The Governance of Decentralized Cooperation in Collectively Organized Training Systems

In collectively organized training systems, firms, state agencies, and intermediary organizations of both business and labor cooperate in skill formation. In this process, these different actors are strongly dependent on each other. For instance, firms participate in training activities if they can reasonably expect to benefit from their involvement. Whether they benefit, however, is at least partially dependent on the behavior of other firms. If other firms do not provide sufficient training, if the quality of training is low, or if competition for prospective trainees increases its cost, a firm might be better off not engaging in training activities. Collectively organized training systems are thus based on decentralized cooperation between multitudes of actors in order to work. The key challenge of successful decentralized cooperation is to get private actors to cooperate with one another. However, such cooperation is not self-sustaining and depends on public policies and capable intermediary associations. The state is ultimately forced to govern collectively organized training systems in a way that induces private actors to voluntarily engage in the provision of training. In this paper, we review the literature on skill formation and industrial relations to conceptualize cooperation in collectively organized initial and continuous training systems (Austria, Denmark, Germany, the Netherlands, and Switzerland). On this basis the paper then presents an analytical framework that can be applied in empirical explorations of the causes and mechanisms that maintain high levels of cooperation and resolve conflicts of interest – both at the regional and the sectoral levels.