Industrial strategy & the future of skills policy

Industrial strategy & the future of skills policy

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  Industrial Strategy & the futureof Skills policy Presenter: M Gohar Iqbal
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  WIIFY: • Introduction ofIssue. • Current Challenges, Policies, Tensions, Focus. • Conclusion with suggestions.
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  Introduction • Economic situationof UK. • Trying to achieve sustainable economic growth. • Falling economy of UK depends on Labor’s Low Skills and Over Qualification. • Low Productivity is linked with above point and therefore: • Falling Real Wages and • Low pay.
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  Current Challenges • Skills •UK lags in skills and qualification achievements when comparing to OECD associates. • There is a demand from employers to have only those employees that have compulsory schooling. • Overqualified and Skills lacking employees. • Govt. finds it “too difficult” to improve the skill status.
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  Current Challenges (cont.) •Productivity: • When there is a fluctuation in S/D of Skills…. It effects productivity. • Short term economic challenges leads Employer to: • Get reluctant in investing in trainings. • Buy cheap, low skilled labor. • Above actions can cause low productivity , that is crucial to support Economic growth and to generate sustainable rises in real wages for the bulk of work force.
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  • Growth (oflow-paid work) • Assumption : The real wages will rise over the long term powered by increasing level of productivity. • Real scenario : Real wages are likely to continue to stagnate or fall in the years ahead. • If wages rise 1.1% above inflation, the average household income will reach the same levels at 2008 in 2023. • Rising levels of Part time/low paid employment “may” be adding earning problems • These Earning trends is a major stumbling blocks for employer to encourage employee to work on his/her skills. Current Challenges (cont.)
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  Current Policies • Pickingbroad sectors (hi-tech mfg.) which can lead an export drive, public subsidies to overcome market failure within these sectors and improving manufactures’ access to investment funding. • Focus on traditional horizontal measures, such as ‘red tape’ busting and more education and training. • Rebalancing the economy and the need to grow the manufacturing sector to boost exports and improve the UK’s balance of trade.
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  Tensions in whatgovt. trying to achieve • UK’s aim : • Making UK the best place to start and grow business, • creating the most competitive tax system in the G20, • encouraging the investments as a means to rebalance the economy and • creating a more educated and flexible workforce • The aim’s looks ambitious but these don’t provide the directions in terms of what govt. is trying to achieve.
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  Tensions in whatgovt. trying to achieve • There was a tension in between 2 models of competitive strategy: • High Road Model • “High Skilled workers deliver sophisticated, high specification goods and services that are sold on the basis of their quality rather than their price, and where firms comes to the UK because this is our model” • Low Road Model • “A disposable workforce produces relatively standardize goods and services that are primarily sold on the basis of low price, and where firms come to the UK because it is cheap place to do business and taxes are low ”
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  • The above2 models provides 2 different paradigms: • Paradigm 1: • “People are our most important assets, the workforce and their skills are the prime source of competitive advantage and employers should manage and engage them in sophisticated ways in order to enhance their commitment and creativity, and support flexible ways of working” • Paradigm 2: • “Workers are disposable factor of production or a cost to be minimized, and therefore their skills are inherently interchangeable and of limited importance. Investing in them and seeking to engage is less important, and fear is an effective motivator. It should therefore be made as easy as possible for employer to fire staff” • It seems Low road model were becoming more and more visible. • There was also a Porter’s report of unresolved issues, which was then IGNORED. Tensions in what govt. trying to achieve
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  Too narrow afocus public policy • Industrial Strategy boundaries were far much narrow: • It emphasized on key problems with: • The vertical element of strategy • The horizontal element of strategy • The vertical element: • “it focuses on sectors and sub sectors that may have potential to generate large amounts of exports BUT which are not at all likely to generate large volumes of direct employment AND which will therefore cover but a relatively small proportion of the total national workforce and output.”
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  • The horizontalstrategy: • “These measures make a little direct connection with the people management issues. In other words, the people element of production and innovation is largely ignored and absent” • Model of Innovation: • Govt. conceived that innovation is only through science technology advancement, patents, intellectual capital and technology transfers. • Due to this the focus is narrowed on hi-tech sectors but not on other service industry. Too narrow a focus public policy
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  • There wasalso a narrow or no focus on Workplace design (The Ergonomics). • This paper discussed about workplace as: • Would have a strong explicit focus on workplace, in order to improve leadership and working quality and growth opportunities. • It would also boost skills demands and improve skills utilization. • Solution Strategy: • Need policy to start to confront issues to do the lack of progression that is available to work. • All the govt. have to do is to stand back, try to create and caring economic and employment environment, and keep its fingers crossed. Too narrow a focus public policy
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  Concluding Suggestions: • Thereis a absence of demand side of skill equation. • There is an absence of workplace focus policy. • SUGGESTIONS: • Researching nature of jobs & the evolving demand in skills for the future . • Understand the issues and drivers of workplace productivity. • Improve the quality of employment regulation and link it more securely to a good practice agenda.