Mexico and the World
Vol. 5, No 1 (Winter 2000)
http://www.profmex.org/mexicoandtheworld/volume5/1winter00/school_towork.html

School To Work Transition In Mexico:

Table of Contents 

Abstract  

Introduction  

1. Overview of the School-to-Work Transition: Situation and Programs  

1.2 The National College of Professional Studies (Colegio Nacional de Estudios Profesionales, CONALEP): Some recent experiences  

1.3 The University Dilemma: social needs or market production

2.2 Program of Total Quality and Modernization, CIMO

IV. Policy Recommendations in the Mexican case and possible implications for other countries 

Endnotes  

Biographical Notes 
 

Abstract 

     This paper discusses different aspects of labor training in Mexico. In the first section an overview of the school-to-work transition is presented and general data on labor force educational profile is provided. A review of recent experiences at the National College of Professional Studies (CONALEP) illustrates the limits and contradictions for linking technical education with the world of employment. The controversial discussion about the role of universities and paradoxes between social needs and market production is examined, taking into consideration the paradoxes between social needs and market production, according to different approaches provided by the OECD reports on university, science and technology as well as partnerships with private sector firms. The second section analyses the social implications of School-to-Work policies, in order to evaluate some features of two training programs supported by STPS (Ministry of Labor).  The third section is a more macro analysis of Mexican economic structure and its influence on labor behavior, especially the lack of incentives for workers to participate as formal employees. The final section consists of the policy recommendations in the Mexican case and suggestions for policy-making in other countries. 
 

Introduction 

     This paper discusses and evaluates the recent experience of adult training for work (capacitación para el trabajo) in the Mexican service and industrial sectors. The Mexican case exemplifies the painful transition of a protected economy to an open, liberalized market intimately linked to global product and service exchanges. In Mexico, some predictable paradoxes are to be observed among training programs in the context of an intense economic modernization process with low rates of employment growth. These paradoxes are expressed by increased technical innovation but much slower employment creation, more goods and services for external markets and relative stagnation of the internal market, and extensive economic deregulation and a rapidly growing informal sector.  

     Mexico is now a member of the OECD (Organization for Economic Cooperation and development) and is beginning to evaluate public policy for education and training in light of its insertion in the global economy. Recent developments in public policy relating to the design and implementation of training programs provide useful data and experiences. Programs administered by the Secretaria del Trabajo y Prevision Social, STPS (Ministry of Labor), will be discussed.  This will be followed by a brief review  of current discussions on the university, as well as science and technological education linked to production needs. 

     Debate centers on the proper role of universities in the production process: should the university respond directly to the needs of industry or negotiate a relationship, which would preserve the autonomy of scholarship? Contemporary debate on technical and professional "formation"¹ is focused on how to identify and improve the necessary linkages for competitiveness, thereby profiting from comparative advantages belonging to each country, region or industrial activity. Another controversy is how to define the new role of the State in this emerging context.  

     For countries like Mexico, the challenge of providing primary education for the growing population is enormous. Recent experience in the East Asian countries demonstrates that once basic education needs are fulfilled, focused recruitment of skilled personnel is needed in order to supply today's demand for high-tech labor.  Recruits for these ongoing needs are now formed in special institutions, and Mexico is no exception. Mexican technical and professional institutions have been incorporating the demand for labor re-training and adapting the learning process to new, emergent technologies. 

     The objective of training has shifted from individual worker skills to a novel concept of enterprise. A key issue is how to achieve a general perspective of the work environment in a global enterprise in order to improve "the culture of production" (quality, efficiency, cost reduction, just in time systems, etc). Worker qualifications  (dexterity, skills and aptitudes) are today a part of a wider cultural process in society that anthropologists are beginning to understand. 

     Two programs supported by STPS with World Bank loan money merit comment.  The first is related to training scholarships for the unemployed (Programa de Becas de Capacitación para Desempleados, PROBECAT); the second program involves the training of workers already employed (Programa de Calidad Integral y Modernización or Capacitación Industrial de la Mano de Obra, CIMO). There follows a general review of some relevant experiences on training programs at post-secondary levels, discussing the problems of formation at the university level in Mexico.  

     Further, there is a discussion of OECD approaches to the role of science and technology and the projected linkage of public policies for Mexican universities with production and service sector labor demands.  Some insights will be given to point out some recent trends in the CONALEP program (National College of Professional Studies), linking school training to maquiladora enterprise (in-bond processing plants) on the northern border. 

     Also, some attention will be given to issues such as the educational and career  mobility of CONALEP students, and the integration of vocational, general education and specialization by occupation in the industrial or service sectors. The experience of CONALEP provides some insight into work-based learning and proportion of time spent in work settings as well as skill learning which occurs in school workshops and school-based enterprises. The discussion of new developments of school-to-work policies and their social implications, leads to a consideration of Mexico's socio-economic structure and the role of the informal sector. The final section is devoted to policy recommendations and possible implications for other countries. 
 

I. Overview of the School-to-Work Transition: Situations and Programs 

1.1  Educational Profile of Labor Force 

     The 1991 National Survey of Education, Training and Employment shows a total labor force of 31.23 million.²  Of those, 3.6 million had not received any instruction; 7.3 million had not completed primary education and 6.2 million had a six-year elementary school education. The same survey indicates that 5.7 million had one or two years of secondary schooling. Compared to the 1988 Survey, in 1991, Mexico had 6 per cent less non-instructed  or unschooled (11 instead of 17 per cent), and 3 per cent fewer who had not completed primary school (23 instead of 26 per cent). The number that completed primary school was 3 per cent less (19 instead of 22 per cent) and those that had at least one year of secondary school dropped 7 per cent (18 instead of 25 per cent). 

     The 1993 Survey indicates that lower schooling or instruction levels correlates with less access to training programs. Of the 5.8 million workers that had received training courses, 27 per cent had higher education; 17 per cent were technical professionals (with 3 years training after secondary school), 15 per cent were workers with secundaria diploma studies and 12 per cent were people with a primary school education. 

     Bear in mind that of 2,312,000 economic units registered in August 1994, 92 per  cent were micro enterprises, most of whom have no more than 5 employees. Only 12 per cent of employers have any professional studies, 11 per cent had secondary or middle school education,  4 per cent have been in  preparatory or senior high school and 3 per cent had some technical training. Thus, of the 2.4 million small business people (most of them, micro, self-employed or engaged in artisan workshops), 51 per cent possess only primary studies and 17 per cent had no instruction at all. 

     The employed personnel with more schooling is concentrated in domestic and foreign corporations. In these companies only 12.5 per cent of employees had no formal education or did not complete primary school.  This indicator increases to 20.3 per cent in micro- enterprises.  However, 10.6 per cent of micro firm personnel have professional or postgraduate studies; this is the case of high technology services such as computer services, graphic design and specialized consultants among other value-added services.  According to 1991 data regarding the level of schooling in a universe of 16.8 million workers, 6.1 per cent did not have any instruction at al information.³  The numbers for July 1998 have increased to nearly 16 million workers out of work or unemployed. 

     The National System of Technological Education (Sistema Nacional de Educación Tecnológica, SNET) was created by the Mexican government in 1978 (although technical education started before 1930). The National System includes privately organized training and constitutes half of total training capacity at this time.  Among the educational services offered by SNET are formal and informal training programs for work and technological education of two types: technical high schools (bachillerato técnico) and mid-level professional formation. 

     At present, there are 200 educational centers that offer training for industrial and service sector jobs with more than 100,000 students.  Concerning mid-level technological education there are 900 schools with around 650,000 students. In addition, there are programs of non-formal training that involve some 216,000 students.  Nevertheless,the historical growth pattern of enrolled students indicates an important demand contraction for these services occurred at the end of the eighties and at the beginning of the present decade. Demand grew 0.9 per cent in the 1988-1993 period, and dropped from 16.6 per cent in the 1988-89 school year to only 13.6 per cent in the 1991-92 school year. 

     According to the National Employment Survey (Encuesta Nacional de Empleo, 1991) the patterns of training demand are: 1) the training requirements are in direct proportion to the urban area dimensions where the economic unit is located; 2) most of the training courses  were provided to persons between 25 and 39 year-old; 3) the majority of training demand corresponded to wage-earners (70 per cent) and secondly, by self-employed (13 per cent); and 4) the majority of training demand corresponds to people employed in the tertiary sector.⁴ 

     According to the data, more than 60 per cent of pre-employment training is for mid-level technical education, normally directed at students that already have secondary  school certification. Therefore, training programs are highly concentrated—even with recent changes—in CONALEP centers and the bachillerato tecnológico (3-year terminal vocational school). 
 

1.2 The National College of Professional Studies (Colégio Nacional de Estudios Profesionales, CONALEP), Some Recent Experiences 

     The CONALEP system is a decentralized federal institution at terminal mid-level operating country-wide.  Policy objectives adapt CONALEP to regional needs, although it shares facilities and has some management autonomy. Among its goals are the training of technical professional personnel at post-secondary levels and to provide for a degree of humanistic formation.  Another task is to increase the value of the  technical careers that are highly depreciated in Mexico and throughout most Latin American countries. 

     The CONALEP career program consists of six semesters in a school-based system. The degree or título obtained is as technical professional at post-secondary level, registered by the General Direction of Professions at the Ministry of Education (Secretaria de Educación Pública, SEP). There have been significant changes in the linking efforts of CONALEP educational centers in the last five years, but these policies have not been successful in all regions and in all careers. This is largely attributable to the excessive centralization of decision-making.  Educational policy planners seek standardization of and administrative control over the training options and academic curriculum in relation to legal requirements for professional  certification instead of promoting regional development priorities and advances in science and technology.  

     The reasons why CONALEP has not been able to build an adequate relationship with private sector firm needs are several, but the key problem seems to be the misconception of training and skills, in most cases providing highly specialized qualification to specific job categories when technological innovation is fast changing all such categorizations.  Thus, skills soon become obsolete and training programs are not updated. 

     Even if at present there were more linkages between CONALEP centers and firms, and more student work-place internships, the experience known as on the job training is still far away of being a general pattern in training schemes in Mexico. A research project supported by Colegio de la Frontera Norte has evaluated the recent experience of CONALEP centers seeking such linkages with the industrial system.  The research survey is related to the assembly industries (maquiladoras) in Tijuana and Ciudad Juarez—both cities located on the northern Mexican border of Mexico—and their existing relation with public institutions of professional formation.⁵ 

     In each of the case studies, the linkages began informally, because many of the graduated technical personnel had become lecturers at their former educational centers and at the same time they were working in the maquiladoras. This spontaneous situation was transformed in 1989 due to the formal establishing of Linkage Committees (Comites de Vinculación), new entities in the framework of the Ministry of Education policies and activation of local actors.  

     The survey in 39 educational centers in Tijuana and Ciudad Juarez, found that there are several types and degrees of linkage experiences depending on each center. In some of them, the linking is limited to student visits to the factories, in others, there are students doing factory practices and some educational centers offer training courses for industry technical personnel. 

     Recent CONALEP experience in Tijuana and Ciudad Juarez highlights  the role of the Development Center of Advanced Technology (Centro de Desarrollo de Tecnología Avanzada)—both cities have centers whose objectives are to provide information, training, consultancy and technology transfer to the industrial and service sectors. The Centers are becoming the linkage points for new partnerships. The study findings reveal that exchanges are frequent but stability and steady relations seem to be weaker.  At the same time, there are important efforts taken to adapt training programs  to the needs of local firms. However, comprehensive planning for linkage does not exist; there seems rather a pragmatic effort of adaptation to firms' current demands. 

     A general conclusion may be that training offered by the technical centers is more related with work organization and its management than technological changes as such. The fundamental deficiency can be briefly summarized as a lack of or insufficient practical learning in the school curriculum, even if at present there are tendencies for improvements. 

     The obstacles that slow the positive change seem to be a lack of information—in some areas of the industrial sector—in  relation to careers and educational institutions that are willing to build links, and scarce firm interest for linkages due to routine organization already functioning inside plant training processes.  

     There exists an enterprise distrust vis a vis training provided by educational centers and the implementation of courses. This lack of confidence comes from technical shortages, specially the deficiency of specialized skills and poor knowledge of concrete problems of the enterprises. It should be noted that linkage problems are not only technological matters but also relate to lack of knowledge on labor organization process, quality control, and human relations. 

     Other recent research supported by the Mexican Ministry of Work and Colegio de la Frontera Norte about employment conditions and training in assembly exporting factories in Mexico found that a high number of workers are trained inside the factory where training programs are oriented to labor motivation in order to obtain better factory discipline and increased quality of production.  Nonetheless, 20 per cent of in-bond factory labor force in Tijuana, Ciudad Juarez and Monterrey were technicians and professional personnel trained in the formal education system: technical secondary schools, technological centers such as CONALEP and regional institutes of higher education. 

     There are significant changes in the labor force profile in maquiladoras compared to the situation some years ago. By now between 8 to 11% of activities performed by personnel are highly qualified while 40% are still non-qualified activities. Another finding was that an important proportion of maquiladora workers are also students. At the same time, many of the graduated students get a post in the maquiladora and a great number of teachers in educational centers also work for the maquiladora.  The general conclusion of this research is that maquiladoras have become a sector with a relevant number of capital intensive plants, high technology, salaries several times higher to minimum wage, qualified labor structure, and employment and work conditions with long-lasting stability.⁶  

     The problems found in Mexican technical institutions are similar to the Latin American profile. A recent survey of 80 programs (governmental and non governmental) in Latin America; as case studies on 13 specific programs revealed that if the sample is representative of what is going on, programs which effectively link academic teaching with work, or education with production are rare.⁷  For the Mexican case—and most Latin American cases—much of the planning policies focuses on pre-employment training; in practice, for most occupations the in-service development of skills is far more important.  At the same time, most in-service skill development is demand driven: skills are developed when they are needed. 

     To reorganize the Mexican training system implies strengthening the in-service skill development with more enterprise involvement; the school-based education has to be less specific and move when possible to work settings. Decentralization policies are relevant in order to avoid biased curriculum planning from offices in Mexico City. As a consequence of excessive centralization, it follows that the whole basis for manpower development planning, as it is organized in Mexico, could be supply-side oriented but is rapidly moving to demand-side planning. 

     The conventional approach assumes that the supply and demand for different skills are independent of one another, and that the objective of manpower development planning is to avoid shortages or surpluses. In fact, supply and demand are typically interdependent, to the point where they may be regarded as different aspects of the same process. For most occupations, other than those whose demand is demographically-determined (teachers, medical doctors and the like), the chief task of the manpower development policy is to facilitate the response of supply to shifts in demand, ensuring that the labor force be trainable, and that training provision be flexible. 

     The notion of imbalances between supply and demand, except in the sense of short term friction or very specialized skills, is not only meaningless but indicates misunderstanding of how skills are developed and utilized.  Further, with the exception of the demographically-determined occupations, there is little point in attempting to make long-term occupational forecasts.⁸ 

     Another relevant fact is that most micro and small enterprises do not have enough economic strength to express their needs in the market of training demand. They have real needs not necessarily detected by "market forces" but training schemes must take into consideration different kinds of demand not expressed in a typical supply and demand analysis. The challenge for rebuilding new training systems is to facilitate firm involvement and state fiscal policies for micro and small business. The supporting schemes for small-scale units should avoid subsidies and promote self-financing in the short and medium term, according to the region and economic branch of activity. 
 

1.3 The University Dilemma: Social Needs or Market Production 

     More insights are gained in relation to employment oriented educational policies at the university and technological higher education levels.  Recent trends in Mexican higher education still shows a great concentration of science and technology in the Federal District (nearly 50 per cent of The National System of Researchers—SNI—members and 96 per cent of Ph.D. graduates). While there are 37 state universities and 104 technological institutes outside Mexico  City, the system of higher education at state levels accounts for only 14 per cent of SNI members and 4 per cent of Ph.D. graduates.⁹ 

     According to the OECD report quoted above: "A number of features suggest that the higher education system may need deep reform to adapt to international standards...the links with the production system, which should nurture technology diffusion, remain too weak, and universities are often unable to prepare students efficiently for S&T development work in industry."¹⁰ 

     From a Mexican point of view, the OECD opinion about the need of deep reform in higher education could be widely shared, but the paradigm of the kind of reform needed seems to be more controversial. The idea of adapting Mexican education to international standards looks reasonable at first sight. However, the question remains of how to define international standards. Are the average quality standards of OECD members a good parameter for Mexican reform?  Are the specific Mexican social needs compatible with industrialized countries' standards?  

     The choices for a country like Mexico involved in a modernization process are very few. Nevertheless, since 1982 the OECD has pointed out  contradictions within the dominant paradigm. The OECD report, published in French as L'Universite et la Colectivite, Une problematique nouvelle¹¹, stressed that:  

     In the last ten years, the changing process of networking between universities and enterprises has been viewed differently. In 1984 the OECD Report on Industry and University discussed new forms of co-operation and communication.  By 1990 this publication was updated as University-Enterprise Relations in OECD Member Countries. More recently, in 1992, the OECD report Schools and Business: A New Partnership examined 24 case studies of cooperation between business and public educational institutions.  

     The OECD scheme for understanding partnerships in the 1992 report seems to be better adapted to the present and future needs in the Mexican S&T network and university-production system relations. It is worth pointing out some of the ideas discussed in this report: 

II. New Developments of School-To-Work Policies and Its Social Implications 

     The World Bank Paradigm considers trained personnel that become employed by established enterprises as the only measure of successful results. This approach seems to be biased and inadequate for defining success in the Mexican case due to frequent  number of trained people that start or continue a productive activity as self-employed, according to recent fieldwork headed by Geraldine Novelo.¹⁵ 

     In its recent programs for strengthening the National Service for Employment (Servicio Nacional de Empleo, SNE), The Ministry of Labor included a training scheme for self-employment and microindustry. These schemes aim at providing skills for unemployed individuals that have a commitment to developing work activities by themselves or wish to join a cooperative for starting a small production unit.  The program targets individuals with labor experience; its underlying assumption is that in addition to specific technical skills, the trainees should acquire basic information on administrative and accounting procedures for the installation and management of small business.¹⁶ 

     This approach is part of the strategy that seeks to reinforce the Training Scholarship Program for the Unemployed (PROBECAT) in order to make its operation more flexible and give attention to the diverse groups of the unemployed needing specific skills according to their knowledge and experience. The consumer goods production and artisan activities involve millions of indigenous people with cultural traditions rooted in experience with environment and preservation of life, and skills training schemes must respect their own needs. 

      Therefore, thinking about school-to-work programs according to only the needs of modern industry and sophisticated services can be inadequate for the work experience prospects of young Mexicans in indigenous regions, small towns, and villages as well as the fast growing suburbs of metropolitan urbanized areas.  There are more than one million indigenous people living in Mexico City suburbs and at least another million of domestic workers subcontracted by large corporations in the metropolitan areas of Mexico City, Guadalajara, Monterrey and other urban concentrations. 
 

2.1 The Experience of Two STPS Training Programs: Some Results and Needs 

     In the framework of the Modernization of Markets Project, the Mexican Ministry of Labor has promoted the Training Scholarship Program for the Unemployed (PROBECAT) and the Program for Total Quality and Modernization (CIMO)  for training workers already involved in productive activity.  

     Both Programs are within the strategies of the National Program of Training and Productivity 1990-1994 and the National Agreement for Higher Productivity and Quality, signed by the labor, business and rural interests with the federal government in May 1992. The PROBECAT is managed and handled by the State Employment Services (Servicios Estatales de Empleo), offices under the authority of state governments, receiving technical support and financial resources from the Ministry of Labor. 

     The Executive Committees of the State Employment  Services define and select the  priority training areas of each state, regarding the specific needs detected in order to build the links between the employment services, the training system and the productive sector.  Through the PROBECAT, unemployed adults receive training scholarships equivalent to the minimum wage plus some extra money for transportation. The grants last three months on average. The training program can be organized in two ways: school based, that is done in coordination with public or private educational centers, or mixed based, that consists of time sharing in training course between schools and enterprises, where businessmen are committed to hiring at least 70 per cent of the trainees.  

     According to the Ministry of Labor statistics, only 64 per cent of trained adults obtained employment. This means that the school-based program is not successful in getting employment to all trained people.  On the other hand, the mixed base program (school and enterprise partnership) fails to benefit some  30 per cent of all people finishing the training program because employers are obliged to hire only 70 per cent of all trainees.  

     Between 1988 and September 1994, PROBECAT gave 515,782 grants to unemployed workers—73,683 grants annually. It is worth noting that this average will increase by the end of 1994. After the peso devaluation, the Agreement to Overcome the economic crisis signed on January 1995, will provide 700,000 scholarships for unemployed during 1995.¹⁷  During the period 1996-1997 nearly one million workers have gotten PROBECAT grants each year  Yet, did all the adults receiving grants complete the training program? 

     According to a special training program in three regions of Mexico supported by the Ministry of Labor and The National Institute for Adult Education (Instituto Nacional de Educacion de Adultos, INEA) during the second half of 1993, 68 per cent of grantees completed the program, while 32 per cent dropped out.  The employment situation of grantees that finished the training program in the STPS-INEA Pilot Scheme during the first two months of 1994 was not very good. This is partially  explained by the sluggish economic growth.  However, it also seems that even if well trained, the lack of a primary school certificate is still an obstacle to gaining formal sector employment. 

     This assessment is important in order to know the real effectiveness of PROBECAT in providing skills and training for the work-place. It seems, according to an evaluation made by Geraldine Novelo, former director of INEA in charge of the special Pilot Scheme program in Mexico, Guanajuato and Jalisco, that trained workers felt proud of reaching their goals, were better skilled, and gained much self-esteem. At the same time, most of them, felt that they need more training time and would appreciate more basic education, preferably with certification.  Novelo's report notes that the participants suggested that greater financial support be provided, proportional to the number of family members economically dependent  on the grantee. They also recommended more homogeneous groupings in the training activities. 

     Novelo expressed optimism about the pilot scheme, especially the relative success in the state of Jalisco. Some of the grantees had practical training in the work-place; afterwards, they were hired by the same enterprises where they had done their work-study.  Novelo had planned a new project with 200 unemployed with scholarship support, introducing improvements.  However, new political authorities at the National Institute of Adult Education (INEA) in December 1993 decided the project was not important: nothing was done to maintain the training experience started by Novelo.¹⁸  

     It seems relevant to stress this prima facie evidence, proving once more, the weakness of institutional programs in Mexico. Fortunately, the Ministry of Labor has maintained the same official in charge of the training programs from their inception to the present. Especially important for CIMO success and its outstanding multiplier effect in more than 45 medium cities all over Mexico, seems to be the consolidation of the mainstream team headed by the General Directorship for Employment (Dirección General de Empleo). The follow-up of PROBECAT trainees has demonstrated the weak relation between employment and the acquired training. It seems that trained people do not find employment and prefer to seek further training. 

     Those having a job are in activities not related to the skills obtained in the training program according to the evaluation made in the three cases of the Pilot Scheme (Jalisco, Guanajuato and State of Mexico).¹⁹  Nevertheless, the general overview of unemployed individuals that completed PROBECAT Program showed an improved family life and increased self-motivation encouraging the grantees to consider further training. 
 
2.2 Program of Total Quality and Modernization (Programa de Calidad Integral y Modernization, CIMO)²⁰  

     As a chapter of the active policies of employment and training, the Ministry of Labor operates the CIMO Program.  Its goals are to promote cooperation between the private sector and public entities, and to set-up and develop training systems for increasing quality and productivity in micro, small and medium size enterprises. CIMO is a decentralized, comprehensive, regional, and flexible program; it incorporates feed-back participation and cofinancing in order to support training within private firms. CIMO targets micro, small and medium-sized firms as they represent the majority of Mexican units and provide most of the employment in Mexican economy. 

     Through CIMO, these firms are supplied with methodical support and shared financial resources to develop training programs for currently-employed workers in order to improve quality, productivity, and competitiveness.  At the same time, there is special support for developing consultant programs on quality, productivity and gaining access to industrial and market information services. 

     CIMO facilitates the networking of enterprises with financial institutions such as NAFIN (National Bank for Development Promotion), SECOFI (Ministry of Trade and Industry), CONACYT (National Council of Science and Technology), BANCOMEXT (National Bank for Foreign Trade) and others.  All these actions foresee strengthening small and medium scale enterprises in order to maintain employment, raise human capital investment and develop training culture in quality and productivity. CIMO works through Training Promotion Units (Unidades Promotoras de la Capacitación, UPC) that are located in each region of Mexico. 

     The UPCs are set up inside the entrepreneurial organizations at state and local levels. The Training Promotion Units are in charge of dissemination of  CIMO activities among enterprises and handle the support to all regional firms. Decision making within the UPC is  done through local executive committees, an entity formed by the UPC with the involvement of CIMO promoters and local business representatives. The Ministry of Labor (STPS) operates through the General Direction of Employment (Dirección General de Empleo), but the institutional linkage with STPS is the Promotion and Support Unit (Unidad de Promoción y Apoyo, UPA),  a private consulting firm.  The UPA carries out the programs with STPS guidance under UPC decision making.²¹ 

     Financial partnership is another key feature of CIMO Program.  Business organizations provide the installations and infrastructure for UPC offices. Businessmen participating directly in training programs pay the cost of training experts, the leasing of the house or  space where the activities take place and necessary equipment, among other items. STPS pays the salaries of promoters and economic support of UPA consultants. The interesting thing about CIMO shared sponsorship between private and public sectors, is the proportion of training costs paid by the private sector. After almost 6 years of the CIMO Program, most of cost proportion still depends on STPS, but the idea is to have a gradual growth of financial firm participation in training programs.  

     By September 1994 there were 48 Training Promotion Units in the same number of small and medium size cities having the active cooperation of nearly 300 local business chambers. The executive committee in each region must accomplish the following functions:  
 

     In order to improve the quality and to spread the coverage of the training schemes, CIMO and PROBECAT are providing supplementary equipment and machinery to the training centers. According to information from the Ministry of Labor, during the 1993-1997 period, machinery and equipment was allocated to 300 technical centers that participated in PROBECAT.  
 

III. Mexico's Socio-Economic Structure and the Role of the Informal Sector  

     For the assessment and recommendations regarding the Mexican training programs it seems relevant to look at macro-economic features that are impacting sectorial policies such as training schemes. One of these features is employment structure. For example, one  tendency is related to the increased number of workers with no benefits. By the beginning of Salinas administration (1988) there were 3,500,000 workers without benefits but in August 1994 the number almost doubled, reaching 6 million workers.  

     The Mexican phenomenon of an increasing number of workers with no benefits has different explanations. It seems primarily due to the large number of micro-enterprises, many of them family workshops and subsistence activities related to services and supply of basic goods. There has been significant growth of the informal sector. This is not necessarily non-registered business, but rather a kind of parallel economy with under-estimation of activities and output.  The number of formal micro-industries in Mexico doubled between 1988 and 1993; in 1988 there were 121,244 firms and by 1993 the number had doubled to 244,214. The number of informal employees increased from 364,929 to 648,459 in the same period. 

     It is worth noting that informal workers do not stay as such because they disregard the law  or have the intention of breaking government regulations.  On the contrary, all recent discussions in Latin America or Mexico²³ have argued against the inefficiency of bureaucratic governments and the endless corruption surrounding formalization of small business, that led a wide number of producers and small business to leave the formal sector.   

     An important part of workers employed in small and micro business earn insufficient formal sector salaries and therefore come to depend on the additional earnings in extra-employment, mainly in informal activities. According to the National Institute of Statistics, Geography and Data Processing (INEGI) the people in this situation reached 2,300,000 in August 1994. At the same time, workers that have no work and stay at home waiting for a better opportunity—many of them women—are nearly 2 million. 

     Another phenomenon in recent years relates to salary shortage. The number of professional and technical people working free-lance in the services market increased from 344,002 in 1988 to 664,308 persons. A very similar tendency has been observed in educational and health services.  

     There seems to be a world wide tendency towards precarious employment, i.e., the diminishing of long-lasting work agreements and a weaker role of trade-unions for collective bargaining. Instead, the agreements are for short periods, normally for specific tasks with limited duration. This agreement framework has impoverished or eliminated the traditional work benefits and the aid schemes.²⁴ 

     During the last 10 years, many Mexican workers have responded to lack of well-paid employment by integrating themselves into a growing informal sector that in its diversity of faces, seems to be the real transformation that has taken place in the Mexican economy. To understand the new predominance of informal activities, it is more reasonable to speak of a wide parallel economy influencing most of what is happening in the formal economy. 

     This means that providing educational services to youth and adults does not always imply the integration to formal work and its needs. Rather, the more likely integration of many young people is closer to informal markets in combination with certain links to formal employment in spite of training and skills acquired to be hired in formal employment. In other words, recent data suggest that many of the new "wage-earners" in Mexico are or will be laboring in micro and small business, or self-employed.  

     These patterns of employment organization and the wide system of informal activities in a context of low and stagnant salaries must be taken into consideration when planning training programs and other schemes related to better skills and qualification for Mexican workers in micro and small scale industries, units normally characterized by poor schemes for worker fringe-benefits. Due to salary policies in Mexico, most personnel with scarce skills make between one and two minimum wages.  Before the December 1994 devaluation, this was about 250 U.S. dollars per month if two minimum wages were earned. 

      At present, as can be observed in the employment structure, there is no motivation for many potential workers to integrate to formal jobs because the average informal activity provides more earnings than any non-qualified formal job or even certain skilled employment. In addition, workers who gain more skills and qualifications in micro and small industry could disturb work stability because they may prefer to migrate to larger industries, where they can earn better salaries due to new skills obtained in training courses. 

     Historically, small industry has been considered the "training place" for skilled labor needs in big corporations. Government wage policy does not allow firms to freely determined their employees salaries.  This means that recently trained workers with new skills will not earn more in the short-term.  On the other hand, medium industries in many branches and regions will not be able to pay more than 3 or 4 minimum wages per worker with the possible exception of certain in-bond industries (maquiladoras) on the northern Mexican border. 

      The key answer for newly trained workers who are either unemployed or underpaid  could be to create a solid framework of financial support to enable them to start small businesses via provision of managerial and marketing skills.  A coherent policy with the current pattern of global integration can be to encourage the creation of micro-enterprise networks for obtaining credit, for buying or selling, for building up a collective capacity to subcontract with big firms and transnational companies.   

     Other recent research findings point out that the majority of young people between the ages of 17 and 20 seeking employment  do not have complete elementary school and  are thus not hired. According to the Instituto Tecnólogico Autónomo de México (ITAM) there must therefore be substantial changes in the Federal Labor Law (Ley Federal del Trabajo) with the goal of extending learning agreements for young people arriving at adulthood. The current Federal Labor Law prohibits apprenticeship arrangements.  Due to the inadequate training structure and the law prohibiting apprenticeships, increased bottlenecks can be observed in many industrial branches resulting in a scarcity of qualified labor. 

      If a comparison is made between primary school and secondary school students, it is found that there is one secondary student per three primary students, but there exist a significant proportion of secondary students that fail to finish the 3 years of secondary school.  In addition, most of the students enrolled in Preparatory School (normally 3 years after completion of secondary school), are in traditional programs not related to technical or industrial  training.  Traditional programs in secondary and preparatory schools have been conceived with the idea that most students will continue study until getting a university degree.  However, statistics reveal that less than 10 per cent of students registered in elementary school will get a place in higher education. 

     Only 19% of the labor force in micro, small and medium enterprises have received training courses. The main structural problem of the whole system of technical education and training for work seems to be rooted in the misconception of the vocational approach which defines specific skills in relation to a concrete job classification when rapid technological change is demanding flexible formation with a solid general education. 

     Another structural problem is related to the lack of incentives from many enterprises to encourage labor formation. According to a survey applied to a selected sample of business leaders in 1990, many did not agree with the idea that workers who receive training that increases productivity are entitled to increased salaries or benefits.²⁵  

     These structural problems are coupled with an adjusted macroeconomic policy based on relative frozen salaries.  As a result, in the 1988-1989 period the rate of drop-outs was 30 per cent and the overall level of terminal completion was an average 37 per cent. This means that at least two thirds of people who have applied for technical education and training for work were drop-outs. In this context,  the idea that "federal and state campaigns should be developed, aimed primarely at school teachers and young people, in order to disseminate awareness of the positive benefits that Mexico could derive from science and technology education"²⁶ seems entirely insufficient. 

     While there indeed are some negative attitudes towards S&T, the main reasons are rooted in the pattern of Mexican social and economic development. The tertiarization of the economy and lack of endogenous production efforts explain why more than two thirds of those taking training courses recently were concentrated in "expertise of services sector, mainly administration, accountability and computer skills"²⁷ 

     The rate of growth of the national economy has been rather weak, an average of 1.5 per cent during the 1993-1994 period; and it seems that at least until the end of the first semester 1995, the Mexican economy will be growing slowly and possibly stagnant if stability suffers the contradictions of Mexican political cycle. This scenario seems to be very inconsistent for increased training demand. 
 

IV. Policy Recommendations in the Mexican Case and Possible Implications for Other Countries   

     One of the key questions in training policies relates to the incentives of wage and salary policies for better motivation in obtaining higher levels of skills and qualifications. In order to respond to new requirements in relation to labor force profiles, qualitative changes are needed, not only in workers formation but fundamentally in the managerial staff involved in more flexible forms of entrepreneurial administration. A decisive factor in the current globalization process is the systematic up-dating of instructors and curriculum planners in order to adapt studies and technical knowledge to the new demands of production. 

     In the Mexican case, it is critical that teaching personnel in technical institutions start to have short internships in factories and to interact with the the production staff. Through the CIMO Program some of these tasks have been done, as well the appointment of  experts as temporary trainers. In this new framework, technical formation institutions are seen as means for supporting the increase of production and productivity. 

      This is why a wide number of services that stand apart from training, such as busines consultant, technical assistance, specific productive tasks and technological dissemination, have become a crucial backbone for the production of competitive goods and services. A progressive transfer of training responsibility towards Mexican firms can be observed, but it is worth noting that micro enterprises (92% of total units, less than 15 workers per unit) have insufficient financial resources to support training schemes.  The suggestions for research and development in the private sector, especially those proposed by Galli, Terrones and Garcia de Alba during the review meeting of OECD examination of Mexican science and technology policy, could also be applied to training programs.²⁸  Even in the small manufacturing sector (from 16 to 100 workers), it is not feasible to sustain self-financed training schemes, especially in recent times when the trade liberalization and a weak internal market sent thousands of small businesses to bankruptcy or the informal sector. 

     In this complex scenario it is fair to recognize the important effort of the Mexican authorities, especially at the Ministry of Labor in establishing CIMO. This seems to have been a successful training program for active workers, mostly from small companies in 48 cities of Mexico. At the same time, the CIMO Program has facilitated the emergence of a wide number of small firms that provide training services and quality control consultant to small and medium enterprises. 

     The international experience in several countries—as has been shown by the Mexican case—demonstrates that the creation of an appropriate policy of human resources development is insufficient; it must be articulated with adequate macroeconomic conditions that are decisive for investment, trade and technological policies, among other important factors that put pressure on enterprise performance.  There are several goals that have to be reached in Mexican firms, depending on the size and economic sector of which it is a part. Some of these tasks are already in process, and others should be started soon.  

     In the Mexican case and many other developing countries in transition to more industrialized economies, educational policies have to be discussed according to regional development and social needs of millions who lack skills, means of production and basic services or where the quality of these services are far from responding to real demands of modernization. In this approach, the OECD's  recent report on Mexico stresses: "training programs should take into consideration the peculiarities of Mexico's culture and economy, rather than be simple imitations of the American business school".²⁹ 

     Furthermore, a mechanical adaptation of educational policies to "skills and training" demanded by "market forces" or an apparently neutral "work-place" will reproduce high inequality already existing in income and social welfare distribution in Mexican society. Education should in general attempt to complement in-service skill development rather than substitute for it. In other words, it should stress first and foremost the development of "trainability" rather than specific occupational skills. In this regard, Mexican training centers and in general all the policies that emphasizes specific skills should get closer to on the job training experience with a reinforced apprenticeship system. 

     In the Mexican case, for the lower-level industrial-vocational occupations, there should be a division of labor, with the contribution of schools limited to basic education, "trainability" and vocational guidance.  It is important to recognize that all too often resources are committed to pre-employment training on a massive scale with no systematic evaluation. 

     In this regard, educational policies and school-to work transition have to be planned and evaluated according to the idea of breaking the vicious circle of poverty and negative social mobility in at least half of the Mexican population. This approach will mean looking very closely at the "skills and technological knowledge" needed by small enterprises in specific regional settings such as artisan family work-shops in urban and rural areas. 

     The North American Free Trade Agreement (NAFTA) framework will encourage the growth of salaries in Mexico and diminish the economic distance between Mexican and North American labor. If a constant pace is kept in better salary conditions of Mexican workers, the tendency of workers to improve skills and qualifications will grow very fast and the training schemes will have to enlarge their regional coverage.  To expand industry and attract foreign business in NAFTA framework, Mexico must foster vocational and technical training at upper secondary and post-secondary levels. 

     At the same time, a special system, supported by industry and government, would seem to be advisable. Especially important are incentives to encourage training in the workplace.³⁰  According to a recent UNIDO study, by 1995 some new 600,000 new jobs would be created; wage rates would rise under United States pressure to reduce differentials. The 1995 peso devaluation undermined the Mexican wages and slows down the speed of economic integration, putting more pressure in tighted financial agreements impacting growth rates.  

     Over the long term, NAFTA should encourage both government and business to pursue further reforms to increase Mexican industry's competitiveness.  The UNIDO study points out that the growing need for efficiency in the face of mounting foreign competition is prompting many Mexican industries to rationalize their operations and adopt labor-displacing production techniques. As a result, manufacturing employment has shown signs of contracting since 1991 with the exception of assembly factories in the northern border.³¹ 

     As stressed in the first pages of this paper, Mexican modernization is showing the paradoxes of globalization and labor—better salaries but less employment, more efficiency and productivity to supply the world market but a relatively stagnant and weak domestic market. This is even more clear, after the peso devaluation in December 1994.  In order to improve the positive results obtained by CIMO Program in the 1988-1991 period vis a vis the 1992-1994 period, it was necessary to rebuild some aspects of team organization and management of training programs according to the 4-year experience. The 1995 challenge has been to take into account the expected low rates of economic growth. 
 
 
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Biographical Notes