skills on their own are not the only answer

The Centre for Enterprise has launched a series of 'conversations' on topical issues related to economic development - they are asking for responses and comments a bit like a blog. They did a particularly good piece on skills I thought, and I have repeated my response below in a nice blue colour owing to vanity.

The Centre for Enterprise also have a new beta model for blogging and discussion, of which I have been invited to contribute in its development stage. Once its public I will post a link.

Firstly - I welcome this paper, which clearly illustrate the points that Skills are not the only answer, but are part of the answer, and a smaller part than popular opinion (and Govt Policy) would seem to merit.I have always thought several points are worth making about this agenda:

1) SKILLS UTILISATION is a key concept here - you could supply skills and qualifications to an employer and individual worker, but will they be fully deployed in the workplace? without associated investment in capital, or competitivness strategies, etc we could be investing in skills formation that is not utilised thereby creating a large deadweight expenditure. This captures a lot of your argument nicely - i.e. are we over investing in skills or investing in the wrong skills, or do we need some critical things to happen before its worth investing more in skills?

2) EXHORTING EMPLOYERS IS NOT THE ANSWER - the recent paper by Warwick University for Futureskills Scotland tells us this. And we know that businesses don't really pay much attention to government. We need to incentivise productivity improvements. This can include making it easier for a well performing business to take over an underperforming one, as well as the usual fiscal incentives.

3) THE ANSWERS MUST START WITH THE EMPLOYERS THEMSELVES - employers drive productivity gains - this should be the starting point - i.e. skills demand. In the past the starting point has always been skills supply - i.e. the institutions and the vested interests. This always creeps in - witness how quickly it creeped into the SSDA justifying itself as being the answer to the UK's productivity problem.

4) THE PUBLIC SECTOR CAN ASSIST IN PRODUCTIVY GAINS - our public sector could work better and achieve productivity gains too. Also - infrastructure etcetera.Lastly - I think the government can incentivise competitiveness and productivity gain, but is not very good at delivering it themselves through advice and services etc, unless it is basic infrastructure or research spend. The government should refocus on achieving a business environment and incentivised behaviour to enable productivity gain.

Comments from Ewart Keep are also pretty incisive: "I particularly enjoyed the way the author(s)show how those writing policy documents slide neatly from one small, often carefully qualified piece of evidence/research to a huge, unqualified and sometimes unwarranted conclusion and/or policy prescription. This is evidence based policy making where evidence based means you extract some isolated killer facts from the research and deploy them to support conclusions and policies that are already determined."

The overall message is that skills are not isolated from being a political football with selectivity in facts and messages from politicians and public agencies, and that we have been in a situation for quite a while of the "tail wagging the dog" in skills.