Today’s economy bases on well-educated, creative human capital secured by a globally competitive education system that includes higher education (HE), vocational education and training (VET), and continuing education and training.
The analysis of target countries (TC), Armenia, Georgia and Ukraine, shows that Armenia  (AM) ranks 91st out 139, Georgia (GE) 77th, and Ukraine (UA) 46th for higher education and training development according World Economic Forum’s (WEF) Global Competitiveness Report 2011. Although the three countries have different ranks, and Ukraine demonstrates higher position, the Competitiveness Outlook 2011 notes that tertiary education in all these countries has outdated curricula, teaching methods, and equipment support. It is below the level required to compete effectively with OECD countries. TC’s education systems lack standards, cannot supply the growing demand for skills, are unable to meet modern engineering requirements and as consequence bring a discrepancy between students knowledge/skills and labour market needs. While the enrolment in TC universities is high, the graduation rates from total numbers of graduations in engineering/construction specialties are low: AM 5,7%, GE 16,8%, and UA 20,2% (2008). Therefore, to support industry growth AM and GE should produce more scientists and engineers. At the same time, a 2009 study of UA by NORRIC noted that the challenges of high education in Ukraine lay in popularity of business/management studies over engineering/science subjects. Despite the picture in HE in UA is better than in AM and GE, its´ HE is not fully attuned to the needs of the business community (56th position out 139); although math and science education is satisfactory (ranked 42nd), engineering education must be improved.
After the collapse of the Soviet Union no attempts were made to establish linkages between education and industry in AM and GE (evRC2010). As a result, it is a mismatch between what industries need and what universities offer to students seeking employment in those industries. According WEF (2010) “inadequately educated” employees is the most problematic factor for doing business in GE (3rd position among of 15), and in AM (8th). The ETF – European Training Foundation (2010) highlighted that in AM cooperation between university and industry exists but it needs to be improved especially in remote areas. A survey (evRC, 2010) of Armenian engineering companies points to a significant gap between industry requirements and the quality of engineering programs. About 80 percent of companies are dissatisfied with the practical knowledge of graduates and more than half of surveyed executives find graduates’ theoretical knowledge, even in basic sciences, insufficient.
ETF (2010) study of the education-business cooperation in Georgia notes that qualifications of university graduates are irrelevant to the market needs. The Georgia Tempus office confirms that while 80% of universities have agreements with businesses only 10% cooperate with employers on curriculum design, 11% conduct labour-market survey. They conclude that the university-enterprise dialog should be improved.
All three countries have legislation and strategies for university-business cooperation improvement but in many cases the strategies are not implemented. Often the subjects studied are has no labour-market demand or how it’s taught is out-of-date. At times students are given theoretical knowledge but not skills.  Mismatches between employers´ needs and what universities offers lead to skills gaps and economic under-performance. Even more, local businesses of TC are especially dissatisfied with VET/continuing training services, which are either non-existent or highly insufficient (Policies for Competitiveness Assessment framework, 2010). The CGI (2011) Relevance and Labour Skills ranks for extern of staff training are 116 (AM), 108 (GE), 109 (UA) out 139.
Analyzing available data in AM,GE,UA iCo-op decided to improve industrial cooperation and engineering education by creative and contemporary methodology based on practical components using remote and virtual instrumentation. For this purpose we propose to provide a university-enterprise cooperation model that:
– sets up a strong link between universities and enterprises. Each TC university has at least one enterprise as a partner (D1.1, D6.1, D6.2);
– creates a system of monitoring labour-market developments and anticipating future skills requirements with industry and potential employers consultation (D1.2-1.4, D6.2-6.4);
– routinely involves potential employees or their representatives in course content or standards development (D1.7, D4.3-4.4, D6.6);
– establishes modern learning/research equipment: remote laboratories, virtual instrumentation, LMS (D3.2, WP2) to fully meet demands of world marketplace, as it has been successfully proven at EU projects e.g. MERLAB, E-PRAGMATIC (LdV); MARE, BIT2010, TARET, TRICE and TRE (ERASMUS);
– provides access to state-of-the-art physical resources and expertise of companies (D4.3);
– designs learning module specifications (D3.1), delivers electronic and alternative technologies (D3.4,3.5), and transversal content and skills (D3.3)
– trains students (D4.3) and certifies trainers/lecturers (D3.8,D4.1,4.5,4.7, D5.3) and employees (D4.3, D5.3).
The demand in education is often oriented to very specific training needs and to short but intensive acquisition of competencies and knowledge. The labour market supports this demand. Employers strongly request potential employees to present these qualifications, skills, and competencies. Thus the project beneficiary group can be viewed as the large set of economic players: students, professors, and administration of HEI and industrial partners, the employers of the engineering sectors. The project results will effect educational and economic transformation of partner target countries.