Unconstrained Capital? Multinational Companies in Collective Skill Formation Systems

Internationalization and increasing (capital) mobility put coordinated capitalism in general, and collective skill formation in particular, under severe stress. “Beneficial constraints” are loosening, partly due to the influx of multinational companies (MNCs) not anchored in the institutional environment of their host countries. This research project first examines how public actors, more specifically sub-national, cantonal authorities in Switzerland, deal with the problems of increased internationalization in collective training systems and try to push MNCs to participate in dual vocational education and training (VET). Not all cantons in Switzerland are equally affected by internationalization. The cantons of Zug and Zürich are both home to a substantial number of MNCs. While being exposed to quite similar challenges of internationalization within a common VET system, Zug and Zürich show surprising variance in their policy solutions to include MNCs. While Zug clearly tries to convince MNCs to participate in a VET scheme particularly created for and aimed at such firms’ specific needs, the logic behind MNC integration in Zürich appears more obscure. There are reasons to believe that some MNCs in Zürich participate in dual VET due to their dependence on a supply of foreign (non-EU) workers and therefore cantonal authorities. Consequently, the second goal of this project will be to examine the reasons for policy divergence in integrating MNCs and therefore tackling the issue of internationalization and loosened beneficial constraints. Why does Zug take the road of increasing firm-orientation, while Zürich seems to coerce MNCs into its conventional skill formation system? Methodologically, I apply process tracing to trace the mechanisms that pushed the cantons towards diverging policy reactions. First, I examine the extent of variation in my dependent variable (i.e. the policy solutions to integrate MNCs into VET) through interviews, government documents, as well as newspaper articles and literature research. Second, I trace back mechanism(s) from my known outcome to uncover plausible explanatory factors. A main hypothesis is that higher business power in the canton of Zug is responsible for policy divergence. While both cantons’ economic landscape is shaped by MNCs, the specific profile of those MNCs differs. Zug’s tax policy is specifically aimed at companies that predominantly yield profits outside Switzerland and only relocate their headquarters (or European headquarters) to Zug. Therefore, I hypothesize that due to Zug’s tax policy aimed at attracting those especially tax-sensitive and at the same time very mobile companies, policy-makers see themselves in a situation where they do not dare to compromise this low-tax profile through coercive solutions that are more costly for business. In contrast, authorities in Zürich have more leeway. Examining the factors that determine policy reactions to internationalization appears to be highly relevant, as the chosen policy solutions come with certain implications. Most importantly, a dedicatedly canton-specific as well as firm-specific policy solution as carried out in Zug may have the potential to compromise the overall uniformity of the system, its standardization and the portability of qualifications, as suggested by the growing literature on segmentalism in collective skill formation systems.