Firms that bridge theory and practice

One of the greatest challenges for Slovak academia is to respond effectively to the needs of the labour market and to educate students to meet the demands of a real working environment in a very short time after leaving school. Training firms, sometimes called practice firms, enable students to experience an actual business environment – even if it is only in the virtual world.

More than 110 training firms attended a trade fair in November 2008 in BratislavaMore than 110 training firms attended a trade fair in November 2008 in Bratislava (Source: : Courtesy of the Slovak Centre of Training Firms)

One of the greatest challenges for Slovak academia is to respond effectively to the needs of the labour market and to educate students to meet the demands of a real working environment in a very short time after leaving school. Training firms, sometimes called practice firms, enable students to experience an actual business environment – even if it is only in the virtual world.

While Slovakia’s tradition might not be as long as in other countries, it has a quite sophisticated network of training firms.

“A training firm serves as a bridge between the academic and practical world of business,” Gabriela Horecká, the head of the Slovak Centre of Training Firms told The Slovak Spectator. “It prepares young people for real working life – it enables them to get praxis which almost every employer requires and additionally it helps rid them of the fear of starting a business and of engaging in real-life work.”

The idea of training firms dates back as far as the 17th century in Germany and Austria. Germany, which now registers about 700 training firms, uses this model for 60 percent of its adult education while Austria, with about 5,000 training firms, uses it to educate students.

The modern methods of training firms now have a 50-year old tradition in many countries with developed market economies. Since the 1960s the concept has developed into a worldwide network of over 5,500 practice firms in 42 countries operating under the framework of a non-profit association called EUROPEN - PEN International.

A training firm is a virtual company that runs like a real business, simulating an actual firm's business procedures, products and services. Although there is no transfer of goods or money, all other transactions take place: orders are placed, invoices issued, wages paid and financial records maintained.

“Working in a training firm provides students with the necessary skills and knowledge to either become an entrepreneur or to find employment after they complete school,” said Horecká. “The advantage of such a form of education is that the students can learn from their own mistakes without any risks.”

Though the idea first came from Germany, the Austrian model now dominates in Slovakia, according to Horecká. Since 1992 training firms have been part of the curriculum of many Slovak secondary schools. Now they are also used to re-qualify the unemployed.

The first training firms were established at business academies and later this model of education was extended to secondary vocational schools. Since 1998 the number of training firms has increased exponentially at all types of secondary schools from only 35 in 1998 to about 540 in 2008.

“The reason behind this dramatic increase is simple – simulation of real practical work provides excellent preparation for future employment,” Horecká said.

Many training firms in Slovakia operate at business academies. At these schools the training firms focus mostly on accounting and other managerial functions needed
to run a company.

At vocational schools the goal of training firms is to teach students more generally how to build a company, such as how to register and launch a company, how to prepare its pricelist and how to prepare a marketing presentation. This type of training helps overcome students’ fear of starting a business after they leave school.

Most training firms in Slovakia (55 percent) are focused on retail and wholesale trade of consumer goods. But there are also training firms for travel agencies, banks, insurance companies, real estate agencies, construction and manufacturing companies, as well as advertising and printing businesses.

How it works

The Slovak Centre of Training Firms (SCCF), which is a section of the State Vocational Education Institute, provides all the necessary background services for the training firms.

“Our team, which totals four people, runs all the bodies of state administration in a virtual form to simulate the real business environment,” said Horecká. “We operate a virtual registry for trader’s licences and virtual offices for the social security provider, the health insurance company, the tax office, the customs office and a bank.”

To simulate the real business environment as closely as possible, training firms also make partnerships with real companies.

“In Austria and Germany each training firm has a real partner firm,” said Horecká. “In Slovakia this is not yet at 100 percent.”

Such cooperation is beneficial for both the real company and the training firm. The real, parent firms usually provide material as well as financial support and basic data for the training firm to run its business. Students can help the real company during presentations or with administrative assistance. Such cooperation enables students to understand the core business of the real company.

The Business Academy at Watsonova street in Košice currently runs 10 training firms engaged in trade, selling automobiles, electricity and garden furniture, providing patent registrations as well as other businesses. It has been cooperating with a number of actual companies including the regional electricity distributor Východoslovenská Energetika (VSE), car dealership Qualt, Slovenská Sporiteľna bank and Teko heating company.

“A training firm, via communication with other training firms in Slovakia as well as abroad, enables students to get not only theoretical knowledge but also practical business skills and the work habits necessary for working in a real company,” Peter Országh, the director of the Business Academy at Watsonová told The Slovak Spectator.

VSE has been cooperating with the Business Academy since the launch of its training firm In Energy in 2004.

“In Energy replicates the core business of VSE, the purchase and sale of electricity,” Veronika Bačíková from VSE told The Slovak Spectator. “Our company provides the training firm with our know-how and consultancy. Students can come for a study visit or for praxis. The cooperation is also in financial and material assistance, which is inevitable for running training firms and their participation at fairs.”

Participating in a fair is one of the key moments for training firms. In addition to these fairs, students can present the business operations of their firms at open-house events at their schools.

“The fair is an excellent opportunity for students to try out what they have learned in their classes,” said Horecká. SCCF, in addition to providing background services for training firms and organising lectures for teachers who participate in the programme, organises an annual fair for training firms.

At the fair the training firms ‘trade’ with each other and compete in various categories such as for the best catalogue, the best stand, the best presentation and others. This provides them with an opportunity to show what they have learned in the school and that they can use their knowledge in real life.

“The biggest benefit of a training firm for students is the possibility to test the theoretical knowledge they gained at other classes,” Simona Priecelová from the Business Academy at Nevädzova Street in Bratislava told The Slovak Spectator.

“They learn to be self-reliant, flexible, creative, responsible, and communicative. They learn to solve problems comprehensively and to bear the consequences of their decisions. Their experience in a training firm makes them more attractive in the labour market in comparison with their peers who do not participate.”

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