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Are skills the answer, if so, what is the question? Introduction In today¡¦s increasingly globalise economic environment, the companies have to compete in a new way. The UK economy has experienced the transition from industrialisation to a knowledge based economy. Since capital is mobile, technology can migrate quickly and goods can be made in low cost countries and shipped to developed markets, many companies in UK have off-shored to countries like India as they offer lower labour costs. Therefore UK business must compete by developing new strategies, which its competitors cannot easily imitate. These strategies cannot be simply related to raw materials or access to cheap labour; rather, they must be related to knowledge, skills and creativity, it is by addressing these issues can the productivity of businesses¡¦ quality of their goods and services be increased. In 2001, firms in UK were asked by the National Skills Task Force whether they were planning to move into new, higher quality product or service areas with higher profit margins, and 60 per cent said no. Hence, this is a problem that the Department of Trade and Industry (DTI), the new sector skills councils, the regional development agencies and the rest have to solve in trying to transform the economy. Traditionally, only the inadequacies of the UK education and training system have been blamed for making the firms impossible to produce and compete in high quality markets (Steedman and Wagner, 1987). Or else, the more recent view is that it is the failure of firms to produce in these markets that ensures a lack of demand for skilled workers (Keep and Mayhew, 1998). All sides of the academic debate have accepted the link between skills and product strategy. ¡¥Show me a skilled individual, a skilled company or a skilled country and I will show you an individual a company or a country that has a chance to be successful. Show me an unskilled individual, company or country and I will show you a failure in the 21st century.¡¦ (Thurow, 1994, p.52) Since the late 1980s, UK policy-makers, the Confederation of British Industry and the Trades Unions Congress have stressed that national economic competitiveness and prosperity depend crucially on a highly skilled, adaptable and motivated workforce. Since coming to power in May 1997, the Labour government has also tended to see upskilling as a solution to a wide range of problems, from productivity and competitiveness to unemployment and social exclusion. Education and training has therefore been one of the most active areas of government policy, with a push of new initiatives, showing elements of both continuity and discontinuity with the policies of previous Conservative administrations. Over the last twenty years, there have been various attempts to reform the UK system. It has mainly been concerned with producing a greater supply of skilled workers to the labour market. This has been reflected in the development of different qualifications for school leavers. However, the basic problem of the demand side, that is, the employers have not been tackled. Regarding to the importance of skills, the employers resist investing in skill development for their employees because they fear that once they have trained their employees, he or she would leave and therefore there is no guarantee that training will benefit the firm that trained the employee. Also, for many employers, low skilled employees equate low cost to them. Moreover, the employers are unable to see that low skilled employees would produce low value added products. Skill It is widely believed that skills are the answer to the question of ¡¥how to increase UK¡¦s competitiveness?¡¦ ¡¥Skill¡K is a capability to bring about an end result with maximum certainty, minimum energy or minimum time.¡¦ (Schmidt, 1991, p.51) Given the general consensus around the importance of upskilling the workforce, recent research has shown that the meaning of skill has changed to a much broader meaning. In the past, it was intended to be equated with the manual skill and technical ¡¥know-how¡¦ of the manual craft-worker or the analytical capacity of the scientist or technician.
Approximate Word count = 2632
Approximate Pages = 10.5
(250 words per page double spaced)
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