors, but increasingly as partners in consortia and strategic alliances bidding for principal project contracts. This trend should continue for the foreseeable future.

The sector is of critical importance in Canada's transition to a knowledge-based economy. A strong and vibrant training sector will play a key role in the transfer of knowledge and expertise to Canadian industry. By exporting its services, it will also make a significant contribution in helping meet the skills needs of emerging economies, and help them reach their own jobs and growth objectives.

The following issues must be addressed by government and industry:

• An acknowledgment of the value of cooperation in doing business at home and abroad is necessary. Education and training firms must work together in a more coordinated fashion and adopt more effective and cost-efficient approaches to doing business. Firms will greatly benefit from an increase in strategic alliances and partnerships. Small firms will need to combine their resources and expertise with those of other organizations, including the public sector. Success will depend on more effective consortia-building based on stronger linkages with a number of key sectors, including the financial sector. Back to Main Index
• Continued and concerted efforts by various levels of government and by industry must be undertaken to develop better systems or indicators to provide a reliable measure of quality. A system of quality assurance will be essential to build credibility for the industry in both domestic and international markets.
• Canadian firms must keep at the leading edge in their application of advanced training technologies. They will need to ensure that the skills they provide to their clients are keeping pace with technological developments. The industry's ongoing growth will depend to a large extent on its ability to use new technologies in the delivery of training services.
• Trainers need to concentrate on the development of their business skills, and will need to have a thorough knowledge of the issues faced by their clients. Business skills are necessary to the development of a solid client base and to educating purchasers about the value and benefits of investing in human capital.
• Additional research and data are needed to provide support to government policies and products intended to help foster the growth of the education and training industry. Statistics Canada must continue to improve its collection and reporting of the education and training industry data. Data and information on the sector are critical to demonstrating the importance of the sector as a contributor to Canada's economic growth.

Sector Education and Training Authorities (SETA) have been established in South Africa to ensure that the skill needs for every sector of the South African economy are identified and that training is available to provide for these skill needs.Back to Main Index

The Services SETA website aims to provide comprehensive information regarding the Authority, its structure and its functions. The information is presented in an easily accessible manner, covering both general areas as well as information specific to Employers, Training Providers, and Learners.

Chambers and Scope of Coverage

The structure of the Services SETA consists of nine chambers which cover a broad range of industries within the services sector. Each chamber is responsible for managing skills development within the scope of its own particular sector. The functions of the chambers are;

• To accredit the training providers. Without chamber accreditation the training conducted will not qualify for the grant scheme.
• To promote quality in education and training and monitor the provision of these.
• They will evaluate the assessment and moderation of people who received training.
• They will register workplace skills assessors and certify learners.
• They will recommend industry unit standards and qualifications to the National Skills Bodies and maintain a database of skills development in the industry.

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Website of SHARADA - Education Planning Journal
Website of Harini Nature Conservation Foundation
Website of Journal of Indian Bird Records and Conservation