Bet on Giants or Grow with Grassroots Businesses?
Working with companies is key to making vocational skills development relevant, inclusive and connected to real labor markets. Yet one question keeps resurfacing across projects and countries: Should we bet on large companies or grow alongside the micro-businesses?
Two SDC projects bring this debate to life through their experience and strategic choices: Education for Employment (E4E) in North Macedonia and Youth for Skills in Mozambique (SIM!). Implemented by Helvetas, both operate in very different economic realities, but converge on the insight that context matters more than models.
Who is the private sector? Demystifying a persistent myth
The private sector is often implicitly equated with large, formal companies. But it actually includes all private economic actors who generate income and jobs, ranging from multinational exporters to family businesses and single entrepreneurs. The diversity in the business landscape defines the labor market reality and recognizing who actually creates jobs and how labor markets function in practice is the starting point for any meaningful strategy to link vocational skills development to the private sector.
In North Macedonia, national statistics show that 98.3% of all enterprises are small and medium enterprises.
In Mozambique, the picture is even more striking: The informal economy accounts for roughly 80% of total employment, according to IMF and ILO estimates. Most of these informal activities take place in micro-enterprises, such as family-run businesses or self-employment in smallholder agriculture and trade.
These structural differences matter. In more industrialized or export-oriented economies, the private sector is often organized through chambers and sector associations, making collective engagement easier. In rural or informal economies, such coordination rarely exists, and organizing the private sector becomes part of the development challenge itself.
Why private sector involvement matters for inclusion and opportunity
Across both projects,private sector involvement has fundamentally reshaped how vocational training connects to economic opportunity. In alignment with SDC’s approach to vocational skills development, the interventions draw on key elements of Swiss dual VET, such as shared responsibility between public and private actors and structured work-based learning, with adaptations for the respective country contexts.
In Mozambique, SIM! starts from a simple but powerful observation: Young people already learn and work in the private sector long before any project intervenes. Traditional apprenticeships with artisans and micro-businesses are often the first, and sometimes only, entry point into the world of work. SIM! identifies sectors with demonstrated market demand, maps the actors already training youth, and assesses their willingness to engage more systematically. Training content is then developed in collaboration with these actors.
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In North Macedonia, E4E operates in a more formalized labor market, where businesses expect graduates to be productive quickly and to meet international quality standards. Working through chambers of commerce and sector associations allows E4E to align training with export-oriented growth sectors. Companies engage not out of social responsibility alone, but because skills shortages directly constrain productivity, competitiveness and growth.
SDC’s analytical work on private sector involvement in vocational skills development underscores the logic that effective skills systems emerge when employers are not only beneficiaries, but active contributors, bringing expertise, providing training spaces and co-financing into the system.
“After completing the packaging course, I was hired as a worker almost seven months ago,” said Eliza José Henriques, 25, whose training course was a collaboration between the SIM! project and local agri-business company RW Machamba. “I chose to take the packaging course because before that I made a living selling peas and other food products on the streets of the Montepuez town center. I am learning a lot about preserving food, which is very important to me because I hope to open my own restaurant in the future.”
For companies and artisans, engagement delivers tangible economic benefits such as lower recruitment costs, better matching of skills to production needs, and, over time, higher productivity and retention.
How involvement works in practice: Strategies shaped by context
Neither E4E nor SIM! started with a fixed blueprint for private sector involvement. Both projects tested different entry points before consolidating approaches shaped by their market realities.
In North Macedonia, after partnering with the chamber of commerce at the national level, E4E explored engagement with a wide range of businesses, including smaller enterprises. Experience showed, however, that medium and large companies offered a stronger return on engagement in terms of scale and sustainability. These firms had clear human resource strategies, greater financial capacity, and stronger incentives to invest in workforce development.
In Mozambique, SIM! also engaged larger companies, particularly in agriculture and construction. These businesses provide quality standards, internship opportunities and pathways into more formal employment. But in remote, rural areas, large companies are often not present, and the existing ones cannot absorb the volume of young people entering the labor market. In these cases, SIM! links these larger companies with micro-businesses and artisans who are better able to mentor youth.
Size doesn’t matter, but incentives do
Both E4E and SIM! demonstrate that robust vocational skills development systems emerge when large and small actors are connected. Market leaders can set benchmarks and open pathways for innovation, while smaller and more agile firms can be more open to change and reach underserved youth.
Private sector involvement in vocational skills development is therefore less about choosing between giants or grassroots, and more about understanding who has the incentives and capacities to address specific constraints at the right time, and in the right way. From a systemic perspective, both types of actors can trigger change: Large companies by demonstrating scale and standards, smaller ones by proving relevance, access and inclusion.
About Helvetas
Helvetas is an independent Swiss non-governmental organisation and a key partner in Swiss international cooperation. It is a recipient of SDC core contributions and implements programmes and mandates on behalf of the SDC and SECO in numerous countries. Its work focuses on water, food and climate, jobs and income, as well as inclusion and social cohesion, primarily in the Global South and Eastern Europe.
SDC works with Swiss NGOs such as Helvetas because they combine Swiss expertise and innovation with strong operational experience. They contribute specialist knowledge, practical solutions and high-quality services, and their work is aligned with Switzerland’s International Cooperation Strategy.
Further Information: Non-governmental organisations
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