The countries of the Western Balkans face a paradoxical situation: on the one hand, companies are urgently looking for qualified skilled workers; on the other hand, the region suffers from high unemployment. This is especially true for young people, whose unemployment rate is between 24 and 49%. A major reason for this disparity is the poor quality of vocational education and its distance from the actual labour market.
Vocational schools are severely underfunded in the Western Balkans and usually do not have suitable, modern infrastructure and equipment. In addition, the training methods are often outdated and the teachers are not trained and upgraded well enough. Above all, however, there is too little cooperation with the private sector to meet their needs with appropriate training content. This results in a glaring lack of sufficiently qualified personnel, which endangers the region's growth prospects. According to studies, this is even one of the biggest obstacles to further economic development there.
To counteract this, KfW has established the "Regional Challenge Fund" on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). Its aim is to provide vocational students with better training in order to increase their employability. This is done - similar to the German dual system - primarily through close cooperation with private enterprises in order to adapt the training content more specifically to the needs of the labour market.
The fund works in the six economies of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, Northern Macedonia and Serbia. There, it promotes consortia of state-recognised vocational schools and private companies, which can apply for support from the fund for joint vocational training projects. This applies to better infrastructure and equipment as well as to training content and the advanced training of teachers. The implementing partner is the Western Balkans 6 Chamber Investment Forum (WB6 CIF), a regional chamber association.
The first two calls for proposals have already taken place - and generated an overwhelming response. Around 350 consortia showed interest in funding, and in the end 63 projects from the six countries were selected. The majority of them, more than 60%, were vocational schools; in addition, there were also technical colleges or vocational academies among the selected consortia.
Almost half of the participating companies come from the manufacturing industry, as well as from the IT sector, the health sector or the tourism industry. They include both mini-companies and companies with more than 500 employees. With support from the Regional Challenge Fund, consortia selected so far will offer more than 4000 new training places by the end of the second year. The Challenge Fund is distributing a good EUR 27 million for this purpose. The third call for proposals is currently taking place; here, too, the call met with huge interest.
In addition, the Fund will promote a regional dialogue through the WB6 CIF so that education actors can exchange their experiences. Last but not least, the activities of the Challenge Fund should also help to bring the countries up to the relevant EU standards. Indeed, all six are striving to join the EU and, in order to do so, must come closer to the European Union's standards in a wide variety of areas; this also applies to the education sector.
However, the overarching goal of this innovative fund remains to align vocational schools more closely with the needs of the economy and to release their graduates into the labour market with better skills: in order to reduce unemployment in the region - and to eliminate the lack of personnel in companies. In this sense, for example, the president of the Albanian Chamber Society, Ines Muçostepa, said she considers long-term cooperation between companies and vocational training institutions to be "very important" because it forms a "solid basis" for a more stable and stronger economy.
