Looking to Germany to reduce graduate unemployment and close SA’s skills gap

There is a great deal of evidence to suggest that South Africa’s higher education system has become decoupled from the needs of its labour market.

Statistics South Africa (Stats SA, 2024) reports that the unemployment rate among those aged 15-24 is over 60%. While graduates fare better than those without tertiary education, graduate unemployment still sits between 10 and 15%, representing tens of thousands of young people who invested in higher education but remain jobless.

While more young people hold degrees, employers increasingly report graduates lack workplace competencies — especially in problem solving, communication, teamwork or digital literacy (HSRC, 2021).

A World Bank enterprise survey found that 70% of South African employers consider that universities are not producing the competencies that companies need. The Council on Higher Education similarly warns that the system is producing “credentialed but not always competent” graduates, undermining both social mobility and economic productivity.

There are a range of structural factors backed up by sound research that go some way to explaining this gap.

Firstly, and most fundamentally, South Africa’s slow rate of economic growth means that even where graduates may be adequately trained, limited economic expansion restricts the number of quality entry-level jobs.

Secondly, South Africa’s underperforming basic education system means that tertiary-level applicants start off with poor foundational skills especially in mathematics, science and language, and this undermines their performance and success when entering the higher education realm.

Employers poorly represented

Thirdly, employers remain very poorly represented when it comes to the development and design of tertiary level qualifications. As a result, many courses have not been revised for long periods of time and remain largely focused on theory with very little practical application.

Fourthly, as acknowledged by the Council on Higher Education (2022) “work-integrated learning is inconsistently applied and often left to students to arrange themselves”. It is not uncommon that work integrated learning is more of an add-on than a fundamental part of the learning process that structurally binds theory and practice.

Given this context, the core policy question is whether South Africa can redesign its higher education pathways to produce graduates who are both academically capable and work ready.

It is useful to look beyond South Africa’s borders for models that better integrate education and work. Among international approaches, few have achieved such systemic alignment between learning and labour-market needs as Germany’s frequently cited dual system.

The German “Duales (dual) System” has succeeded in maintaining one of the lowest youth unemployment rates in Europe — 5.7% in 2021, compared with 16.6% across the European Union (ILO, 2022) — by ensuring that learning happens simultaneously in the classroom and the workplace.  

The German dual system has roots in the medieval apprenticeship traditions of guilds and crafts, where young people learned directly under master artisans.

After World War 2, Germany rebuilt its economy around strong industrial policy, which included deliberate investments in vocational education and training. The philosophy was simple: theory without practice is insufficient, and practice without theory lacks adaptability.

Formal partnership

The system was institutionalised through a formal partnership between the state, employers and chambers of commerce, resulting in a robust national framework.

The enduring idea behind the dual system is that education and work should not be sequential, but simultaneous. Students are not expected to first complete years of classroom study and then enter the labour market with little practical experience. Instead, learning occurs in two synchronised places: the classroom and the workplace.

For vocational apprenticeships, this typically means three to four days per week in a company and one to two days in school. Higher education dual-study programmes follow either a similar blended schedule of office and campus time every week, or students alternate between longer academic blocks and extended work placements.

The level of employer involvement in the system is high. Companies help design curricula, provide workplace mentors, and contribute to assessments. This ensures that training keeps pace with technological and sectoral changes.

And industry associations, like the chambers of commerce (“Industrie und Handelskammern”) certify company trainers, accredit firms to host trainees, and administer national vocational examinations. This creates consistency and trust across the system.

Funding of tuition is covered by the state in the case of public universities while companies cover stipends and in-house training costs. But many employers opt to partner with private universities for dual study programmes where they cover the tuition costs to leverage the flexibility, customisation and responsiveness that these institutions provide.

Employers also value the international orientation and innovative teaching methods that private universities frequently emphasise, particularly in areas such as digitalisation, global business and leadership development.

But whether they qualify through public or private institutions on completion, graduates receive nationally recognised qualifications that are portable across industries.

The result is a system in which education and employment are interdependent, ensuring that graduates enter the labour market ready to contribute productively from day one.

South Africa of course lacks many of the core systemic conditions that have made the German dual system as successful as it has been. Still, there are valuable lessons in how the dual system embeds employer co-ownership, consistent standards, and workplace learning. These principles — if adapted thoughtfully — could inform South Africa’s evolving higher education reforms.

Some experimentation with the German dual system has already taken place. In the vocational space this incudes:

• The Dual System Pilot Project launched in 2013 by the Department of Higher Education and Training in collaboration with the Swiss–South African Cooperation Initiative, which tested a model where apprentices in trades such as plumbing and electrical work divided their time between Technical and Vocational Education and Training (TVET) colleges and structured company placements. Evaluations established that The Dual System Pilot Project participants had higher employment rates and stronger practical skills than those from traditional college-based pathways.
• The Southern African-German Chamber of Commerce and Industry has partnered with German companies operating in South Africa (such as BMW, Volkswagen, and Siemens) to run apprenticeship-style programmes where trainees split time between classroom learning and in-company training.
• The Deutsche Gesellschaft für Internationale Zusammenarbeit programme, which has sought to strengthen governance, management and workplace-based training capacity in TVET colleges, particularly in fields such as renewable energy and sustainable construction.

Several lessons have emerged from these pilot projects, which include the lack of capacity — resources, experience, trainer skills, governance — of TVETs to deliver high quality programmes. Further it has proved difficult to break the stigmatisation of vocational training as a “second best” option to a university qualification.

In the case of tertiary academic education, the Dual Higher Education Project launched in 2020 with funding from the Department of Higher Education and Training has involved several universities in the Western Cape. It has focused on three areas - curriculum transformation, strengthening university-industry partnerships and policy and capacity building.

Estian Behrens, the Dual Higher Education Project Project Director, summarises the initiative’s ambition: “By piloting Department of Higher Education programmes with a number of our public universities and with the support of the Department of Higher Education and Training and Council on Higher Education, we have created a model that is not only relevant to the South African context, but also responsive to the evolving needs of the labour market on a global scale.”

Despite these positive steps, the Dual Higher Education Project also illustrates the difficulties of moving from theory to practice in the South African context. These difficulties include small pilot projects and pressures on public universities around funding, experience, staffing and curriculum renewal that constrain the pace and flexibility to effect change and reform.

These experiences demonstrate both the potential and the complexity of scaling dual education in South Africa: while the benefits are clear, success will depend on systemic alignment, institutional capacity, and sustained partnership with industry.

Future steps

The German dual system offers lessons, not a blueprint. It is not a panacea for all scenarios, and as argued, it cannot be transplanted wholesale into South Africa. Its success in Germany rests on a very particular set of factors, and South Africa’s realities are indeed different.

What is arguably needed is a careful process of adaptation — embedding the principles of employer co-ownership, structured workplace learning, and nationally trusted assessment within a locally feasible design that addresses the country’s economic structure, schooling foundations and institutional realities.

Furthermore, the case for implementing an adapted form of the dual system is greatly strengthened by the rise in artificial intelligence, automation, and data-driven business models which increasingly demand hybrid skill sets — technical competence combined with human-centred capabilities such as critical thinking, creativity and ethical judgement.

Adaptation will of course not happen automatically. Success will require bold partnerships between the government, universities, employers and civil society, targeted funding, and a clear commitment to measurement and accountability.  

Key to this will be partners who are willing to experiment with new approaches and co-create models of learning that combine academic rigour with practical application.

Ultimately, reimagining South Africa’s higher education system through work-integrated models is not just an educational reform — it is an economic imperative. If executed well, it could transform a generation of credentialed jobseekers into capable contributors. DM

Prof Dr Nils Finger works at CBS International Business School, one of Germany’s leading universities for dual education with a strong focus on business, where he leads a project to bring the dual study model to South Africa. Geoff Schreiner is the Head of Business Studies at the Cornerstone Institute and a Director of Performance Solutions Africa. He writes in his personal capacity.