Market-oriented higher-education systems (UK, US), face increasing privatization whereas Continental European states have maintained their considerable investments in a range of opportunities in vocational and higher education (Powell et al. 2012). Tensions have deepened over who should pay for rising costs and who can access learning opportunities in higher (vocational) education, exacerbated in an era of increasing status competition via educational attainment, as education has become the key positional good for labor market integration as well as status attainment and reproduction. In the face of such challenges, which alternatives exist to combine accessibility and support and secure transitions from education and training into employment? One prominent possibility, pioneered in Germany in the 1970s, are “dual-study” programs. These hybrid programs fully integrate phases of higher education study and paid work in firms; students are simultaneously trainees, often in larger firms with possibilities for internal advancement (Graf 2016). In the short term, firms receive inexpensive labor, they also benefit from personnel trained in the relevant organizational and technological context. Yet, firms invest not only in recruiting and training motivated future full-fledged employees. They also collaborate with higher education institutions to develop specific curricula and meet university academic standards. Employers and educators cooperate to provide coursework in “dual”-learning settings: on campus and in the workplace to shape a labor force oriented toward current challenges and opportunities in specific sectors, such as engineering and economics or business. Dual-study programs manifest ways in which employer interests and investments are shaping advanced skill formation, producing new skills. We argue that contemporary developments in Germany provide an innovative approach to simultaneously strengthen education and the economy (Graf et al. 2017). Co-developed and co-financed by employers, these programs have many advantages. Benefits include encouraging employers to at least partially fund their own skill supply; the burden of financing higher education is shared by the state and firms. Who gains access to this innovative form of vocationally-oriented higher education, especially within stratified education systems? Grounded in neo-institutional analysis and on the basis of expert interviews and document analysis, we focus on the relationship between higher (vocational and professional) education and firms in Germany. We analyze the rapid expansion of dual-study programs, emphasizing the importance of employer interests and university standards and distributional conflicts in the politics of skill investment. We present lessons that other countries might learn from these hybrid programs developing in Germany over the past several decades.

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