Bettina Müller
Dr. Ralf Meier
Gebhard Weiss, February 2009
Editoral
Before a company makes an investment, it creates a business plan and calculates an "internal rate of return" (IRR). This procedure is intended to establish when, and to what degree, the investment will be profitable. When an employee takes part in company-financed training, the expenses involved will also be considered an "investment".
In contrast to an investment in equipment such as machines, however, companies which put funds in such training schemes simply make do with an IRR that "feels positive"--they don't measure it. According to an estimate by the World Bank (Discussion Paper no. 0822 – The Return to Firm Investments in Human Capital, June 2008), the IRR of formal job training investments is 8.6 %, quite a substantial figure.
Companies interested in investing in developing countries are often confronted by a lack of trained personnel both among their local suppliers and customers as well as on the local labour market. In many such cases, the question of whether there are sufficient qualified staff then becomes a "go/no go" criterion.
It is then that develoPPP.de assumes enormous importance: It is a tool we offer companies to support them during the process of qualifying and training experts. A tool, therefore, that helps develop markets for products and services and create jobs in developing countries.
Many of our projects have shown that it is develoPPP.de which allows businesses to become active in developing countries in the first place which makes their real IRR much higher than the 8.6 % calculated by the World Bank.
Gebhard Weiss, Managing Director
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