Local content – solutions from a local business perspective

  • 7 February 2025
  • Posted by: Trudi Stevens
  • Category: energy excellence
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We believe that skills and local businesses are the most important because they are the foundations of every nation’s economy, growth and governance. If the Local Content policy is to be effective and is to be meaningful then it must increase employment and must build the capacity of local businesses.

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Increasing employment

Businesses will employ people who they believe will add value to their products and services, who will manage the resources of the business so it makes a profit. In return, they provide a wage and benefits.

However, those who are at the start of their working life or who have changed the sector they used to work in (leaving the military for example, or someone re-training to a new industry because the previous industry is shrinking) may not have the skills and experience that the business is looking for. This has been true for as long as humans have traded with each other. The solution is as old and continues to this day – businesses employ people who have not yet developed the skills and experience that they need in exchange for compensation.

There is a misguided belief in parts of the Education and Government system in many countries that businesses should employ less qualified and skilled people, at their own expense, for the greater national good. I disagree. The primary purpose of any business (including my own) is to make a profit. It is reasonable to demand that businesses operate within the law, behave like good neighbours and operate in a sustainable, environmentally friendly way – at the business’ expense. It is not reasonable to ask businesses to employ large numbers of people who cannot add value to the business in the short term.

However, the solution is two-fold:

1

The education system produces students who are ready to work and who bring the most up to date and comprehensive knowledge required by businesses, many of whom are run by people who left education decades previously.

2

The Government creates an exchange system whereby businesses are reasonably compensated for employing people lacking in the skills and knowledge required and providing them with opportunities to bridge that gap.

The Apprenticeship system

Medieval Europe

The medieval system of apprenticeships was a structured framework for training and education in various crafts and trades, prominent in Europe during the Middle Ages. It was typically governed by guilds, which were organisations of artisans or merchants overseeing standards, training, and commerce in their respective industries:

  1. Entry: young individuals, often in their early teens, would enter into a formal agreement with a master craftsman to become apprentices. This contract was sometimes negotiated by the apprentice’s family. The family would sometimes pay the master craftsman to take their child on an apprenticeship.
  2. Training: apprentices lived and worked with their masters, learning the trade through hands-on experience and direct instruction. The training period often lasted several years, commonly 5-9 years.
  3. Living conditions: apprentices were provided with food, lodging, and basic necessities but were typically not paid for their work during this period.
  4. Master-apprentice relationship: masters were responsible for teaching the skills of the trade while also instilling discipline and ensuring moral behaviour.
  5. Progression: after completing the apprenticeship, individuals often became journeymen, allowing them to work for wages and travel to gain further experience. Eventually, they could apply to become a master by producing a “masterpiece” that demonstrated their skill.

Nigeria

The apprenticeship system practiced by the Igbo (Ibo) tribe of Nigeria, often referred to as the Igba-Boi system, is a traditional framework for skill acquisition and entrepreneurial mentorship. It has been a cornerstone of economic and social mobility within the Igbo community.

  1. Initiation: young individuals, often boys from less privileged backgrounds, enter into an agreement with a successful businessperson, typically through family connections or community ties. This agreement is rooted in mutual trust and cultural values.
  2. Training: apprentices work under their mentors, learning the trade (e.g., commerce, manufacturing, or other business skills) through hands-on experience. The training period usually lasts several years, often between 5 and 7 years.
  3. Responsibilities: apprentices assist their mentors in daily business operations, gaining practical knowledge while also demonstrating discipline, loyalty, and hard work.
  4. Master-apprentice relationship: mentors act as both teachers and guardians, providing guidance, oversight, and sometimes even accommodation for their apprentices.
  5. Settlement: upon completing the apprenticeship, the mentor settles the apprentice by providing capital, goods, or other resources to help them establish their own independent business.

Germany

The German apprenticeship system, known as the dual education system (Duales Ausbildungssystem), is a structured and highly regarded framework for vocational training. It combines classroom-based education with practical, on-the-job training and is a cornerstone of Germany’s strong industrial and economic performance.

  1. Dual structure: apprentices split their time between vocational schools (Berufsschule) for theoretical instruction and companies where they receive practical, hands-on training.
  2. Diverse opportunities: it covers a wide range of professions, from skilled trades and technical roles to administrative and healthcare fields, with over 300 officially recognised training occupations.
  3. Duration: apprenticeships typically last between 2 and 3.5 years, depending on the occupation and the individual’s educational background.
  4. Employment contract: apprentices sign a formal contract with their employer, outlining wages (training allowances), working hours, and responsibilities.
  1. Certification: at the end of the program, apprentices take exams administered by chambers of commerce or crafts (e.g., IHK or HWK). Successful completion earns them a recognised qualification.
  2. Industry involvement: employers play a key role by designing training programs and offering placements, ensuring that apprentices acquire skills relevant to the job market. The Chambers of Commerce are responsible for advising companies, implementing and supervising training, decide what skills and knowledge will be contained within qualifications and create occupational profiles. The Trade Unions monitor the welfare of the Apprentices and work with employers to make sure good quality training is maintained.
  3. Government support: the system is regulated and supported by federal and state governments, ensuring quality and consistency across sectors.

The factors that lead to the German success:

  • Outstanding cooperation and communication between employers, Chambers of Commerce and the Vocational Schools;
  • Little Government interference except to provide enabling policies through taxation and finance;
  • No input from the Department of Education except through their TVET policy at primary and secondary level of schooling.
Vocational education

The biggest single cause of poor vocational education design that I have experienced is where the Government tries to design the Apprenticeship system, usually using Education consultants with backgrounds in academia and the School system. Any consultation with the business sector is usually carried out with arm’s length quangos made up of large corporations who have the money to invest in public relations with the Government. The voice of smaller businesses is not heard.

Vocational education is completely different to classroom based education. This is a diagram I drew to outline the connections good vocational education consists of, drawn up for a vocational education centre in an East African country that is also developing its oil and gas sector:

The role of local businesses in the apprenticeship system: local content perspective

Local businesses are crucial in designing, implementing, and sustaining effective apprenticeship systems. Their roles include:

1

Advising companies
Local businesses guide each other in establishing robust apprenticeship programs, sharing best practices, and fostering a culture of mentorship. They ensure training aligns with real-world business needs and market demands.

2

Implementing and supervising training
Companies play an active role in delivering practical, hands-on training. They supervise apprentices’ day-to-day activities, ensuring the skills taught are relevant to the business’s operational goals and industry standards.

3

Defining skills and knowledge in qualifications
Businesses help shape the curriculum and qualifications by identifying the key skills and knowledge required for specific roles. This ensures apprenticeships are tailored to current and future industry demands.

4

Creating occupational profiles
Local businesses collaborate with industry bodies to develop occupational profiles that define the tasks, competencies, and responsibilities of different roles. These profiles guide training content and evaluation criteria.

The importance of local businesses in local content policy
  • Increasing Employment:
    Businesses hire apprentices to bridge skill gaps, ensuring long-term value for both the business and the economy. However, they need government support, such as tax incentives or training subsidies, to balance the costs of training unskilled workers.
  • Building Local Capacity:
    Apprenticeships empower local businesses to upskill their workforce, fostering entrepreneurship and self-reliance. For instance, models like the Igbo Igba-Boi system demonstrate how mentoring and resource provision can transform apprentices into independent business owners.
Best practices from Germany’s dual education system

The success of the German apprenticeship system highlights the importance of collaboration between businesses, chambers of commerce, and vocational schools, with minimal government interference. Key factors include:

  • Industry-led training programs tailored to market needs.
  • Effective communication among stakeholders.
  • Supportive government policies focused on enabling, rather than controlling, vocational education.

Local businesses are the cornerstone of any effective apprenticeship system. By actively participating in designing, implementing, and supervising training, they ensure apprenticeships remain practical and valuable. Governments and educational institutions must collaborate with businesses to create systems that address local economic needs while supporting businesses in their role as key drivers of skill development and employment.

Empowering local talent for sustainable growth

At Future Energy Partners we believe in the importance of developing local skills and capabilities. With decades of industrial experience combined with academic achievement, we assist policymakers in defining Local Content Policies and ensuring their successful implementation.

Our expertise enables us to deliver bespoke training solutions that empower individuals and organisations alike. We recognise the value of not only building technical knowledge but also fostering the softer skills essential for success—teamwork, career growth, performance management, and conflict resolution.

We are dedicated to unlocking local potential. To find out how we can support you, contact us today.

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