Vocational education and training (VET) in transition

Executive summary

The green transition: A familiar challenge, in unfamiliar form

Vocational education and training (VET) have always had to change. Qualifications go out of date; new occupations emerge; skill requirements shift. The institutional mechanisms for managing this – qualification reviews, employer consultation, teacher development, adult learning provision – were designed precisely to keep training aligned with labour market realities.

The green transition is not a new challenge so much as a severe stress test of those mechanisms. It is expanding some sectors and contracting others, adding new occupations, and transforming task and skill requirements across a wide range of existing jobs. The drivers include both policies and technologies, making future development hard to predict. And at the same time, VET systems are also contending with digitalisation, demographic shifts, and persistent teacher shortages. This paper explores the tools VET systems rely on to adapt to these demands.

What the evidence reveals

Drawing on labour force survey and job vacancy data from OECD countries, a policy questionnaire completed by 27 Member countries and subnational territories, and an in-depth study of Finland, this policy paper maps where VET systems are well placed to respond to the green transition challenge and where they are falling short. It demonstrates that:

VET graduates are at the centre of the transition: Nearly one in four young upper-secondary VET graduates already works in an occupation transformed by green activities, a higher share than among university graduates. But around 8% work in greenhouse-gas-intensive jobs likely to contract, compared with just 2% of higher education graduates. No other group is simultaneously this exposed to green opportunity and this concentrated in the jobs most at risk.

Where are the gaps in VET systems adaptation and how to address them?

The green transition requires VET systems to adapt in three ways: i) develop and update qualifications and programmes, ii) equip teachers and trainers to deliver them, and iii) reach the current and prospective learners who would benefit from the training. This paper identifies the specific policy challenges in each of these policy dimensions and proposes tools that can address them.

Designing qualifications that keep pace with change

The first dimension relates to the tools and mechanisms available to rapidly identify skills needs arising from the green transition and to adapt VET provision accordingly. The most widely reported challenge across OECD countries is that qualification update processes are too slow and complex to keep pace with green innovation. Translating an emerging skill need, such as competences in hydrogen systems or heat-pump installation, into a recognised qualification can take years, by which point employer needs have often moved on. Three reforms make the biggest difference here.

• The first is investing in skills anticipation that feeds directly into decision-making. Regular forecasting provides the long-run view while targeted sectoral studies capture fast-moving change. The combination of quantitative labour market data and qualitative inputs from employers and experts is consistently more influential than either alone. Crucially, forecasting is only valuable if it is institutionally connected to the development and update of VET qualifications, a link that many countries have yet to formalise.

• The second is building faster feedback mechanisms into qualification systems. Apprenticeship-based systems achieve this naturally, since employers shape training content directly. Locally adapted curricula can address emerging skills needs before national qualifications are updated. Coordinated action by various stakeholders can also help adjust training provision and develop qualifications for emerging occupations and rapidly evolving skill needs. Al-assisted qualification review offers further potential to lower the cost and time of routine revisions, though it works best as a complement to expert judgment, not a substitute for it.

• The third is embedding strong foundational skills across all VET programmes and strengthening pathways to advanced learning. Technical, STEM and managerial competences – underpinned by solid foundational skills – are particularly relevant to green jobs where the green transition generates demand for new skills, and reinforcing these in mainstream VET can expand the pool of candidates for these green jobs. Sustainability competences, such as environmental awareness and knowledge, are cross-cutting and should be integrated into all VET qualifications. As green jobs increasingly require skills beyond upper-secondary level, the growth of STEM-oriented higher VET aligns well with areas of rising labour market demand.

Investing in VET teachers and trainers

The second dimension relates to VET teachers and trainers in companies, as VET aligned with the green transition cannot be delivered without teachers and trainers who are themselves familiar with green innovations. This is the challenge countries most consistently identify as their binding constraint. Addressing it requires revisiting job entry requirements for VET teachers as well as providing targeted in-service training.

• VET teachers are often recruited from industry but, over time, their technical knowledge drifts from the frontier. Part-time teaching by professionals from relevant sectors combined with sustained professional development, structured around industry partnerships can bring the required skills into the VET teaching profession. For sustainability competences specifically, which may not yet be embedded in workplace practice, a different approach is needed. This includes dedicated training enabling VET teachers and in-company trainers to understand sustainability issues and integrate environmental content across subjects.

Reaching individuals and supporting transitions

The third theme concerns current and prospective workers. Even well-designed qualifications and up-to-date programmes and capable teachers cannot drive the transition if those who need training most do not participate. Addressing this challenge requires changes on two fronts.

• The first is flexibility in how training is structured and recognised. Employer-led training can rapidly address emerging skills needs but may not be formally recognised within VET qualification systems. Modular and micro-credential approaches, allowing workers to acquire specific competences without completing full qualifications, are expanding across OECD countries – particularly in the health sector – and could potentially be applied to green occupations where shortages arise and where workers often need to add or update a targeted set of skills rather than retrain entirely. Their effectiveness depends on employer recognition: modules that are not valued in hiring decisions will not attract learners. Financial incentives, such as the voucher systems, can raise participation, though evidence on their sustained impact is still limited.

• The second is information and guidance. Many prospective and current workers lack clear information about green job opportunities, the skills they require, and the training pathways available. Career guidance services in some countries have been slow to integrate green labour market content systematically. Where they have done so, the result is a more accessible map of the transition for individuals trying to navigate it. Skills assessment tools that identify transferable competences add further practical value by helping workers and career advisers see what existing skills already align with green job requirements.

The paper is designed as a practical tool for VET policymakers and national experts on how to adapt their VET policies to the green transition. It is structured around the six specific VET policy challenges, explains the evidence behind each, and maps the range of policy responses countries are using, with attention to which tools work in which contexts.

The broader implications reach beyond the green transition. The reforms that make VET systems more responsive to green change are the same reforms that will make those systems more resilient to whatever structural pressures come next.