Dual system of vocational education and training in Germany has been undergoing periodic revisions to meet new requirements in a changing environment and it still maintains a pivotal position in German labor market. However, those reforms to reflect the changes in technology and industry structure have caused dualization and diversification of training occupations, resulting in the co-existence of those requiring more abstract knowledge and theories and those primarily requiring OJT. In the former, dual system now competes with higher education such as universities in order to secure highly capable young people. Low birth rate and globalization of education and labor markets have also increased the interest of German youth in higher education. To cope with this situation, German firms have invented new training options in order to attract highly capable youth, who have graduated from gymnasium with very good scores. For example, dual study program (DSP) is a hybrid system which offers apprentices opportunities of participation in firmbased OJT and higher education at the same time, while receiving training allowances. Since both initial vocational qualification and bachelor degree can be obtained on fast track, DSP is rapidly gaining popularity. More training options are now available for highly capable German youth, while it is becoming more difficult for graduate from hauptschule, a major supplier of apprentices in the past, to receive training positions that lead to good income. In addition, active updating and sophistication of existing occupations have been accompanied by a side effect of crowding out small companies from dual system due to increased costs. Similarly, DSPs are offered almost exclusively by large firms. Thus, within German vocational education and training, disparities among firms as well as among apprentices are now becoming more salient. When we look at another important institution of collective bargaining, coverage ratio of industry based agreements have now substantially fallen. Segmentalization or dualization of collective bargaining and vocational education and training are observed simultaneously.