The national report of Kazakhstan describes in great detail a situation of accelerating brain drain. This brain drain occurs as qualified, prime-age individuals with the skills needed in the domestic labour market leave Kazakhstan. In many cases, the country has paid a premium for the development of these skills. Economists, teachers and technicians account for the three biggest professional groups of emigrants.

Some of the reasons behind the exodus of qualified people can be found in labour market problems. Although they may not be obvious in the official statistics, these problems concern the quality of jobs on offer and the working conditions. Informality and self-employment are widespread, and young people constitute one of the population groups most likely to find employment in such jobs, which are also poorly paid, offer limited or no prospects for development and provide weak labour protection.

The workers who leave the country are replaced by a stock of considerably lower qualified workers with only basic or lower secondary education. The number of incoming migrants with higher education is particularly small compared to the number of higher education graduates who leave. These trends pose a veritable risk to the national plans for human capital development in Kazakhstan for two major reasons.

The first is that the country does not seem to have yet developed any policies to promote circular migration. Circular migration is known to provide benefits for both the sending and receiving country, and for the migrants themselves, by generating and helping to distribute the financial, human and social capital generated by employment abroad. The second is the absence of a mechanism for the proper acknowledgement of immigrants, the identification and recognition of their professional skills (including recognition of informal and non-formal learning) and their proper and legal integration into the national labour market. This leads to wastage of their human capital.

Both the national report and the digitalisation strategy acknowledge that Kazakhstan is only at the beginning of its digitalisation trajectory. Much remains to be done if the good practices and innovation capacity seen in the dedicated hubs in Nur-Sultan and elsewhere are to become a driving force for the national economy. The development of human capital is thereby one of the priority areas in this respect.

To a large extent, the human capital development strand of the digitalisation strategy involves cultivating a new generation of information and communications technology (ICT) specialists, specifically in areas that are in the domain of vocational training, such as information systems and information security system designers, database management system developers and software developers.

To prepare the education and training sector for this responsibility, the digitalisation plans call for a revision of content and priorities in secondary general education and VET by adding new subjects to the curricula, developing new professional standards and, as already mentioned, allocating a sizeable share of the state order[4] The state order refers to study places funded through the state budget, usually in specialties which deliver qualifications that are projected to be in demand on the labour market.
to promote participation in the new ICT-related courses.

However, at the time of preparing this assessment, the national report suggests that the VET system is not yet fully ready for these tasks due to systemic shortcomings that may risk the slowing down or even failure of the digitalisation plans. One such risk is the acute shortage of teaching staff with enough knowledge of foreign languages (English) and ICT. Another is the gap that exists between the education and training system and the ICT sector as a potential employer of graduate talent. There are problems in relation to communication and ICT employer participation in VET. This prevents the VET system from adjusting adequately and in a timely manner to the new, ICT-related demand in the economy and to the expectations associated with the digitalisation strategy.

For some years now, national authorities, stakeholders and the donor community in Kazakhstan have been prioritising teacher-related policies as an area of significance for better and more equitable education (OECD, 2014). Such policies have also recently been prioritised as a key area for human capital development through VET. Despite remarkable progress in improving employment conditions, professional development opportunities and remuneration for teachers, challenges in this area still remain. These challenges relate particularly to teachers and trainers in VET, who have been largely excluded from many of these improvements.

Unlike teachers in general education, teachers in VET do not receive financial incentives to engage in professional development and the conditions of their employment have remained largely unchanged. Furthermore, the salary scheme for trainers and masters in blue collar disciplines (in Russian рабочие профессии or working class jobs) still does not take into consideration their professional category and prior work experience.

These shortcomings lead to several problems. The most significant of these appears to be the shortage of teachers and trainers – especially in specialised subjects, which also happen to be the ones providing qualifications in high demand in the labour market.

In 2012, Kazakhstan launched its long-term strategy for national development, in which it committed to becoming one of the 30 most advanced countries in the world by 2050. VET, and more specifically the labour market relevance of its outcomes, is seen as essential in the realisation of this strategy and other plans for economic and social progress through human capital development.

VET enrolment capacity and spending on VET have grown in line with the strategic significance of the sector, driven in part by a sizeable increase in the number of state-funded places. However, there are also indications that these state-sponsored opportunities are not being used effectively enough. This may prevent the VET sector from realising its full potential in the area of human capital development.

Specifically, the VET system continues to struggle to reach its main beneficiaries – students and their prospective employers – and address their needs and expectations. Employers too continue to experience difficulties in filling vacancies that require VET-related skills. Year after year, well over half of the jobs posted with the labour market services are for staff in occupations requiring vocational qualifications and remain unfilled.

Kazakhstan has embarked on a number of policy actions to remedy these shortcomings. Prominent examples include boosting the number of study grants (state order places or Goszakaz) allocated to VET programmes that lead to qualifications in high demand in the labour market, introducing a nationwide 'VET for free' initiative and focusing more closely on career guidance services.

The national report provides some evidence on the effectiveness and impact of these policies, which suggests that the policy responses are not as effective as anticipated. One of the reasons is that the planning and allocation of places and state grants for VET relies on an outdated methodology that does not capture the regional labour markets' need for human capital. Another reason is that the majority of public VET schools still depend on the state order for most of their funding needs[5] National report of Kazakhstan, 2020: E.5.1.
and thus have an interest in retaining their historic enrolment capacity even if that means continuing to teach subjects that are no longer in demand. In turn, this leads to considerable misalignment between demand for places in VET and their supply, and to unmet labour market demand for skills. Finally, the system of career guidance is fragmented and lacks proper coordination.

Vocational schools in Kazakhstan face difficulties in delivering the relevant outcomes for the labour market and consequently in performing their role in contributing to economic and social prosperity through human capital development. According to some sources[6] See, for instance, Álvarez-Galván, 2014.
, some 70% of employers in Kazakhstan are dissatisfied with the skills of VET graduates, and VET graduates themselves feel that they struggle to find a job because their education and training are disconnected from the world of work. The transition time to first-time employment for VET graduates is 21 months, which is very long when compared internationally. Even after finding a job, close to half of all VET graduates do not find employment in their field of specialisation.

One of the major reasons for this situation is the limited relevance of the skills of VET graduates. In 2015, for example, the performance of VET students in science as measured by the Organisation for Economic Co-operation and Development's (OECD) Programme for International Student Assessment (PISA) was 32 score points lower than that of students in general education. This is the equivalent of one year of schooling. The latest round of the OECD's Programme for International Assessment of Adult Competences (PIAAC) in 2018 suggests that secondary education (including VET) in Kazakhstan is also not particularly effective. In terms of mean literacy proficiency, for example, young people (aged between16 and 24) with secondary general education or VET in Kazakhstan perform almost as poorly as young people who have no secondary education or are not in education. The difference between both groups is 14.73 score points, which is the second lowest of all countries participating in PIAAC.

The national report of Kazakhstan describes a number of policy measures that are being taken in response to the second key challenge. These measures are at different stages of implementation. The majority of these responses strive to improve the labour market relevance of human capital development through VET, but a number of actions also aim to improve the quality of teaching and learning in VET more broadly.

To address the low quality of VET in the country, Kazakhstan is planning to implement a gradual change in the methods of instruction in VET to make them more student-centred and competence-based. On the other hand, measures designed to boost the labour market relevance of VET include highly diversified actions such as the independent certification of VET graduates by professionals employed in the graduate's respective field; the modularisation of programmes; the forecasting of skills needs; and the provision of entrepreneurship learning.

At the same time, there are a number of shortcomings at technical level in these policies, which prevent them from having a proper impact. These include an inadequate and outdated quality assurance and progress monitoring system, weak links between VET providers and employers (despite substantial progress in the area of dual education) and persistent deficits in the area of infrastructure investment and the availability of teaching and learning materials.

The third key challenge concerns the area of lifelong learning and adult education. In Kazakhstan, the educational attainment of the active, working age population is well above the average for countries in the EU and the OECD, which the authorities have chosen as a benchmark of development. Despite this long-standing achievement in terms of formal education, however, the working age population of both genders in Kazakhstan is, on average, significantly less proficient in literacy, numeracy and problem solving than the populations of other countries and the OECD. In fact, the 2018 PIAAC results suggest that, of all the 39 countries that participated in the assessment, Kazakhstan has the highest proportion of low-achieving adults in literacy and the seventh-lowest level of adult performance in numeracy.

This situation reinforces the importance of promoting opportunities for adult education and lifelong learning, as described in the national strategies. However, it also suggests that the implementation of strategic commitments in this area may not be as effective as planned and needed. The education and employment authorities in Kazakhstan promote adult education policies to support people who already have a job as well as those who need remedial training in order to find work. However, major shortcomings remain unaddressed, in particular the continuing absence of adult education data, the lack of incentives for employers who wish to participate in workforce development through adult education and the absence of mechanisms for the recognition of informal and non-formal learning.

In the first cluster of recommendations (recommendations 1 to 3), the ETF proposes actions that aim to increase the effectiveness of state-sponsored opportunities for human capital development through VET. These actions are intended to address the policy-related shortcomings in the funding for VET, the methodological limitations in the allocation of state grants in VET and the limitations in career guidance which prevent students from taking informed choices about their education and training careers.

The second cluster of recommendations (recommendations 4 to 6) targets some of the underlying reasons for the persistent problem of low quality and relevance of human capital development. These reasons include the inadequate quality assurance and progress monitoring system, the (still) weak links between VET providers and employers, shortcomings in infrastructure and shortages in the availability of teaching and learning materials.

The third and final cluster of recommendations (recommendations 7 to 9) are intended to help remedy some of the challenges concerning the use of adult education for workforce development purposes. At the time of this assessment, such use was hampered by a lack of proper data; the absence of incentives for employers to participate in the provision of adult education opportunities and support the professional development of their employees; and the lack of progress in developing mechanisms for the recognition of non-formal and informal learning.