How Coordinated Capitalism Adapts to the Knowledge Economy: Different Upskilling Strategies in Germany and Switzerland

The rise of the knowledge economy challenges coordinated models of capitalism by requiring their skill formation systems to produce a workforce with higher skills. This paper examines how coordinated capitalism adapts to upskilling pressures by jointly studying general education and vocational education and training (VET) at both upper-secondary and tertiary levels. Employing a comparative research design covering German and Swiss upskilling efforts over the past 50 years, we observe important differences. Switzerland, with influential small firms and weak union presence, focuses on keeping VET an attractive option at upper-secondary level by favoring VET graduates' access to tertiary education. By contrast, Germany, marked by large firm dominance and influential unions, concentrates on expanding general education throughout and adding vocational elements later. Our analysis suggests that firms' reform preferences are conditioned by their size and political constraints to reform.