Private Sector Development and Technical Vocational Education and Training, South Caucasus

Project description

Title: Private Sector Development and Technical Vocational Education and Training, South Caucasus
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Co-funded by: European Union (EU)
Country: Armenia, Azerbaijan, Georgia
Lead executing agencies: Ministry of Economy (MoE) in Armenia; Ministry of Economy (MoE) in Azerbaijan; Ministry of Economy and Sustainable Development (MoESD) in Georgia
Overall term: 2017 to 2023


The three South Caucasus countries of Armenia, Azerbaijan and Georgia face the challenge of fighting poverty if they are to narrow the urban-rural divide and reduce poverty. To do this, the three countries must create economic growth that benefits the entire population.

Broad-impact and inclusive growth requires skilled workers trained in line with private sector needs. However, many companies are uncompetitive because they lack a well-trained and skilled workforce. This is particularly the case in sectors offering the greatest employment potential both in the South Caucasus and in comparable economies. Vocational education and training is not meeting the needs of the labour market at present. In particular, professional training does not involve the private sector in a targeted way and is not geared to practice.


Sectors with high potential for employment are experiencing sustainable economic development.


The project follows an integrated approach to employment promotion. It focuses on labour market supply and demand in a bid to improve the conditions for job creation and employment. Involving the private sector to a greater extent in vocational education and training and boosting the competitiveness of sectors with a high employment potential are core components. The project operates in the following thematic areas:

Promoting the private sector. The project is working to strengthen key business support organisations, selected businesses and government agencies to improve competitiveness and develop sustainable business models in key employment sectors.

Vocational education and training. The project analyses the need for skills development and identifies appropriate training providers. The focus is on quality management, cooperation with the private sector and the development of dual-type training courses.

Regional and international exchange of experience. Thematic exchange formats enable the implementing partners in the region to learn from each other and to network. Ministries and regional partners work together in regional academies to develop joint approaches to cooperation.

In Armenia, the project’s advisory services focus on winegrowing, tourism and IT. In Azerbaijan, they are geared to winegrowing, agriculture, tourism, transport and logistics. In Georgia, they are geared to winegrowing, tourism, construction, IT and clothing.

The project is co-financed by the European Union (EU). It cooperates with a range of institutions in the South Caucasus, in Germany and worldwide.


Since 2013, this project and the predecessor programme, ‘Private sector development, South Caucasus (2013-2017)’, have achieved the following results:

Armenia: Small businesses in the tourism sector have enhanced their services and been able to access finance. The ‘oenology and winemaking’ training course has been successfully developed. Dual vocational training is now embedded in Armenia’s government programme for the period from 2019 to 2024.

With EU co-financing, more than 450 jobs have been created and over 150 new businesses have been set up. Additionally, around 10,000 small and medium-sized enterprises (SMEs) and start-ups have received support through training measures and subsidies. 56 companies have been able to generate EUR 6.7 million in capital. 600 female entrepreneurs have joined a newly founded association.

Azerbaijan: Exchange in the area of vocational education and training between ministries, public bodies and the private sector has improved. Modules for short courses have been designed and implemented in line with sector needs. 60 farmers have been able to significantly improve production as a result. A community-based tourism model around Göygöl National Park is supporting the development of tourism and generating income.

With EU co-financing, dual vocational training provision has been created and 488 apprentices have received training in tourism and agriculture. Three vocational schools and 74 companies, of which half were SMEs, cooperated on the project. The project has also supported the vocational schools with equipment and workshops.

Georgia: Companies have formed clusters and are working together to improve the quality of their products and develop their range of services. Wine companies have increased their sales to the EU by 68 per cent and their turnover by 121 per cent in the course of two years. 300 guest room owners and hotel managers have also improved their services and boosted earnings. Georgia launched its first completely dual vocational training course for winegrowers in late 2016.

As part of EU co-financing, companies in the IT, film, furniture and interior design, and clothing sectors received support with establishing business links with European companies, generating new products – and new jobs. More than 100 SMEs are now organised in clusters, benefiting around 1,500 employees.

Regional exchange. Regional academies offer a platform for thematic learning, specialist exchange and further cooperation on joint national, regional and sectoral projects, including on dual vocational education and training as well as cross-border tourism.


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