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Originally, the informal sector was defined, among other criteria, by skills acquired on-the-job, outside the formal school system, most of its workers having no school level, even primary (ILO, 1972). Since the early times of the development of the informal economy, when the acquisition of skills outside of the formal education system was a defining characteristic of informality, much water has passed under the bridge and in particular the proportion of population having completed primary and even secondary school has dramatically increased, including in the informal sector and in the informal economy at large.

Today many informal workers have by now a primary or even secondary level of education, without even mentioning the young unemployed graduates temporarily (if not permanently) earning a living in the informal economy. Nevertheless the fact remains that informal workers generally lack the theoretical background and the skills that they could have acquired in the Technical and Vocational Education and Training (TVET) formal system. On the other hand, youth trained in the TVET formal systems lack practical experience acquired on the job while people having worked in the informal economy struggle to access to formal recognition of the skills they have acquired. In some cases, the large proportion of the youth that learn a craft on the job is older and above all more educated than their masters or the owners of the workshops. Consequently the status of apprentice has changed and trainees rather then apprentices are demanding more than learning by the eyes (Charmes, 1982), they need that their practice be strengthened by more theoretical knowledge.

Technical and vocational skills enhancement is one of the major issues that should be taken into account in addressing the informal economy, for at least two reasons: on the one hand on-the-job training remains the main provider of skills in the informal economy, and on the other hand, all the youth enrolled in TVET official programmes will not be absorbed in the formal labour market and many of them will have to find their way within the informal economy. This highlights the strong inter-connection between TVET provision and the Informal Economy on the following fields:

• Recognition and upgrading of skills developed in the informal economy, training of informal trainers, and upgrading of informal apprenticeship schemes;
• Access to higher-level skills training for improving the informal workers' performance;
• Formal and informal TVET schemes enabling learners to develop entrepreneurship and start-up businesses to come out from poor wages and insecure jobs.

TVET thus stands among the major domains of State intervention for improving the performances of informal operators, in terms of productivity and quality. The challenges lay in the place and role given to apprenticeship and the ways and means by which formal TVET systems strive to up-scaling the traditional-informal systems. Recognition of skills informally acquired is also a challenge as well as the adaptation of formal systems to match the new needs of the global economy.

Two implications result from these observations: firstly, it is required from formal TVET systems that they ensure the complementation and recognition of skills acquired on the job in order that those skills can match with the formal sector’s needs so that the informal apprentices are not locked in the informal economy. And secondly, the young trainees of the formal TVET systems should be provided with entrepreneurship skills that would allow them creating jobs of their own and finding their way through private initiative, rather than counting on wage jobs that are lacking on the formal labour market.

Today one of the most important issue that transition policies from the informal to the formal economy are facing is the absence of recognition of skills informally acquired, a pre-condition that is nevertheless necessary if a start is to be given to mobility from the informal to the formal enterprises.

The recognition process of non-formally acquired skills may entails high costs, both for applicants and for the States, thus the challenge for policy makers is to analyse costs and benefits and choose the most advantageous forms. Actually, non-formal learning’s outcomes that are valued in the labour market can generate relevant benefits, but in other cases outcomes may not justify the additional costs of recognition and certification. Experiences also suggest taking into account soft forms of validation, such as “skills passports”, which makes acquired skills visible to potential employers without proceeding with official recognition steps.

However, costs for recognition and certification are generally lower in the long-term if compared to the costs of providing formal vocational training for the majority of people or youth working in the informal economy.

Furthermore, one of the most recurrent criticisms regarding TVET systems is their lack of adaptability and flexibility (especially as regard updating and ability to respond to the most sought needs).

Because of their presence at the closest of the beneficiaries they intend to serve, grassroots organizations and non-state organisations - and projects they are in charge of - are the most capable to identify the needs - and especially the new needs - that TVET is supposed to satisfy.

Thus TVET formal systems should not be designed only to supply the formal sector with the trainees that it requires, but also to improve the productive capacities of the larger number of informal workers.

The paradox that TVET systems are facing is that informal on-the-job trainees often lack the theoretical background they deliver and should have access to their teachings, whereas at the same time these formal systems lack opportunities of actual on-the-job practices and experiences in entrepreneurship for their trainees in the real conditions of labour markets dominated by the informal economy: practical experiences offered to formal trainees are often limited to large and medium enterprises rather than micro and small enterprises where they could be confronted to the real problems of entrepreneurship.

2.1 Examples of national policies and actions from donors

Generally bilateral or multilateral agencies address the reform of traditional and non-adapted TVET systems: non-adapted in the sense that they have not been flexible enough to change along the new needs of the labour market. The German TVET and apprenticeship systems are often considered as models.

On the labour supply side, the objective is to improve employability and matching. There are various types of mismatches. Demand mismatches: economy and types of jobs versus skills sets and expectations of workers. Supply mismatches: type and quantity of skills produced and responsiveness to demand.

In this regard an interesting experience is the 20-year lasting GIZ project implemented in Egypt since 1995, with 6 years without GIZ. TVET in this country was subject to criticism because of insufficient and irrelevant training, poor skill acquisition, skills mismatches and expensiveness (totally school-based). The reform implemented a dual system combining school (2 days) and work experience (4 days), with regional units as self-financed matchmakers. A joint evaluation by teachers and employers leads to 2^nd degree diploma. Government and employers shared the costs. It was in fact the German dual system adapted to Egypt. The program covered 30,000 enrolees, 1,900 employers in 24/27 governorates and 32 occupations, with 76 technical secondary schools participating. 80% of trainees got job offers, but ¾ decide to continue at the university because of poor quality jobs and low wages (there is a discussion about having higher technical education in Egypt). The issue is to reach small enterprises (1 to 5% now) and rural areas and to improve school to work transition. EU is currently working on scaling up.

A similar project is currently being conducted in two regions of Morocco.

Also to be mentioned is the Rwandan National Employment Programme sharing sector approach between modernising sectors (such as agro-processing, construction, manufacturing: metal-wood, maintenance and technical repair services) and modern sectors (such as ICT, renewable energy solutions with SMEs).

2.2 Apprenticeship

Vocational training can take place in formal training institutions as well as at the work place in informal enterprises through traditional apprenticeship. The latter has demonstrated to be a major means to employment in the informal economy in developing countries and thus it must be taken into consideratio in policy formulation.

Traditional apprenticeship has played a major role in Africa: in Northern Africa with craftsman guilds and their influence on all industries and in sub-Saharan Africa on ethnic or cast basis. With the modernisation process, the system of traditional apprenticeship has lost weight but remains important in absolute numbers.

Paradoxically, the importance of apprenticeship in the total labour force is less well-known than it was some decades ago. The reason is that, more and more often, labour force surveys have applied the legal minimum age for defining the labour force whereas the measurement of child labour was sent back to dedicated modules or surveys, which did not systematically collected information on status in employment. Still the number of apprentices is admittedly high in Africa and apprenticeship remains a major entry to the labour market and a major provider for self-employment.

One of the advantages of such work-based learning is to facilitate the transition from learning to work by ensuring a better understanding of the workplace culture and the acquisition of good work habits or in other words a good proficiency in all dimensions of the craft, not only technical, but also in entrepreneurship skills. The drawback is that apprenticeship often hides poor wages and work conditions, as well as lack of basic occupational health and safety conditions.

“However, tThe EU experience in developing countries confirms that better and more broadly available apprenticeships can reduce youth unemployment and poverty when combined with national efforts to spur job growth. Further efforts should be undertaken to make apprenticeship a more attractive and a more efficient pathway to productive and decent jobs for more young people” (Gobbi D., 2015).. Recognizing that the differences in the conditions of each country make it impossible to develop a standardised framework and strategy for informal apprenticeship, the EU identifies some possible paths to be contextualised and scaled up. Improving the technical and pedagogical skills of master craftpersons; modernised training modules; enhancing the training capacities of informal trade associations; increasing the participation of women in apprenticeships; and recognition of informally acquired skills being at the top of possible pathways to be explored and tested.

In its modern form, apprenticeship alternates periods of on-the-job training at the workplace and learning periods in formal education institutions or training centres. In Europe and especially in Germany and Austria, this is referred to as the “dual system” where companies are training providers together with VET schools and centres. The dual system should be further explored and applied within VET strategies and reforms in developing countries.

Apprenticeship should be an integral part of coherent and comprehensive VET strategies. As the EC suggests (EU, 2017), it is recommended a comprehinse policy to informal apprenticeship at macro-level, embedding apprenticeship in social movements and creating institutional structures. Issues of financing and recognition of skills should be integrated in the policy formulation. On the micro-level side, it is important to combine apprenticeship with measures such as mentoring, credit, equipments and advisory services for start-ups.

2.3 Role and impact of projects or Civil Society Organizations for the recognition of informally acquired skills

The official recognition of diplomas and training certificates is a long and bureaucratic process in most countries. It can take years with a low probability of success and with considerable costs for individuals and institutions. An interesting good practice for projects on TVET consists in negotiating the certification of acquired skills with employers’ associations.

In many countries the main problem with the official TVET system is that it is often accused of producing types of qualifications that are not adapted—or no longer adapted—to market needs. That is, the types of training do not match the employers’ demand for different types of skilled workers. As a result, graduates of formal TVET institutions often have no other recourse than finding or creating a job in the informal economy. Employment in the informal economy is thus fed by the outputs of the formal TVET system that do not fit with the qualifications required in the labour market. At the same time, individuals who have completed informal systems of apprenticeship or skills training are prevented from finding jobs in the formal sector due to the absence of formal recognition of their training.

Prioritising the development and implementation of systems of recognition of informally acquired skills since it facilitates mobility from the informal to the formal economy is a good practice that was implemented in Uganda by SwissContact Germany in a EU-funded project Validation of Non-formal and Informal Training.

Several African examples are provided by an ILO report on case studies (Lange and al., 2015): construction workers, hairdressers in Ghana, plumbers in the Democratic Republic of Congo, construction in Rwanda, other trades in Cameroon and also mining in Colombia.

The assessment and recognition of prior learning in Bangladesh is an interesting example related to formalisation of skills and informal apprenticeship, which is part of the joint ILO-EU initiative with the Government of Bangladesh on the TVET Reform Project (2008-2013) that seeks to modernise and upgrade the TVET system and to make it more inclusive and accessible to disadvantaged groups and informal workers who were not formally trained and certified.

2.4 Recommendations in the field of TVET

From the assessment of some 200 projects on the informal economy, and especially the evaluation of ILO projects, Zegers (2016) identifies a number of good practices, lessons learned or recommendations (the precise projects from which they are derived can be found in references (Volume 4.2) that can be classified into three main categories: a preliminary step of recommendations for actions preceding the implementation of training, recommendations referring to the contents of training; and a subsequent step of recommendations for the support of trainees in their job search.

Such good practices and lessons learned can help in the design of TVET programmes at national level as well as at project level. They also can help designing adequate public policies for technical and vocational training.

Recommendations to make training more effective and more suited to the needs

1) When planning a TVET programme, conducing an internal review of Government priorities about labour market and economic diversification is a key preliminary step. Labour market assessments are needed to identify viable economic sectors for private sector development, the human resource requirements within the market and the appropriate training packages. The objective is to align the TVET system more closely with the requirements and dynamics of the market, as well as to the needs of an economic diversification strategy. A recurrent failure observed is the training of surplus labour in already congested industrial sectors.

2) Exploring a range of methods to determine the types of skill sets needed in the labour market is a complementary approach. Aside from labour market assessment surveys this can include surveying companies and Corporate Social Responsibility programs to understand the skill-sets that are needed. The example of ACUMEN is interesting in this regard. It is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of poverty. It aims at changing the way the world tackles poverty by investing patient capital in companies and businesses whose products and services are enabling the poor to transform their lives. It collects data on each of its portfolio companies to confirm that they are effectively serving low-income customers, and more recently it has done it through a gender lens (Acumen, 2015). In other words its assessments result into the identification of new skills - from design, production, marketing and sales to workplace structures and systems - needed by the companies in order to optimize gender integration within the business model of the company while increasing financial viability as well as social performance.

3) Ensuring the TVET and training is sufficiently tailored to local contexts and to the needs of participants is important so that beneficiaries can implement what they learned easily in the local situation.

4) Include emphasis on the establishment of linkages between government training institutions, private training institutions and private sector operators in TVET projects.

5) In project design it is important to take into account that not all youth have the inclination or aptitude to become self-employed, so any type of training needs to be sensitive to youth preferences and capacities. Therefore determining preference for self-employment or for paid employment working for others when enrolling youth in programmes is a prerequisite. Also one has to be aware that youth preferences may change over time.

6) Distinguishing between income-generating activities and market-based employment objectives must be kept in mind, as well as expanding the repertoire of courses and options for trainees in both.

Recommendations about the implementation and contents of training

7) A careful review and plan of the implementation steps of a TVET programme is required as well as ensuring that these are well organisedin order to avoid implementation delays. It has to be noted that any significant delays may result in loss of momentum and poor results.

8) Ensure that all TVET modules include clear learning objectives and, if relevant, establish linkages to national qualifications networks.

9) Ensure that projects include implementation of assistance with job referral in the project design.

10) Involve potential employers in the project by asking them to review course content and mentor trainees in order to promote market oriented training and reduce skills mismatch.

11) Link trainees to a range of public and private sector experts who provide expert training in innovative subjects not often considered for TVET programmes, for instance greenhouse techniques.

12) Develop voucher programmes for young and other interested persons to facilitate attendance in TVET programmes. A voucher program enables potential trainees to receive vouchers that they can use to cover (most of) the costs of training in a selected number of training sites. A project evaluation noted that the probability of working in the formal sector is increased by 4 percentage points as a result of the TVET voucher program. (Attanasio et al., 2015)

13) In vocational training include focus on a wide range of skills including with the retail industry and other customer service areas. Consider including possible types of employment that are often not considered for TVET such as sales service provider, security guard, IT sector, development of new products based on traditional crafts, and green jobs.

14) Ensure that translation of all the material that is to be used during TVET Programmes and other capacity strengthening materials is ready prior to training. Misunderstandings and message distortion may arise if the facilitator is relied on to translate content (also ensure that training materials are directly accessible to participants and content does not need too much adaptation during training). A project evaluation found that TVET in Kenyan villages was based on very useful material that, however, was written in English and most of the group members could not read it. The trainers then had to interpret it into Swahili and then local dialect. This was a long process of passing a message with high likelihoods that the message received by the final recipient was not the same as the original. Considering that the majority of trainers do not speak the language of the local community, these materials had to be translated into Kiswahili to reduce the risks of message distortion (Dondo et al., 2014).

15) When designing projects, take into account that people who never attained primary education may require supplementary assistance to level off with higher-educated participants (who are at least able to read and write). According to a project evaluation, requiring a minimum education level for youth program participants (such as completion of lower primary) improves the likelihood that youth will master the work readiness and technical training. Some trainers reported that training secondary and primary school leavers together improved the quality of learning across the board, particularly during group work. In USAID’s project in Rwanda, while youth with low literacy levels were the primary target population in the original plan, the Education Development Centre of AkaziKanoze found they required considerable supplementary assistance to match the performance of the more highly educated participants. “If being able to read and write is a minimum requirement, it makes a big difference. They have the capacity to understand and accept the concepts quickly and either continue in school or look for opportunities for work,” one sub-grantee partner coordinator observed (McLellan et al., 2012).

16) Note that employment creation after TVET completion may not be evident in the short term. If employment creation is to be directly fostered in a TVET project, this should be directly incorporated into the project design. This could include, for example, support for creating self-employment or training oriented directly to supply labour for new to be created employment opportunities.

17) Provide training with a specific session on doing job applications and strengthening of professional confidence. Do not underestimate that lack of preparation and experience in applying for a job is one of the main challenges that prevent those in the unemployed workforce from finding an employment opportunity.

18) Include focus on building relations with private sector companies to ensure employment of younger less-educated workers post training.

19) Promote use of locally available resources, building on already known techniques, and training on non time-consuming skills. (This should not be to the exclusion of innovative products and services if there is a market for them).

20) Where resources allow, provide the basic equipment necessary to the trainees in the form of income-generating ‘toolkits’ and provide support to access start-up capital. For example, in one of the on-going projects partnering with RNSF (Volume 4.4,) – the EC-funded Regional Project for Support to Child and Youth migrant workers (PRAEJEM) implemented by Save the Children in Côte d’Ivoire, Burkina Faso and Mali, the youth placed as apprentices with masters crafts were provided with toolkits (for instance for hairdressers, or metal working). However in the course of the project it was decided to transfer these toolkits to the masters crafts with obligation for them to make the apprentices work on these equipments because it was found that incentivisation of the masters crafts was a priority.

21) Engage in local procurement of tools and materials for training in order to ensure greater project effectiveness in supporting the local economy.

22) Include life skills and other training in TVET programming as it is critical to help prepare graduates for jobs. The inclusion of life skills and other soft skills training will help ensure that they can build sufficient confidence to implement their technical skills.

Recommendations for the subsequent support of trainees in their job search

23) Ensure that TVET activities are well monitored through an information system that collects data on the post training situation including:

- Absorption rate of graduates into the job market

- Changes in students’ attitudes and lives.

24) Promote and provide support to obtain internship options for TVET graduates so that they can acquire experience and come in contact with employers who may not always advertise jobs that are becoming available.

25) Ensure (and test) that project beneficiaries are fully able to use their newly acquired skills and working tools obtained through training. Monitor the beneficiaries even after the end of the project, supporting them in developing their new activities and, consequently, gain more from their work. Work with government and civil society representatives to enable this.

26) When providing seed capital support following TVET, ensure that it is provided within 2 months post- graduation to avoid disillusion and fatigue among graduates.

27) In situations where projects or other entities provide support for self-employment by providing work spaces, ensure that such spaces are sufficiently well located to be suitable to attract clients. While this may seem evident, it is not always considered. Examples of craft areas established in the city outskirts and remaining empty and unattractive are many.

28) Be aware that graduates of TVET may not immediately automatically find employment. Strategies need to consider the post-graduation support that addresses the specific obstacles to job market access faced by the young graduates. Develop other means to support graduates through social protection methods if needed until employment can be accessed.

Although this set of recommendations is based on projects experience, a crucial problem does not show up that should however be addressed. If apprentices in informal micro-enterprises are to be provided with specific training, the courses should be evening courses and, if not, the masters or micro-entrepreneurs have their say and should be asked to authorise their apprentices or should possibly be subsidised for that. But another difficulty may appear: a master can take it wrong that his apprentices acquire skills that could make them more skilled than he is. And another challenge can be to provide masters with ad hoc training in order to update their skills. Another difficulty that projects may encounter is that they support and provide skills to targeted apprentices (the beneficiaries), ignoring that in the same micro-enterprises, other apprentices do not benefit of their support: this is potentially the case in the project operated by Save the Children in Côte d’Ivoire (ProjetRégionald’Appui aux Enfants et Jeunestravailleurs Migrants (PRAEJEM) where young migrants are placed in informal enterprises with which a contract is signed for these specific apprentices (and not for the others, already working in the enterprise).

2.5 Conclusions

Technical and vocational skills enhancement is a major dimension of state interventions in the transition from the informal to the formal economy in that the efforts of adaptation of the current TVET systems for matching the changing needs of the labour markets can strengthen the formal enterprises to remain formal and help the informal businesses to transit toward formalisation. Such policies are two-fold: On the one hand youth trained in TVET systems must be provided with management skills and on-the-job opportunities extended to small-scale enterprises (where they are more likely to acquire management skills that could be useful of and when they will create their start-up). In other words the upper tier of the informal sector can be a useful training provider if only it is considered as a real partner and gets support from TVET centres. On the other hand skills acquired on the job in the informal micro-businesses must be strengthened to provide informal apprentices and trainees with the theoretical backgrounds that will help them to find formal jobs on the labour market or to create start-ups that would not be destined to be or to remain informal in the long run. A number of good practices and lessons learned exist that can be capitalised in order to formulate and implement appropriate technical and vocational training strategies in countries where large proportions of the workforce still acquire their skills in the informal economy. Employers’ associations, crafts’ associations, private training providers, and official TVET systems should be mobilised, incentivised toward achieving these aims.

2.6 References

• ACUMEN - Cartier Charitable Foundation, International Center for Research on Women (2015), Women And Social Enterprises: How Gender Integration Can Boost Entrepreneurial Solutions to Poverty, New York, 51p.
• Attanasio, Orazio;Guarín, Arlen; Medina, Carlos;Meghir, Costas (2015), Long Term Impacts of Vouchers for Vocational Training: Experimental Evidence For Colombia, Impact evaluation, National Bureau of Economic Research, Cambridge, MA, USA, impact evaluation on the project “JovenesenAcción” (JeA), Colombia
• Charmes Jacques (1982), L’apprentissage sur le tas dans le secteur non structuré en Tunisie, in “La politique de l'emploi-formation au Maghreb. 1970-1980”, CRESM-CNRS, 472 p. Collection “Etudes de l'Annuaire de l'Afrique du Nord”, Annuaire de l'Afrique du Nord, année 1980, cf. pp.357-396. Also published in Cahiers ORSTOM, série Sciences Humaines, 1985,vol. XXI n°2-3, pp. 305-328. http://horizon.documentation.ird.fr/exl-doc/pleins_textes/pleins_textes_4/sci_hum/36878.pdf.
• Charmes Jacques and Mei Zegers (2016), Identification of Innovative Approaches to Livelihood Enhancement, Equity and Inclusion of People Dependent on the Informal Economy, Vol.4.1 Good Practices and Lessons Learned. Extracted from 33 Projects Selected Under the 2009 EC call for Proposals: “Investing in People. Promoting social cohesion, employment and decent work. Support for social inclusion and social protection of workers in the informal economy and of vulnerable groups at community level”. RNSF, ARS Progetti.
• DondoAleke, Kiara Japhet and Baaru Mary (2014), Enterprise Development for Rural Families Programme in Kenya, Final Report, Final evaluation, SIDA, Stockholm.
• ETF (2016), Torino Process 2016-17, Torino, 31p.
• EU (2017), Vocational education and training for inclusive growth in development cooperation, Tools and Methods series Reference, Document N°24, Brussels, 145p.
• Gobbi Donatella (2015), Apprenticeship, RNSF, ARS Progetti, Thematic Brief N°5
• ILO (1972) Employment, Incomes and Equality. A Strategy for Increasing Productive Employment in Kenya. ILO, Geneva.
• Lange Ralf, Baier-D'Orazio Maria, Hermanns Dieter (2015), Case studies on skills assessments in the informal economy conducted by small industry and community Organizations, Annex to assessing skills in the informal economy: A resource guide for small industry and community Organizations, ILO, Geneva, 23p.
• McLellan, Iain&Bamwesigye, Jackson, 2012, Mid-Term Evaluation of the AkaziKanoze Youth Livelihoods Project (Rwanda), Midterm or interim evaluation, USAID, Washington DC.
• Mode, Matteo (2014), Evaluation of ACF’s Livelihood Projects in Abkhazia funded by UNHCR in 2011-2013, Final evaluation, ACF International, UNHCR, Geneva,
• Walther Richard (2008), Nouvelles formes d’apprentissage en Afrique de l’Ouest, Vers une meilleure insertion professionnelle des jeunes, AFD, Paris, 191p.
• Walther Richard (2013), Etude sur le développement des compétences dans l’économie informelle, Commission Européenne-DEVCO-EUROPEAID, 62p.
• Yang Jin (2005), Recognition, Validation and Accreditation of Non-formal and Informal Learning in UNESCO Member States, UNESCO Institute for Lifelong Learning, Hambourg (Germany), 67p.
• Zegers Mei (2016), Identification of Innovative Approaches to Livelihood Enhancement, Equity and Inclusion of People Dependent on the Informal Economy, Volume 4.2: Recommendations Based on Analysis of a Range of Development Agencies on Support to People Dependent on the Informal Economy, RNSF, ARS Progetti, 213p