Competition drives changes in training

16 September 2008

Competition is driving training providers to become more creative and adaptable in their approach to business, according to research published by the National Centre for Vocational Education Research (NCVER).

NCVER Managing Director Dr Tom Karmel said the research explored the effect that a more market-oriented training system was having on how training providers operate.

Today, government funds for training are becoming more contestable, changing the business landscape especially for the 60 or so TAFE institutes.

"The reforms of the last decade have resulted in training providers changing how they run their businesses," says Dr Karmel.

"Providers are now actively seeking out alternative funding sources to reduce their reliance on the public training dollar and are doing so through various arrangements. These include direct fee-for-service training, ancillary training and using public funds to increase private income.

"This research gives us a clearer picture of what they are doing and what obstacles providers face in responding to the market."

The research also explored thin training markets - where the actual and potential number of students may be too small to attract providers.

It suggests that the extent of thin markets may be overstated and the 'thin market' argument is used to limit competition. However, when training demand is minimal the cost of delivery is higher.

The research suggests that collaboration between providers, and with industry, can overcome some of the problems presented by thin markets.

Another area where there is room for improvement is in research and development. Few providers undertake research and development activities beyond pure market research and innovation in teaching and learning. Those that did make such an investment increased their capabilities.

To download a copy of Vocational education and training providers in competitive training markets, please visit http://www.ncver.edu.au/publications/2025.html.

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