PAGE 6 BRIEFING PAPER share of employees participating in training is just over five times as high in the SEE region in comparison to Kosovo, while the share in the ECA region(where skills are already at a significantly higher lever) is four times as high compared to Kosovo(World Bank, 2010). Further, private businesses in Kosovo often report that the skills of educated workers are not satisfactory(Riinvest, various years). In particular, representatives of firms feel that secondary and tertiary education does not prepare the labour force entrants for the labour market, part of the problem being their lack of“practical skills”, i.e. applying knowledge to solve problems in a workplace setting. Deficiency of skilled labour appears to affect virtually all economic activities. In some vocations – like food processing and mechanical engineering – this problem appears to be so severe that firms report that they have to hire staff from neighbouring countries, which significantly increases their production costs. Improving the quality of education is a key factor in improving the quality(and thus competitiveness) of Kosovan products and services in the country and abroad. On the other hand, there are cases in some vocations(e.g. welders) where even though there are experienced workers available, their skills are not formally certified, which(under information asymmetry) makes it difficult for potential foreign investors to recruit workers (Rukiqi, 2011). Examples like this one illustrate the importance of having also(formal) vocational education and training and the importance of having a qualified workforce for attracting foreign direct investment into the country. Especially, as the level of workforce skills not only affects the willingess of foreign firms to set up a subsidiary, but also the level of technology and know-how they invest into a country. An ecouraging outlook for the ICT sector is reported by the Kosovo Association of Information and Communication Technology where training is successfully provided by companies such as CISCO, Microsoft and ORACLE. According to this association, Kosovo is a leader in terms of CISCO engineers per capita and all of them are employed (Çavolli, 2011). 4. Labour Law Laws on labour have a direct effect on the production costs of the private sector and as such they determine its market competitiveness, but also the attractiveness of an economy as a destination for foreign direct investment. Accordingly, the new labour law in Kosovo is recongnised as an imporant development by private businesses and business associations. The interviewed business associations all feel that the new labour law is a cause for concern to the private sector, even though it is still early to estimate the magnitude of its effects. First, the new law increases the cost of labour because the working hours are shorter and the holidays are longer. Second, the law increases the relative cost of hiring women due to the longer maternity The new labour law has increased the relative cost of hiring women