Legislation and dedicated programmes on adult education and training in Serbia have the mission to offer opportunities for education and lifelong learning, in order to respond to labour market and individual needs for new knowledge and skills. The goals are labour market-oriented, such as to improve employment opportunities and facilitate professional mobility and flexibility, and socially-oriented, including to reduce poverty, increase inclusion, and develop democracy and tolerance (GoS, 2018a).

According to the LFS of 2017, 4.4% of Serbian citizens of working age participated in non-formal learning, whereas the government commitment for 2020 is a participation rate in continuing learning of 7%. The EU benchmark for lifelong learning participation is to reach 15% or more by 2020.

The Adult Education Survey (AES) conducted in Serbia by Eurostat in 2016, however, gives a better picture of participation in education and training, as a selection of indicators in Table 8 show. According to this survey, non-formal learning was a reality for 18.2% of the working-age population in 2016. The discrepancy can be attributed to the different methodology used in the two surveys. Hereafter, we build on the AES, because its methodology is considered more robust and accurate than the LFS. Moreover, the AES results provide additional statistical information that is useful to understand the characteristics of adult participation in various forms of education and training.

The access to learning opportunities is uneven, and varies depending on people's key characteristics. Essentially, employment status, skills level and age influence the likelihood of adult participation in learning, as follows. Those aged 55 to 64 had little access to lifelong learning, with only 7.3% of them participating in training. Only 0.5% of low-skilled people were in training according to the data. Among unemployed people, only 9.5% participated in learning opportunities in 2016. It is worth noting that the LFS, though recording a lower participation rate overall, converged on the same conclusion of unequal access to adult learning activities.

Learning was job-related for 14.1% of the respondents to the AES, which could be a proxy for Continuing Vocational Training (CVT). Last but not least, more than 90% of the survey respondents confirmed they had been involved in informal learning. This is in line with international findings, whereby informal learning remains the most popular learning modality among adults.

In Serbia and other countries alike, adults' access to non-formal, but especially informal, learning is undocumented (ETF, 2013). As a consequence, additional analyses are usually needed to capture information about the learning content and outcomes. These analyses build on qualitative methodologies, where the main informants are learners, providers, employers and employment services. However, they tend to be carried outand there are concerns about whether the results are then used to inform new CVT design and implementation.

Table 8 – Main indicators in the Adult Education Survey (AES) in Serbia, comparison of 2011 and 2016 (%)

Source: Eurostat: Adult Education Survey

Notes: n.a. = not available; b = break in time series

The government of Serbia has deployed multiple measures to favour adult learning. The TRP national report states that between 200 and 250 VET schools are providers of adult education. They offer requalification and additional qualification programmes, and courses of flexible duration from three to 12 months. VET schools also provide part-time secondary education for adults. Training is provided through the network of local employment services. Different providers at secondary and tertiary level are involved to meet the training needs of the regulated professions (GoS, 2019a).

The Law on Adult Education 2013 and the Law on National Qualifications Framework (NQF) 2018 award greater flexibility for skills development of adults. The legal framework for more flexible ways to acquire competences and qualifications is a relevant pre-condition for open and equitable lifelong learning. There are two key mechanisms to realise such flexibility: i) non-formal learning as a recognised pathway towards formal qualifications, obtained for example by giving accreditation to non-formal courses; and ii) the organised process of validating competences that people have acquired through non-formal and informal learning.

An overview of strategic orientations of CVT is currently missing. As seen earlier in Table 2, the distribution of educational attainment shows that 74% of the active population has a medium or low level of education, 16% and 58% respectively. As stated earlier, this is often viewed as mirroring people's skills level. For almost three-quarters of the active population, therefore, continuing training encompassing technical-vocational skills together with other competences would be relevant.

This suggests that participation in adult education and training according to the indicators in Table 8 remains below its potential. It moreover indicates that the CVT is fragmented whereas a coordinated strategy would be beneficial. Serbia has developed such a strategic framework and priorities for initial vocational education, proving useful for the subsequent policy design and implementation. The strategic framework and priorities helped create a common understanding among the actors in the national system, and it offered a basis for negotiating external aid in support of these priorities. CVT would benefit from a strategy in a similar manner. This point will be further reviewed in sections 3.2 and 3.3.

It must be acknowledged that the labour market information system is well structured and of good quality in Serbia. Estimates of labour market needs are used to plan adult education programmes for attendees to acquire professional competences or qualifications. These estimates are based principally on forecasts of employers' needs, obtained through employment surveys and analysis of vacancies. The national employment service employers' survey results feed into the planning of the active labour market measures, which contribute to addressing the skills mismatches and allow estimates of occupational needs for the year ahead (GoS, 2019a). The courses are also targeted depending on unemployed people's characteristics, in order to foster their current skills profile. This is a type of provision aimed at registered unemployed people, thus responding to short-term needs in the labour market.

The labour market information system has to improve the application of the research findings to the anticipation of future skills, and the design of policies and programmes for the future. There is an issue of governance too, in that the research activities and use of the findings for the said purpose tend to be discontinued (GoS, 2019a; ETF, 2017a).

Initiatives are diversified though, and address other people besides unemployed people. In the last few years, the government has designed and delivered short-term courses to meet the growing demand in industries like ICT. Started on a pilot basis in 2017, these courses are being systematised to be available regularly in different geographical areas. The purpose of the initiative is to upskill or strengthen people's qualifications to support ICT production and fast expansion of services. A shortage of skilled workforce is representing a major impediment to sustained development in ICT.

The private sector is active in providing continuing training to employees. Companies in the ICT sector are investors in human capital, actively provide training and retraining, and hunt for people with the relevant education and training profiles in the labour market (ETF, 2017b). Companies in other sectors invest in skills development too, to varying degrees depending on opportunity cost, expected return and, as mentioned above, the employees' profiles.

Broadly speaking, CVT covers short- and medium-term skills needs. In most cases, it is initiated by the relevant companies, delivered in non-formal modes and remains largely undocumented. The participation rate in job-related non-formal learning activities was 14.1% in 2016, according to the AES survey results reported in Table 8.

The following recommendations relate to public and private actors alike, considering the prime interest of both initial and continuing learning and skills development for the economy and the society as a whole. The Ministry of Education, Science and Technological Development (MoESTD) should lead from among the government actors, while other ministries' and agencies' contributions will be crucial to cater for the entire lifelong learning spectrum. Moreover, non-traditional actors who can bring informed views on people's non-formal and informal learning should be part of the discussion on the new Serbia Education Strategy.

First, there is a quantitative impact shown by the variations in vacancies that depend on labour demand in each economic activity. In 2017, vacancies increased in trade-related activities while they decreased in agriculture, forestry and fishery. The changing demands pose the challenge of adjusting the education and training offer to ensure graduate employability, including discontinuing routes that no longer lead to employment. In the short term this is never easy, and tensions typically materialise between the short-term demands and the long-term solutions. Experiences of skills demand changes in other countries have led to reskilling through dedicated training, and validation of non-formal and informal learning to facilitate mobility between sectors. These examples of adopted measures may serve as a source of policy learning.

The second element is the qualitative impact on skills demand. Private sector companies show preference for hiring people with a high level of skills even for jobs that would in principle require medium-level skills. The employers' choice demonstrates appreciation for the broad skill range that tertiary graduates often possess, including key competences. On the tertiary graduates' part, the high youth unemployment pressurises them to accept job offers below their expectations. These two sides of qualitative impact reinforce the skills mismatch in the Serbian labour market. As assessed in the TRP national report (GoS, 2019a) and according to the ETF's measurement (ETF, 2019a), this type of mismatch tends to be rather pronounced.

A third type of impact can be seen in the use of human capital. The different pace of change among companies seems to imply a different use of people's skills, depending on the mix of tradition and innovation that the businesses implement. Assuming a linear continuum in the real economy transformation – though recognising it is a simplified assumption – we may compare the two ends in the continuum as follows.

At one end of the continuum, we find companies that absorb new technology but remain loyal to their traditional business model. Often these companies do not reach their potential for development. Even when they hire highly qualified young people, they may not get the most out of them due to their outdated business model. At the opposite end, we find innovative companies inclined to embrace new business models. They find obstacles in Serbia, including obstacles to competition and high skills shortages, for example in the Science, Technology, Engineering and Mathematics (STEM) fields (Ivanovic, 2019). These diverse situations and constraints to transformation build a negative dynamic in which limited expansion of the innovative activities and limited use of the country's human capital risk reinforcing each other.

The moderate pace of innovation in business is, therefore, another cause of skills mismatch in the Serbian labour market. Said differently, the coexistence of tradition and innovation in the economy leads to suboptimal use of human capital. Companies that continue their established business model do not use their employees' skills sufficiently. Companies that use more high-level skills are confronted with these skills shortages.

In addition to skills shortages, other obstacles[1] Other obstacles to company growth in Serbia include access to financing including venture capital and insufficient simplification in the public administration, but they are not discussed in this report.
seem to restrain companies that might further grow and if so would hire and use more skilled people. Otherwise, highly skilled people would find employment in knowledge-intensive jobs, and secondary education graduates would not suffer competition for the medium-level jobs. The assessment in this section has been based on the available data and it is supported by the arguments in the government's ERP 2019–21 (GoS, 2018a), the European Commission assessment on the ERP 2019–21 (European Commission, 2019a), the OECD policy outlook on South East Europe's competitiveness (OECD, 2018a), and the Public Policy Research Centre's analysis of the knowledge economy in Serbia (Ivanovic, 2019).

Students in VET programmes in 2017 represented almost three-quarters of the total secondary school population of Serbia. The enrolment rate in the school year 2017/18 was 55.5%, with a small difference between girls and boys (see Figure 1). While remaining consistently high, enrolment in VET programmes is decreasing by about 2% yearly in absolute numbers, and slowly relative to general education (ETF, 2019b). The school year 2018/19 may have represented an exception, since it recorded the same level of attendance as the previous year in VET programmes, according to SORS data cited by the TRP national report. In 2018, there were 510 secondary schools (460 public and 50 private), of which 111 were gymnasiums, 310 VET schools, 40 art schools, 45 mixed gymnasium and VET, and four mixed VET and art schools. Moreover, there were 43 public schools/classes for disabled students (GoS, 2019a).

Figure 1 – Initial VET in Serbia 2017 (%)

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Source: ETF data collection

The very fact that VET students represent the majority of secondary students gives the VET system a key position in the formation and development of human capital in Serbia. If we also consider the active population's educational attainment (Table 2), we conclude that the VET graduates form the majority in the labour market. Notably, they are the largest portion of employed people when looking at employment by broad occupations data (see Table 9).

Table 9 – Employment by broad International Standard Classification of Occupations (ISCO) 08 (%)

Source: Eurostat

Note: LOW: ISCO-08 group 9; MEDIUM: ISCO-08 groups 4–8; HIGH: ISCO groups 1–3

The mix of continuity and innovation in the economy as a whole and inside individual companies, therefore, directly concerns young people in vocational education. It influences their choices as students and as future employees. From a human capital development perspective, the question is whether they are duly equipped to obtain and maintain a quality job throughout their active lives, given the change and uncertain situation.

Data for VET programmes at the beginning of the 2017/18 school year shows the students' preference for economics, law and administration (13.3%), electrical engineering (10.9%), health and social welfare (9.6%), machinery and metal processing (8.7%) and trade, catering and tourism (8.1%), according to SORS data (cited by GoS, 2019a and ETF, 2019a).

The most popular VET programmes, however, seem at odds with the job openings. The shortages in trade activities and in manufacturing were mentioned earlier, but there are other areas of high demand. The national classification of job vacancies reported rather high shortage in health and education, and for metal processing, clothing production, civil engineers, and road and transport occupations. There were not enough managers, professionals and clerical support workers, as indicated by undereducation in these occupations. Where staff turnover is particularly rapid such as in ICT, the number of job vacancies is not always captured by the statistics.

Many VET graduates opt for an extra level of qualification, and many enrol in university education in large part due to insufficient post-secondary non-tertiary education options. The scarcity of post-secondary education options is an additional source of mismatch, while labour market information points at a demand for this education level in various sectors. One of the employers' motivations to hire tertiary graduates is their broad competence, including key competences. However, these could be formed through renovated learning outcomes at secondary and post-secondary level. Evidence is provided by employers' surveys (e.g. ETF, 2017b), which highlight that higher education graduates are performing tasks and duties requiring skills that can be formed by technical education. One can thus conclude that post-secondary VET could cater for these skills demands.

The specific yet relevant example is ICT education and training, to which the government is paying specific attention at tertiary level and through dedicated short-term training courses, as mentioned in Chapter 2. Furthermore, in compulsory school and general secondary education, teachers are being trained with a view to introduce coding as a key competence. But secondary VET was not included in this process at the time of writing this report, mainly due to scarcity of resources. This appeared odd, having highlighted the critical role of VET for the present and future human capital. VET graduates will in future perform ICT-related tasks in a wide variety of occupations, surely more than the previous generation. Last but not least, secondary VET teachers are often engaged in continuing VET for those in employment or unemployment.

Serbia's current strategy for the development of education is based on highly inclusive principles. The vision and priorities in this strategy are coherent with the country's long-term goals, as summarised in the Introduction to this report. Other national strategies support these principles, such as the Strategy for Social Inclusion of Roma 2016–2025, which provides a comprehensive framework for action with budgeted measures aimed at improving the participation of young Roma in education and drastic reduction of dropout rates. Broadly, decision-makers and schools are progressively deploying measures aimed at easing participation and reducing or preventing early school leaving and dropout (GoS, 2019a).

The evidence in the TRP national report supports the above assessment of coherence between the national goals of social cohesion and the attention paid to inclusiveness in the education vision and associated strategies. The report also informs about the policy responses that may be falling short of expectations, based on the observation of intended and unintended effects at the stage of implementing the policy, as follows.

Positive affirmative actions are proving their worth in remedying well-identified difficulties. As said earlier, disadvantage cumulates in rural areas since the limited education and employment opportunities are reinforcing exclusion based on poverty and/or ethnicity. To act on this evidence, the government has mandated the schools to provide extra support to prevent student dropout, especially where participation in VET is a challenge for children from poor households and those in rural areas and small municipalities. Local self-governments are given direct responsibility to form inter-sectoral commissions for addressing special needs in education. Progress in integrating Roma students into the education system was acknowledged by the European Commission in its report for Serbia in 2019; the European Commission (2019c) report also called for strengthening the implementation of measures to reduce dropout levels and segregation. On another front, the envisaged school rationalisation may generate extra risk, notably if the plan is to close schools located in scarcely populated areas.

Similarly, the Active Labour Market Policies (ALMPs) are successful when their design is tailored to specific population groups' needs. These comprise long-term unemployed people, inactive people, young people transitioning from school to work, adults with low levels of literacy and people with low skills levels. Employment rates after programme completion are relatively satisfactory, and the government is mobilising the employment services to build on the results and be even more responsive (GoS, 2019).

The opposite situation is that of insufficient targeting, and here the measures for unemployed young people illustrate the case. The EU-funded Employment and Social Affairs Platform's peer learning activity found that the ALMPs in South East Europe, including Serbia, are insufficiently targeted. Notably, while the data shows that unskilled young people hold the worst position in the labour market, no specific programme was designed to support this group. The platform's peer learning found offers of traineeships to gain in-company practical experience, for unemployed people under 29 years of age. In Serbia, the traineeships last up to one year. Being generically designed, however, they appeared to involve secondary and tertiary graduates, not unskilled young people. Tables 13 and 14 show that both youth-targeted and non-targeted ALMPs tend to benefit secondary or tertiary education graduates, whereas no measure is reaching unskilled young people (RCC, 2018).

Table 13 – Youth-specific ALMPs delivered by the public employment services in South East Europe, 2018

Source: RCC, 2018

Table 14 – Share of youths benefiting from non-youth-specific ALMPs by educational attainment

Source: RCC, 2018

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.

VET has a clear role in the context of adult formal education, as well as training and retraining including for the unemployed, through agreements with employment services at the local level. The Riga report confirmed that VET schools are the most important formal providers of vocational training for adults. They offer retraining, further qualification and specialisation programmes for formal educational profiles, along with a variety of training courses lasting from three months to one year that are accredited under the Law on Adult Education (GoS, 2019b).

The ALMPs and the formal education and training that sustain quality employment are crucial for the effective use of human capital. Besides the measures, Serbia could activate complementary actions. The government could more decisively engage in the social enterprise field, allowing experimentation. Lessons on social entrepreneurship are being learned internationally; hence, Serbia could both try its own different models and participate in policy learning. The experimentation and policy learning would create expertise in view of a framework adequate to the Serbian context (ETF, 2017c).

The national Digital Strategy is an area requiring attentive monitoring, as in 2019 its plan was failing to cover remote geographical areas. Digital inclusion is a global concern: technological advances are creating new or accentuating existing divides in every country. Excluding those living far from urban areas from the Digital Strategy implementation would penalise the population groups that have less education and employment opportunities. Experts considered the e-inclusion policy scarce and incomplete, with schools lacking internet connection and basic digitalised material (OECD, 2018; Western Balkans Digital Summit, 2019). Teachers that were exposed to digital literacy training evaluated it as of high quality and practical; however, details about the plan for involving teachers in larger numbers, which the Riga report cited, were not available (GoS, 2019b).

Besides the education sector, the adoption of digital technology is significantly slower in SMEs compared to large companies. Also, the impact of measures addressed to the SMEs has been weak so far (OECD, 2018). In learning and working environments alike, both the access and approach to the technology matter. Said differently, in education the teaching may have to change, and in the SMEs the business model should change. The latter is more difficult to understand and implement, and therefore it requires adequate accompanying measures (Western Balkans Digital Summit, 2019).

The budget for education in Serbia is provided principally by the central government. Public secondary education is funded from central government, local government and from a secondary school's own income. The contribution as a percentage of GDP has been declining over the last decade, as shown in Table 11. There was no indication in the TRP national report nor in the ERP that the financing of education and VET in particular was going to increase. Researchers in Serbia have identified the need for a new, stronger pact on national education, also entailing a reform of management and financing of education (Aleksić, 2019).

When comparing Serbia's view on its future, it seems that the resource allocation to education and skills development has been underestimated. The vision of a high-performing economy that is innovative and competitive domestically and internationally is a realistic one, for a country endowed with high capacity and political commitment like Serbia. But human capital development requires investment to ensure quality education and training, in formal and non-formal modes, and an environment supportive of informal and self-learning for all.

1. Diverse needs to be matched by diverse offer

Ensuring effective and good-quality learning for young people and adults, of all backgrounds and socio-economic status, is a major endeavour where Serbia is making constant progress. VET is making its contribution, especially with its three- and four-year programmes, while a more varied provision would have more chance to meet the needs of those who are temporarily at a disadvantage.

It is recommended to widen the VET offer in two ways. First, broaden the qualification standards for more flexibility, thus easing graduate employability as well as the transition and mobility between jobs. Second, plan for diverse, flexible and short-term programmes to facilitate access for early school leavers, vulnerable children, young people not in education or employment, and people who are unemployed or need additional training to become active in the labour market.

Enhancing the key competences throughout the VET provision is to be seen in the same logic as redressing the disparities that have been discussed in this section. The key competences are necessary for every learner but even more for those who have less or no options for acquiring them at home, non-formally or on their own. Digital competence in particular can be an enabler of employment if accompanied by other measures. The plan for all secondary education teachers' digital literacy should be enacted without delay.

2. Strategise the support that mitigates vulnerability

There is a need to deploy a combination of skilling and other measures to tailor support to young people and adults with low skills levels. Researchers and policymakers have come to the conclusion that remedial actions need to include training, specific support for job matching, work-based learning and employment facilitation (Cedefop, 2016, 2019).

It is recommended to design measures that are tailored to well-identified needs. Modalities for delivering training should build on the learning attitude and preferences of the individuals. In the same logic, work-based learning should be adapted and supported for individuals from disadvantaged backgrounds.

3. Increase VET and ALMP financing

Overall, the financial allocation to education and training does not seem to cater for the development goals of Serbia. Failing to mobilise additional financial resources will lead to severe underachievement with respect to the country's strategic ambitions.

In relation to disparities in particular, it is important to recognise that disadvantaged groups should be provided with affirmative actions in a consistent manner for prolonged periods.

It is recommended to mobilise and allocate larger financial resources to the measures directed to those most in need, in order to mitigate the disparities discussed in this section. This would include greater financing for education measures and, as advised by the European Commission report on Serbia (2019c), for active labour market measures.