Apprenticeships and youth training must adapt to meet the challenges of the economy, the Employment Minister said as he announced a major review of the scheme.
Based on 2011 figures, less than 3% of the province's 16- to 24-year-olds are in apprenticeships, compared to 6% in England.
In Switzerland, around two-thirds of young people enter apprenticeships.
Dr Farry said apprenticeships had lost some of their status in Northern Ireland and were unfavourably compared with a third-level education.
But he said: "I want to establish a system of apprenticeships that offers a pathway that is regarded as equal to or even better than academic routes.
"At the same time, I want the review to consider how young people can progress into higher education from a non-traditional pathway if they so wish."
Dr Farry said existing schemes had "served Northern Ireland businesses well, but the types of economic activity in which they engage and the goods and services they produce are changing rapidly".
"I want to reflect the changing nature of our economic opportunities in Northern Ireland and to ensure that our training programmes are fit for purpose for the 21st century – delivering gold standard apprenticeship programmes," he added.
The review will report its findings in the autumn of 2013. Many prominent Northern Ireland business people entered the world of work through apprenticeships, including Anglo American chairman Sir John Parker, who served an apprenticeship with Harland & Wolff.
Sir Roy McNulty is deputy chairman of the Olympic Delivery Authority and a former chairman of Shorts Bros plc, who served an apprenticeship in accountancy.
Last year, the DEL cut funding for apprenticeships for the over-25s, apart from those training in fields described as "economically important" such as IT, engineering and the manufacture of food and drink.
It also launched an apprenticeship scheme to enable around 30 people to serve apprentices with IT firms such as Consilium, Liberty IT and Kainos.