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Work Required – Innovative skills policy for the future

Authors: The Work Foundation Penny Tamkin

12 July 2010

On July 7, The Work Foundation held its third public policy exchange forum that discussed the links between skills and innovation.

The exchange forum featured presentations by Ian Brinkley, programme director of The Work Foundation’s Knowledge Economy Programme and Ewart Keep, Deputy Director of the ESRC Centre on Skills, Knowledge and Organisational Performance (SKOPE)

Ian Brinkley outlined the longstanding concern with skills in the UK,seeking to gain a better understanding of just where the problem might lie. Recent angst has focused on the proportions of graduate level qualifications in the workforce – have we reached saturation point as intimated by the  UKCES in a recent report or is the labour market continuing to absorb increasing numbers of graduates as argued by the OECD? Certainly graduate earnings appear to be holding steady or increasing across most of the OECD which would discount an oversupply problem.

Another staple complaint is that the supply of STEM (Science Technology Engineering and Maths) is insufficient for the UK’s needs but this is not a problem of lack of interest in STEM subjects - the UK has one of the highest shares of graduates entering STEM subjects in the OECD but a dismal record of translating this into workforce entry. Employers report consistently low rates of both skills shortages and skills gaps in their existing workforce whilst significant proportions of employees claim their skills are underutilised. The problem may not be a skills supply, but of job design and development i.e. low skills demand by employers. The skills system needs to be firmly embedded in an innovation ecosystem if we are to make a step change towards a more innovative and productive economy.

Ewart Keep began by pointing out that not all innovation is a good thing – witness the financial products that almost brought economies across the globe to their knees. We have a tendency to see innovation as big hard science, fuelled by large companies in large city regions but we would be much mistaken to think there is only one way, given the good examples of smaller organisations and organic growth in Denmark, for example. Nor should we myopically focus on innovation as product-driven when much is organisation and process - focused.

The problem with process-innovation is that most workers are discouraged from identifying better ways of doing things and the UK has low (and decreasing) levels of task discretion. Employers could do much more to encourage concern for business improvement and create the conditions for workplace learning. However the UK has no history of doing so. It has limited employer collective capacity and needs to begin to experiment with the ways and means to encourage both technical and organisational innovation and perhaps take a leaf from the skills ecosystem pilots in Queensland.
The message from the exchange forum is that there is nothing yet in emerging government policy that will create the right organisational conditions for innovation. If we do not tackle this we will be facing a decade or more of low growth and a depressed economy. What public policy makers, unions, associations, employers and employees need is to come together to experiment in honest enquiry and find what works to raise demand and ambition and fuel innovation.

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