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The Evolving Concept of the Knowledge Based Economy. There is no universally accepted definition of the knowledge based economy As a. concept it is very loosely employed and embraces a number of quite different visions of. the economy and society, One view most evident in OECD publications sees it as very much bound up with. the high skills high performance high value added scenario as the only way for. firms to compete in a globalised economy, Another view found principally in the scientific and technical community tends to. view it more narrowly as applying to knowledge intensive industries where. knowledge itself is the core competence The latter is typically found in software. and internet companies computer hardware and chip manufacturers computer. and electronic equipment sectors and health care technology1. A third view the one adopted in this paper is that all sectors of industry are. becoming more knowledge intensive in the very broad sense of that term. Knowledge is seen as a potential generator of productivity improvements in areas. as diverse as quality customer service variety speed and technical. improvement as well as innovation in products processes and organisational. structure and behaviour As companies alter the way their organisations are. structured flatter non hierarchical team based multi skilled in order to compete. more effectively so too workers have needed to obtain a more complex range of. cognitive and intellectual resources, This research project seeks to extend our understanding of the impact of the knowledge. based economy on the content of work and training It does this by acknowledging. multiple perspectives on how economies grow and by embracing new definitions of. skills knowledge and training that reflect recent research In this project a knowledge. based economy is defined as one that is increasingly dependent for its growth on the. input of knowledge as a value added input to the economic system This is reflected in a. change in the basis of competitiveness for economies organisations and individuals. This is realised in four interrelated ways, First such economies experience a changing structure exemplified by new. industries occupations and organisational arrangements. Second there is a change in the types of skills required with a rise in the. importance of generic skills including the ability of individuals to work more. autonomously be self managing work as part of flexible teams adapt to change. solve complex problems think creatively and engage with innovation as a. continuous process, Third the economy requires new forms of knowledge and places increased. importance on the creation and application of knowledge in networks or clusters. of companies enterprises and within communities of practice where workers. are required to work together in new and more complex ways. For example refer June 1999 issue of Business Higher Education Round Table newsletter on The. Knowledge Economy, The Knowledge based Economy Implications for VET Page 2. Fourth innovation becomes more important as a means to increase economic. competitiveness and knowledge management becomes increasingly the key to. sustainable competitive advantage requiring individuals firms regions and indeed. complete economies to acquire create and use knowledge as the key productive. Since the 1960s there has been a growing awareness of the decline of the importance. of the control of resources for wealth creation the emerging dominance of specialist. knowledge and competencies as well as the management of organisational. competencies and knowledge, In Post capitalist Society 1993 Drucker argued that in the eighteenth century the basis. for economic development was machines and factories and new industrial technologies. This knowledge was applied to tools processes and products The early part of this. century was marked by the development of new forms of knowledge characterised by. systems of embedded knowledge applied to human work This was the knowledge of. systematic routines In the late 20th century new forms of knowledge are now becoming. necessary and specialised knowledge workers are growing in number These workers. are unlike previous generations of workers not only in their high levels of education but. because for the first time they own the organisation s means of production knowledge. Drucker has further suggested that as a result traditional ways of thinking about. organisational structures need to be discarded In their place new ways are needed to. view and construct organisations based around specialised workers team based work. flat management structures and flexible practices, The stability of traditional production systems product markets company structures and. corporate relationships have been shaken by the fast rate of technological change. Technological innovation and access to knowledge and skills are more than ever key. drivers of innovation and their application has become central to the competitive strategy. As Kanter 1995 has pointed out future success will come to companies that can meet. global standards and tap into global networks Similarly the cities and regions that will be. most successful in the 21st century will be those that are best at linking businesses to the. global economy Hobday 1995 has pointed out that technological innovation has played. a significant role in the economic transformation of many Asian countries Entire. industries and geographical regions can be invigorated by technological change It has. been estimated by Cooper 1993 that new products less than five years old account for. 52 of sales and 46 of profits for US firms At all levels it appears that. competitiveness depends on technological innovation. In summary in advanced economies in the last two decades there has been growing. recognition of the need for workers who can function with new forms of knowledge. rather than low skilled workers who can function only with routinised knowledge. Two different paradigms exist for understanding knowledge and skill They both have. implications for how the relationship of individuals enterprises and networks of. enterprises to the knowledge economy is viewed One paradigm is based on an. understanding of knowledge and skill as dependent on conceptual skills and cognitive. abilities primarily of individuals The second and emergent paradigm suggests that the. appropriate unit of analysis is neither individuals not organisations but socially. distributed activity systems That is to say knowledge is not something that resides in. the heads of individuals Knowing is mediated through systems of language. technology collaboration and control it is situated in time and space and particular. The Knowledge based Economy Implications for VET Page 3. contexts it is provisional constructed and constantly developing and it is pragmatic. purposive object oriented Blackler 1995, Rather than studying knowledge as something individuals or organisations supposedly. have these new theories and approaches study knowing as something that they do. and analyse the dynamics of the systems through which knowing is accomplished The. learning theories that inform this work are activity theories Engerstrom 1994 and social. learning theories Lave and Wenger 1991 Vygotsky 1978. The distinction is critically important for VET, one paradigm implies business as usual with its focus on individuals and the role. of VET in upskilling individuals, the other directs attention towards networks or clusters of. companies enterprises or communities of practice that is people who need to. work together in some way but who may be distributed through an organisation. or in different organisations and implies a need to reconceptualise the role of. Cairney 2000 has suggested that regions seeking to compete more effectively within a. world economy will need to develop soft structures that support knowledge creation. and learning and that enable firms to collectively strengthen a region s capacity for. knowledge creation and innovation Key institutions such as universities VET providers. regional development organisations and business chambers are amongst the most. important institutions within regions Such organisations act as key knowledge creators. and trainers as well as a means to collect relevant knowledge in the international domain. and vehicles for communicating this effectively through a variety of mechanisms and. relationships, The concept of the learning region has emerged to describe those places that offer an. institutional environment that encourages both private and social learning at four different. scales the individual workers the individual firm groups or clusters of related firms and. government bodies Learning regions are less dependent on the individual excellence of. their educational institutions as they are on the extent to which their key institutions. organisations and industry are able to trade support and jointly create knowledge and. knowledge networks The success of key regions throughout the world has been due in. no small measure to social or collective learning processes in which the role of the. region is to animate the formation of interaction relationships between individual firms. and between firms and other regional institutions Such regional organisations should. also be thought of as learning organisations themselves in that they actively seek to. emulate and learn from successful experiences of counterpart agencies in other regions. and nations, Marceau et al 1997 have argued that a learning economy is both knowledge and. innovation intensive and is usually technology driven Regions that will make economic. progress are those that have high rates of innovation and learning that are greater than. those of their competitors are Growth in real terms will be produced by activities based. on knowledge generation through investment infrastructure human capital innovation. research and development and advanced training, Recent writing and policy pronouncements on the knowledge based economy emphasise. its potential application to all businesses in all sectors It has become accepted wisdom. The Knowledge based Economy Implications for VET Page 4. that firms must incorporate knowledge management into their core business strategy to. ensure they remain competitive Knowledge is seen as a potential generator of. productivity improvements through innovation and creativity across the board whether. in relation to product quality customer service variety speed or technical improvements. e g see Neef 1998, The movement towards enhanced importance for knowledge as a driver of economic. growth is widely seen as a response to the processes of globalisation technological. change and the intensification of international competition Official thinking by OECD as. well as governments of industrialised nations posits knowledge as the main driver of. growth wealth creation and employment OECD 1996 DISR 1999 DfEE 2000 with. learning skills enhancement innovation and enterprise as the cornerstones of the new. economy The phrase knowledge based economy has become shorthand for the. emerging set of economic activities structures and arrangements that are the result of. these global processes, Some view the knowledge economy as synonymous with the shift into a new high skills. high performance mode of working reflecting a belief in a workplace change led. response to global pressures This shift in thinking requires both changes in work. organisation as well as more workers to whom high levels of discretion have been. delegated in order to produce high specification customised goods and services. Current thinking is that the skill profile needs of a high performance work organisation can. no longer be served by skills needs derived from traditional conceptions of work The. skill requirements of emerging technology and innovative work organisation require a. new combination of content skills process skills cross functional skills social skills self. managing skills and complex problem solving skills. A variant on this view holds that the knowledge economy is not so much concerned with. higher skills as with the needs of business enterprises for a broad range of general. aptitudes abilities and skills that can be applied to the increasingly cognitive demands of. jobs and the new ways of thinking and managing In this modern economy all workers. will need to become lifelong learners A widely held belief is that they will need the. intellectual resources to be self managing to engage in continuous learning and to master. new skills and behaviours in order to meet the ever changing needs of more dynamic. product and labour markets Drucker 1999 For Brophy 1998 everyone in the. workplace can be creative it need not be the preserve of the few Hopkins and Maglen. 1999 echo this optimistic vision of the knowledge based economy and the opportunities. and benefits it offers to successful lifelong learners of the future. These diverse understandings of the defining characteristics of the knowledge based. economy can be summarised as, new industries and organisational structures which are heavily dependent on. changing occupations and skill structures which privilege particular kinds of. knowledge production ie knowledge workers, highly intensive workplaces requiring a range of new forms of knowledge and. generic skills and competencies, an increased importance for innovation in order to sustain the competiitive. advantage of individuals firms regions and economies. Having said all of the above we need to stress that much of the writing on the knowledge. based economy has a polemical flavour and is contested The widespread growth of. knowledge based economies is a vision for the future rather than an empirical reality. The Knowledge based Economy Implications for VET Page 5. What is being articulated in much of the literature is an action agenda and strategy aimed. at moving economic activity in the developed world out of the old Fordist and Taylorist. paradigms into a new high skills higher performance mode of working. Running through much of the VET literature in Australia and internationally is a set of. beliefs that have become part of the conventional wisdom about the knowledge based. economy and the kinds of policy initiatives needed to support movement towards such an. economy These include such beliefs as, The only sustainable source of competitive advantage for a developed economy is. one based on a highly educated and skilled workforce. Boosting the supply of skilled and educated employees will of itself act as a. catalyst for economic change and enhanced productivity and competitiveness. High levels of skill are an important prerequisite for high value added production. The high performance workplace is associated with improved organisational and. economic performance, High performance workplaces call forth new skill demands. The drivers of upskilling and value adding through higher skills include a. commitment on the part of employers to lifelong learning. Recent theorising and empirical research on links between the acquisition and use of. skills and knowledge product market strategies and economic performance suggest that. many of these beliefs and assumptions may be ill founded. At a general level there are difficulties in establishing a causal link at firm level between. skills and competitive performance This has been recognised by commentators such as. Keep and Mayhew 1999 writing in respect of UK VET policy. The problem with linking training to economic success suggests that a single model. of competitive advantage based solely on skill may not accord with present day. reality in Britain In fact companies are faced with the choice of product market. strategy and with a variety of means of securing competitive advantage in the. short medium and long term Some of these can be pursued in parallel with. attempts to upgrade skills but others are more or less incompatible with a high. skilled high wage high value added approach, It is apparent that many organisations are not following this so called Reichian model of. competitive advantage through skill Clearly there are alternative strategies in addition to. the skill based ones not least strategies based around standardised mass production of. both goods and services Regini 1995 suggests that the model of a high skills high. value added strategy allied to a supportive VET system that can deliver a highly educated. and trained national workforce as for example in Germany is simply one of a number of. viable models available to firms and nation states Far from a single simple universalistic. movement towards higher value added and higher quality goods and services throughout. the developed world different companies sectors and even countries are following a. range of divergent trajectories These alternatives include seeking protected markets. growth through take over seeking monopoly power cost cutting and new forms of. Two trends are worth noting here First recent events underline the continuing perhaps. growing importance attached to merger and acquisition as a prime source of competitive. advantage Second far from being dead Fordism and neo Fordism is a growing and. powerful model of competitive advantage in some industrialised countries especially. within large swathes of the service sector While mass production may be declining as. The Knowledge based Economy Implications for VET Page 6. the dominant model for the manufacture of consumer goods it offers in combination with. economy of scale advantages the promise of salvation to many major retail chains retail. banks and insurance companies Management is seeking to achieve the lowest possible. cost base seeing as the key to profitability the delivery of a narrow range of. standardised goods and services in markets which are primarily driven by price Keep. and Mayhew 1999, Further support for the viability of alternative strategies to the high skill route is found in. Culpepper s assessment of the future of the high skill equilibrium in Germany He. observes how West German manufacturing companies in the 1980s maximised their. international competitiveness by aiming at less price sensitive niches where customers. most valued the ability to make incremental customisations to existing technology. Recent research in enterprises places a question mark over the necessary link between. high skills and high spec high value raising the possibility that soon it may be feasible to. produce high spec by Fordist production ie low skill methods Wensley 1999 Other. companies appear to be attempting a mixed model with limited efforts at upskilling part of. their workforce whilst also laying emphasis on cost cutting increased casualisation of. part of the workforce and organisational restructuring aimed at achieving significant. economies of scale advantages, The linkages between workplace redesign skill development and economic performance. as measured by increased productivity are difficult to establish A wide ranging study. on workplace learning in EU Member countries Mehaut and Delcourt 1994 found that. many reorganised firms were success stories in terms of increased productivity but not. necessarily in terms of workforce skill development Black and Lynch 1997 analysed. data from the 1994 US Educational Quality of the Workforce National Employers Survey. They found that what is associated with higher productivity was not so much whether or. not an employer adopts a particular work practice but rather how that works practice. was actually implemented within the firm The main variable accounting for business. success was the introduction of practices that encouraged workers how to think and. interact to improve the production process In Britain an assessment of companies with. the kitemark of Investors in People signifying a high performance workplace showed. that most employees felt that the IIP process had left their workplace untouched Those. who did notice a positive effect were more likely to be the lower graded and lower paid. employees Employers for their part were muted about how far investing in a person. was associated with organisational performance in improved financial performance. A survey of new forms of work organisation of European countries found them to be. very much a minority movement For instance the proportion of workplaces with semi. autonomous group work approximating the Scandinavian model extensive delegation a. highly qualified workforce and high levels of training intensity was less than two. percent of the sample The OECD acknowledges that until now workplace change that. truly supports these objectives in a sustainable fashion has not been widely diffused. The paradigm of the knowledge based economy however appears to reflect a growing. consensus about the nature of wealth generating enterprises of the future but nations. and in fact cities and regions must identify the response to the emerging economy that is. most appropriate to themselves, Consideration of the above issues with reference to the definition of the knowledge. based economy that has framed this research leads the project to explore three related. factors affecting the role of VET, The Knowledge based Economy Implications for VET Page 7. the nature of organisations in knowledge based economies. the forms of knowledge required in emerging knowledge based economies and. the impact of a need for new knowledge on the content of work. There is a need to look at knowledge knowledge production and training of knowledge. workers in new ways An improved understanding of how the knowledge economy is. developing will clarify the role of VET and its relationship to the learning needs of. individual workers companies industry clusters and regions. The high skills low skills economy, Researchers and policy makers alike have posed a strategic choice for nations between. a high skills economy and a low skills economy the consensus being that industrialised. nations must choose the first route to remain globally competitive Germany and Japan. are often singled out as archetypal examples of the high skills economy while the UK. exemplifies the low skills route Ashton and Green 1996 Australia s small domestic. market and proximity to countries with large supplies of relatively cheap labour is widely. seen as propelling it towards the high skill route However comparison of vocational. qualifications profiles of workers in different industry sectors suggests that on that. particular variable Australia is closer to the UK than to countries like Germany Maglen. and Hopkins 1998 Marceau et al 1997 in their influential report The High Road or the. Low Road challenge Australia to choose the high skills path. There is a growing body of research and analysis which points to the more complex. issues involved in remaking a country s industrial future Writing more than a decade ago. Finegold and Soskice 1988 introduced the notion of the low skills equilibrium to explain. why in Britain both employers and the workforce were unwilling to invest in the skills. needed for a modern economy In shifting the focus of debate from supply side to. demand side factors they raised the possibility that employers characteristic attitudes. towards skill might be a rational response to the institutional conditions For example. short term financial markets an adversarial industrial relations system and a low supply. of skills in the labour market in which they operated. Finegold and Soskice s seminal idea that a nation might be trapped in a self reinforcing. network of societal and state institutions which interact to stifle the demand for. improvement in skill levels has had an important influence on VET policy and research in. the UK as well as globally, First it has drawn attention to the importance of a multi stranded and systemic. approaches to tackling issues of skill deficit and reskilling of the workforce. requiring enabling government action that goes well beyond the VET policy. domain There appears now to be a general consensus that creating a high skills. economy goes far beyond the relatively simple issues of skill supply and means. addressing major structural items, Second in highlighting the significance of demand side factors it has prompted a. major line of research enquiry centred on micro behaviour in product strategies at. the enterprise level and the implications such choices have for the distribution of. knowledge and skill throughout the workforce A recurring theme in this research. concerns the rationality of employers decisions to compete on the basis of low. cost low value and hence low skill low investment in training where their. strategic marketing analysis supports such a product strategy. The Knowledge based Economy Implications for VET Page 8. The corollary to a low skills equilibrium namely a high skills equilibrium has also been a. focus of research interest This has been most evident in studies of skill formation and. political economy in newly industrialised economies Ashton and Sung 1996 Green et al. 1999 as well as comparative studies in which Germany is often the archetypal case. Culpepper 1999, This research has served to highlight the cultural specificity of many skill supply. mechanisms and their location within broader systems of production industrial relations. inter firm networks industrial capital corporate governance and politics Keep and. Mayhew 1999 Paradoxically the same institutional factors that have made the German. VET system or the Japanese VET system extremely successful in creating large supplies. of individuals with intermediate skills appear to have made them poorly suited for the. development of individually driven collective learning at the most advanced skill levels. needed in new high tech firms Curtain 1996 The world economy may be becoming. more global but education and training remains an area where skill supply systems. continue to differ quite radically from one country to the next. Finegold 1999 has now moderated his stark categorisation of a national economy as. either predominantly a high or a low skill equilibrium seeing this now as a major over. simplification of reality There significant high skill regions or industries existing within. otherwise relatively low skill economies for example the Third Italy or the UK s. pharmaceutical and aerospace sectors International comparisons of economic. performance suggest that there are at least three meaningful skill segments in most. countries intermediate or medium as well as high and low skill and that the. requirements for success in each skill segment may be very different Crouch et al. Considering also that the rapid pace of change in technology and global competition. reduces the value of static frameworks Finegold now prefers to speak of self. sustaining high skill ecosystems HSEs rather than high skill equilibrium economies and. has examined the conditions that give rise to HSEs. Drawing on cases of the highly successful biomedical and computer hardware. and software firms clustered in California his research shows how HSEs once. started generate a positive mutually reinforcing dynamic that fuels ongoing. knowledge creation and growth and adaptation to changing competitive. conditions, He observes both the multiplier effects of high tech companies in a wide array of. relatively high paying service sector jobs in the region high quality restaurants. real estate agents auto dealerships travel agencies and their coexistence with. a large much lower skilled and lower paid workforce These individuals work in. some manufacturing assembly and lower skilled support service jobs in the. same high tech sectors as well as providing personal services to the higher. skilled workers Income inequality between these high and low skilled workers. appears to be widening in these regions even more than in the USA as a whole. Finegold also shows how skill development operates differently in a high skills. environment than in the traditional economy This supports earlier work by Stevens. 1999 who predicted low levels of employer investment in formal training in firms in high. technology regions For the scientists and engineers who are the key drivers of. knowledge and wealth creation in these high skill regions informal learning was seen to. offer greater utility than formal learning, The Knowledge based Economy Implications for VET Page 9. The following characteristics seems to be evident in turbulent high skill environments. a dynamic interplay between the high labour mobility of employees within these firms in. a free market environment, collective social learning processes and a flow of tacit knowledge surrounding. innovation made possible by such mobility, a willingness of individuals to enter a new employment relationship in which. employability the continuous development of marketable skills has replaced. employment security, a critical mass of employers all demanding a similar skill set where individuals can work. without having to move location, In relation to Australia Curtain 1996 draws together evidence from primary and. secondary data sources indicating a nation trapped in a low skills low quality cycle. Comparative data on skill formation arrangements in the major industrialised. countries suggest major deficiencies in Australian skill formation practices as. well as low demand for high quality intermediate skills in the Australian economy. The focus on the production of low level standardised skills through the. apprenticeship system has laid the basis for occupational markets Employers in. the past supported this method of industry wide or cross industry skill formation. because their need for high level enterprise specific skills was minimal. Three sets of survey results cited by Curtain produce a consistent finding. Australian enterprises see no link between skill formation practices and high. performance and many small and large enterprises fail to approach their training. requirements on a systematic basis A strategy is often lacking at the enterprise. level that would link skills upgrading to other changes in the workplace with the. result that enterprises are unlikely to foster the competitive intermediate skills that. are the basis of the German and Japanese export sectors. As factors contributing to a low skills low quality outcome Curtain identifies the small. size of firmsthe comparatively low level of technology used by manufacturing industry. the short term planning focus of most enterprises the attitudes of managers employees. and unions that have been shaped by these structural factors the limited value added. downstream processing of primary commodities and a narrow imporsubstitution. orientation fostered historically by high levels of protection. What is happening to occupations and skills,a The changing skill map. Until fairly recent times skill was seen as involving either high level educational. qualifications and analytical capacities or hard technical abilities combining physical. dexterity spatial awareness and technical know how In the main people saw skill as. referring essentially to the technologist the scientist the technician and the craftsman. By the 1980s the concept of skill had begun to shade into the realm of values. behaviours and dispositions Today what policy makers and indeed employers have in. mind when they talk about skill is considerably broader than in the past Skill has. expanded to include a veritable galaxy of soft generic transferable social and. The Knowledge based Economy Implications for VET Page 10. interactional skills that are frequently indistinguishable from personal characteristics. behaviours and attitudes which in the past would never have been conceived of as skills. at all Payne 1999, Critics of this broadening of the skills concept observe that skill is now so loosely. defined that it stretches across both high and low skill sectors of the economy allowing. policy makers to claim that we are all part of a high skill knowledge economy The sleight. of hand whereby we are all skilled in the new economy devalues the currency of skill. when in the past to be skilled implied some level of real market power and personal. discretion over one s work, In the literature we find two different responses to the ambiguity and diffuseness which. now surrounds the concept of skill, In the UK there is some questioning as to whether VET has a role to play in. preparing workers with these soft skills on ethical and social grounds Many of. these desirable personal characteristics are bound up with the cultural capital of. different social groups as well as on pedagogic grounds to do with their. transferability the so called generic skills require contextually specific. knowledge and understanding Others are uncomfortable with the idea that the. VET system should concern itself with developing motivation in the context of. jobs which are poorly designed lacking in discretion monotonous and closely. supervised New research indicates for example that in parts of the style. conscious service sector trendy bars hotel and retail outlets may be searching. for aesthetic labour where having the skill is about having the face body image. and grooming that fits the corporate image and sells Nickson et al 1998. US commentators on the other hand have suggested that if skills are really to do. with attitudes behaviours and personality the so called Third Dimension. Expertise of the new post Fordist human resource driven workplace then the. case for involving the education system in their development is made all the. stronger Capelli 1995 Their analysis however pushes them back to the. school system as the site where such skills need to be addressed. There is a second issue to do with the changing skill map and the way in which it maps. onto occupations, Ashton Felstead and Green 1998 constructed an index of the change in average skills. required for a job the variables are required education training time and learning time. They used UK survey and case study data to calculate the extent to which overall skill. upgrading in that country has been accounted for by. changes in the occupational composition of the workforce and. changes in upskilling within occupations, They calculated a rise between 1986 and 1997 in the required skills Half of the rise in. skills required was due to occupational changes But half was due to skill upgrading. within occupations Splitting their sample into 1986 92 and 1992 7 there was no strong. evidence that upskilling has gathered pace, Their survey and case study data suggest that for a great many occupations. occupation specific vocational skills are fading in importance relative to cross. occupational skills When this fading becomes especially large the occupation ceases to. The Knowledge based Economy Implications for VET Page 11. be a distinct category If that happens in very specific ways and two occupations meld. into one it is probably not a profound problem but when many different occupations all. blur into each other the system becomes almost meaningless The latter is not happening. at present but may occur in the future, In their assessment of skill changes in the Australian economy Tegart Johnston and. Sheehan 1998 similarly observed that on the traditional understanding of skill the. employed workforce is not becoming more skilled Employment growth is strong not only. in managerial and professional occupations but also in some low skill occupations while. employment is falling in many traditional skilled occupations Significantly employment is. growing rapidly in many person based or information intensive occupations not. previously regarded as skilled but which clearly involve skills of value to modern. employers Tegart and his colleagues suggest that this continuing change in the nature of. the skills in demand is a major challenge both for policy and for educational and training. institutions, It is common in much labour market and VET research to use educational qualification or. the number of years of schooling as the proxy for skill levels in the workforce Using this. variable most advanced industrialised countries appear to have experienced an upward. trend in the average occupational status This measure of skill trend has however been. contested by some social scientists observing that while occupational titles may remain. steady for decades the content of each occupation may be radically altered leading to. higher or even lower skills, In an analysis of changing work skills in Britain Green et al 1997 employed a new. methodology designed to examine skills actually used at work rather than just the. qualifications obtained by the population Their findings showed a remarkable and. consistent pattern of increasing skills used in Britain deploying several different. measures of skills This was true for both ends of the occupational spectrum giving little. support to the claim of polarisation of the workforce for those in employment at least. In the aggregate jobs in 1997 compared to jobs a decade earlier were more likely to. require qualifications including high level qualifications for recruitment and broadly no. less likely to need those qualifications to be used in work that is there was no evidence. of over education or credentialism The study findings thus gave little support to the. sceptics who question how far these new qualifications are always necessary or. appropriate for the jobs that people later do On the other hand it may still be argued that. people in jobs for which they are over educated nevertheless transform those jobs. The survey findings also revealed something about the types of skill change that is taking. place Comparing 1997 with 1993 there has been on balance an increased usage of. problem solving skills of communication and social skills and of computing skills and at. the same time a reduction in the use of manual skills. In the US Wolff 1996 used a combination of quantitative and qualitative data. occupational information contained in the Dictionary of Occupational Titles to estimate. the cognitive interactive and motor skill required for satisfactory job performance in each. detailed occupation in the US economy By combining these with time series estimates of. the occupational structure over the period 1950 to 1990 he was able to conclude that. there had been a significant increase in the use of cognitive and interactive skill in the US. and a decrease in the use of motor skill, Pappas 1998 adopted a similar methodology both to test the generality of the Wolff. results and to map the evolution of the Australian labour market between 1976 and 1995. The Knowledge based Economy Implications for VET Page 12. He found accelerating growth in the use of cognitive and interactive skills in production. since the mid 1980s and a decline in the use of motor skill The observed changes in. cognitive and interactive skill were strongly correlated with various indicators of. technological change suggesting that these skills complement new technology Change. in motor skill on the other hand was positively correlated with a general indicator of. technological change but was negatively correlated with computerisation The results. suggest that technological change is reducing the demand for unskilled labour and that. developments in information technology and structural changes are reducing the demand. for motor skill This trend seems likely to accelerate as changes associated with the. increasing uptake of information technology are yet to have their full impact OECD. b Skill Taxonomies, As changes occur in the nature of work and occupations and the requirements made of. workers within new jobs and occupations definitional shifts in skills and skill profiling. systems are currently under scrutiny in most industrialised nations Many labour market. researchers have identified the need for new typologies that take account of the nature. and growth in the information sector in particular its blurring of traditional industrial. boundaries, In the US initiatives aimed at developing new comprehensive taxonomies of occupational. clusters include O NET the electronic adaptation of the new Dictionary of Occupational. Titles DOT The catalyst for the skills standards movement in the United States has. been the changing nature of work and work organisation and the requirements for new. skills and attributes essential to do that work The revised content models of DOT and. O NET reflect current thinking in the US that the skill profile needs of high performance. work organisation can no longer be served by skill needs derived from traditional. concepts of work These new types of skills are referred to as advanced generic skills. The problematic nature of occupational classification is highlighted in the case of 3D. animators This occupational classification has been added to the O NET occupational. classifications as part of a Californian pilot study of the digital and multimedia industries. highlights As the fastest growing sector of the Californian economy it is a. predominantly contract worker sector in which over 70 of the labour force is recruited. from outside the US The sector is increasingly requiring workers with skills beyond. those needed for graphical and digital computing The demand is for workers with fine. arts design and architectural training knowledge producers in the widest cultural sense. Much of it is state of the art process and no current occupational designations are. attached to jobs which have never existed before and which are now only emerging. because of rapid changes in technology People tend to flit between highly competitive. small state of the art companies These innovative companies often have short life. cycles and corporate knowledge bases are not transferable Jobs are thus often. defined in ways that are not transferable to other companies It is not yet clear whether. the O NET approach of allowing occupations to be described in terms of more general. cross descriptors will be effective in this context. Robert Reich 1991 in The Work of Nations proposed a three way classification of. occupations that was intended to capture new and emerging patterns of work in times of. rapid economic and technological change, The Knowledge based Economy Implications for VET Page 13. symbolic analysts are workers for whom problem solving and the application of. specialised knowledge is critical and includes IT professionals consultants and. cultural workers, in person service workers belong to the growing service sector and include. shop assistants waiters receptionists and so on, routine production services cover the traditional blue collar occupations and. repetitive jobs within high technology firms including data processing. Reich argued that the future wealth of a nation would be increasingly tied to its ability to. increase the proportion of symbolic analysts in its workforce. Maglen and Shah 1999 building on Reich s classifications developed a new. occupational framework entailing a major reclassification of existing disaggregated. occupational categories contained in the Australian Standard Classification of. Occupations ASCO The adoption of such a hybrid model allowed them to track the. changes that have been going on within and between the jobs people do based on. retrospective analysis of a ten year series of Australian labour force annual data. Amongst the key findings of their analysis were the following. In broad terms the impact of employment of globalisation of the world economy and. of Australia s increased exposure to it and of the attendant rapid technological. change and organisational restructuring has been more negative than positive. Within the sluggish employment growth over the decade to 1995 6 all of the. stagnation and decline in employment was in categories most vulnerable to. globalisation technological change and restructuring. On the other hand much of the growth that did occur was in those occupational. categories not directly open to global forces and which did not directly add to the. competitiveness of the Australian economy Moreover within the insulated in person. service occupations the strongest growth of all has been at the lowest skill end of. the employment spectrum and mostly in casualised form. Maglen and Shah go on to draw out some preliminary implications of their study for VET. foreshadowing the need for more work in this area First they note that VET has a key. role to play in preparing people both as in person service workers and as conceptual. symbolic analysts For the former high level interpersonal skills not just technical. competencies should be given priority in course design and program development and. delivery And for the latter institutional priority needs to be given to the already. significant source of education and training for a range of conceptual symbolic analysts. especially in the creative arts media multimedia and information technology arenas. Another Australian study Doyle 1999 mapping the rise of the office economy has. taken a different cut across ABS industry categorisations and ASCO occupational. classification using a methodology employed by American researchers Carnevale and. Rose 1998 Office work falls into the study s Administration and coordination category. It includes people who work in finance administration supervision law advertising. sales management marketing and business services They are not employed in goods. production or over the counter retail or hospitality Their role is to trade knowledge. they are knowledge workers The office sector the researchers suggest is driving the. productivity push in Australian businesses by way of adding value through business and. service delivery The researchers analysed survey data from the last five Australian. The Knowledge based Economy Implications for VET Page 14. censuses spanning the period 1976 to 1996 The study findings show that office work. dominates the economy employing 43 percent of all workers and capturing about 50. percent of all earnings Office professionals account for more than half of office jobs. Following Carnevale and Rose the Australian study also classified jobs as elite high. level of training good requiring some formal training education qualifications and less. skilled little or no formal training or educational qualifications for admission Over the. twenty year period of census data elite jobs had increased from 16 to 28 good jobs. had fallen from 48 to 39 and less skilled jobs had stabilised around 30 Over 60. of elite jobs and half of all good jobs were found in the office economy. Regarding what is happening in occupational upskilling especially at the level of. intermediate skills a report compiled as part of the UK Skills Task Force and drawing. together research findings from case studies in the UK Europe and the US suggests that. there is not a single direction of skill change largely because of variations with which. technology and skills can be combined This depends on such factors as managerial. strategy existing skills workplace practices and product markets. In investigating the link between intermediate vocational skills and productivity the report. drew on data gathered from visits to 165 medium sized companies across a spectrum of. sectors manufacturing engineering woodworking clothing and good processing and. hotels in five countries Britain Germany France the Netherlands and the US. Through case study examples the researchers highlight the ways in which production of. similar products differs between companies with access to abundant skills such as. Germany on the one hand and companies operating in a low skill context on the other. UK US In particular it details the contribution of superior skill endowment in Germany. to the higher productivity levels observed in that country Customisation and flexibility in. responding to smaller batch sizes in kitchen manufacture and food processing for. example required more frequent resetting of machines and machine tools and in the. clothing industry skilled machinists required shorter changeover times when a new. design was introduced In the hotel sector the work of unskilled workers was better. scheduled while the supervisor assumed more responsibility for other tasks such as. stock control purchasing and evaluation of new labour saving equipment than did the. British supervisor, Case studies tend to be rather unstructured and sector dependent technical workers in. the service sector managers in the engineering sector and so forth This tends to make. them descriptive and less useful for thinking about the future Structuring case studies. around some more dynamic understanding of employer types for example companies. that do not export companies in rapidly expanding markets contracted out suppliers to. local authorities companies with particularly large or small shares of their market and in. particular around the other drivers of skill needs technological change and consumer. demand might help to identify future skill needs more accurately. c The value attached to generic skills, Many commentators have argued that key skills are becoming more important in modern. workplaces in the context of current technical changes and rising global competitiveness. Most obviously information technology IT skills are argued to be an increasing and. pervasive demand in all industries However a range of skills have become more. valuable As trade pressures increase it has been argued that companies need. increasingly to have the capacity to innovate and keep ahead of competition Since rigid. old style forms of work organisation cannot achieve this there is increasing demand for. the skills associated with flexible workplaces Good communication whether with. The Knowledge based Economy Implications for VET Page 15.
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