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Restructuring Technical and Vocational Training in the Kingdom of Saudi Arabia (PPP Initiative) By: 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 sq km • Total The Kingdom of Saudi Arabia • Land Area: 2, 000 sq km • Total Population: 8, 429, 401 foreign workers 27, 136, 977 • Population Growth: 2. 21% • Life Expectancy: 74 years

Larges Expansion Plan in TVET • • 50 50 162 4 Colleges of Technology Larges Expansion Plan in TVET • • 50 50 162 4 Colleges of Technology (Male) Higher Institutes of Technology (Female) Industrial Secondary Institutes Trainers Training Colleges

PPP Initative: The overall project consists of 3 main phases – second phase has PPP Initative: The overall project consists of 3 main phases – second phase has just been completed and third is about to start May 2012 December 2011 July 2011 1 2 3 Diagnostic and Strategy Activities Market Testing Implementation ▪ ▪ ▪ Put enablers in place to implement strategy ▪ Start implementation of recommendations ▪ Develop analytic understanding of job demand supply in the Kingdom Understand setup and sizing of higher education sector (university vs TVET) ▪ ▪ 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 Deep dive on TVET and benchmark performance, provision and system setup ▪ Perform “due-diligence” on existing vocational training institutions (financials and outcomes) to refine performance understanding Develop/refine TVET strategy going forward Today

ESTIMATES Partnerships TVTC Key recommendation of phase 1 was to massively scale up the ESTIMATES Partnerships TVTC Key recommendation of phase 1 was to massively scale up the size of vocational training in the Kingdom… 2011 Students Thousand 2013 2015 259 176 110 10 98 78 2020 456 188 71 420 36 144 Graduates Thousand 86 58 31 3 33 25 61 25 135 9 15. 1 Budget SAR billion 7. 3 4. 9 3. 5 1. 4 8. 6 4. 5 2. 8 6. 1 2. 5 13. 7 1. 4

…and improve its quality further through 4 main initiatives. However, several issues open at …and improve its quality further through 4 main initiatives. However, several issues open at the end of phase 1 Focus areas 1 Scale up publicprivate partnerships Key recommendations Key open issues ▪ 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 How should new PPP model look like to ensure high performance but also keep costs under control? ▪ 2 TVTC transformation ▪ Align TVTC colleges with expanded PPP model ▪ How to ensure a consistent highquality system across all colleges? 3 Establishing short work-readiness programs ▪ Launch programs to provide short work-readiness training to the currently unemployed, possibly using employer-lead voucher model ▪ How to align efforts of HRDF with future vocational activity? 4 Regulatory setup ▪ Center should reduce its role to regulation, funding, information provision, policy coordination ▪ How would new regulatory setup look like?

In the market testing phase we involved we set out to refine our answers In the market testing phase we involved we set out to refine our answers and address open issues with lots of external input Benchmarking effort Expert interviews ▪ Engaged international 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 Interviews conducted since December, 2011 Canada ▪ 5 education providers ▪ 1 accreditor ▪ 1 association of colleges US ▪ 6 education providers ▪ 2 accreditors ▪ 1 association of colleges UK ▪ 5 education providers ▪ 2 awarding bodies ▪ 1 industry body ▪ 1 regulator Germany ▪ 3 education providers ▪ Ministry of Labor ▪ 2 research and advisory organizations KSA ▪ 5+ nongovernment colleges ▪ Many employers Brazil ▪ 1 education provider Philippines ▪ Government regulator and manager ▪ 2 education providers Australia ▪ 3 education providers ▪ 1 association of colleges ▪ Government regulator

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

Further enablers need to be put in place to finalize PPP model 1. Develop Further enablers need to be put in place to finalize PPP model 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” SOURCE: Team

Providers will be selected through a rigorous Rf. P evaluation process… Long list creation Providers will be selected through a rigorous Rf. P evaluation process… Long list creation ~30 -50 Proposals Process ▪ 1 In full-time equivalents Round 2: highlevel business plan Round 1: prequalification Creation of a long list of potential providers based on – Benchmarkin g trips – Additional references from umbrella organizations ▪ ~20 -30 Final contracts Three steps process: ▪ Site visits to KSA colleges – Individual discussions ▪ Providers – Site visits to develop final providers detailed business plan – High-level business plans ▪ Providers bid for colleges (binding) ▪ TVTC provides feedback and asks questions Need to involve regional/low-cost providers in Rf. P process to ensure cost-efficiency – especially for “standard” programs Pre-qualification based on: – Accreditation – Students/staff 1 – International experience – Programs – Finance and performance ▪ ~ 10 -20 Round 3: final bid

Quality assurance model will be central for institutional and student level but left to Quality assurance model will be central for institutional and student level but left to market mechanisms for programs Final recommendation Rationale based on market feedback ▪ A single accreditor to ensure quality of all training providers, ideally inhouse with external support to set it up (could also be outsourced) ▪ ▪ Consistent standards ▪ Standards can be customized to KSA International programmatic accreditation strictly voluntary 1 ▪ ▪ Least intervention in the market National testing of all graduates in order to receive degree ▪ ▪ ▪ Direct comparability of college performance ▪ Skill standards also helpful to calibrate required inputs and costs Institutional level Program level ▪ ▪ Student level ▪ Existing teachers can be leveraged to run tests with minimal training ▪ Existing college facilities can be used to host tests Organization operates at scale in KSA, with resources to inspect many colleges Program accreditation redundant if national student testing is in place Skills requirements are driven by employers National skills standards can be set up relatively quickly

To deliver up to 10 pilots with proposed PPP model by the end of 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 PRELIMINARY Scale-up delivery Missing enablers Months 1 Missing enablers/open issues to detail PPP package ▪ Forecast capacity ▪ Understand cost-benefit ▪ Skill standards ▪ Data accuracy ▪ Communication ▪ Further refinements 2 3 5 New proposal developed and aligned based on revised TVTC data Final PPP model PPP tender process (pilot in 2012 with up to 10 colleges) ▪ Identify and select providers TVTC PPP unit ▪ Build internal unit to manage PPP relationships Build quality assurance and regulator ▪ SOURCE: Mc. Kinsey, TVTC 4 Design system governance Private providers on board Detailed proposals developed and agreed upon in last project phase

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