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The National Skilling System A new way of looking at skills for innovation

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A higher-skilled workforce is all about more accredited ... EGALITARIANISM. INDIVIDUALISM. RESPECT FOR LEARNING. SOCIAL VALUE. OF BUSINESS. FINANCE SYSTEM ... – PowerPoint PPT presentation

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Title: The National Skilling System A new way of looking at skills for innovation


1
The National Skilling System A new way of
looking at skills for innovation
  • Doug Fraser
  • Australian Innovation Research Centre
  • University of Tasmania

2
1
  • Why a system model?

3
Some convenient beliefs
  • Skilling formal training
  • A higher-skilled workforce is all about more
    accredited vocational qualifications
  • Skill shortages are the result of supply failures
  • Skilling policy should focus on relieving present
    skill shortages
  • Skilling policy must be industry-led
  • Governments job is to provide a stock of
    workforce skills precisely matching the specific
    current requirements of business

4
What is it?
  • A way of understanding how things interact
  • A toolkit for analysing and fixing problems
  • A set of common terms to describe commonly
    recognised phenomena

5
Key features of system models
  • Reciprocal causality
  • (A influences B, B influences A)
  • Self-organisation
  • A system always tries to return to its original
    configuration if disturbed
  • Feedback loops
  • Often lagged or asynchronous
  • Emergent behaviour
  • Behaviour of the whole cannot necessarily be
    predicted from the behaviour of the individual
    parts

6
What system models tell us about policy
  • Multiple points of failure
  • Multiple points of intervention
  • The most effective intervention could occur well
    away from the apparent source of the problem
  • Changing only one thing at a time can have
    perverse consequences

7
How can a system model help skills policy?
  • Alternative perspective (or corrective) to
    simplistic models
  • (demand-driven, stoking the boiler, Human
    Capital theory)
  • A corrective to single-track strategies
    concentrated on the supply side
  • Treats skilling as a dynamic problem
  • Clarifies and delimits the role/responsibility of
    institutional VET
  • Sharper focus on the learning that takes place
    outside purposive training contexts
  • Emphasises importance of the way skills are
    deployed in the workplace

8
Its just a model
  • It exists in our heads, not out there
  • Its validity lies in what it can explain, not in
    some reality reference
  • It simplifies a more complex reality
  • To be useful, it must include only a selection of
    the observable events/phenomena
  • Theres no one correct model
  • Different models of the same situation may be
    needed to explain different aspects

9
2
  • The national skilling system and its components

10
Two kinds of skill system
  • Skill ecosystem (www.skillecosystem.net)
  • Applies within a specific industry, region or
    cluster of firms or jobs
  • Can be modified through coordinated action at the
    local level
  • Multiple ecosystems can coexist in the one
    economy
  • National skilling system (NSS)
  • Applies at the level of the full economy
  • Reflects national laws, practices, cultural
    expectations etc., hence
  • Sets limits on what can be changed
  • Most relevant as guide to large-scale policy

11
Nested systems
SOCIETY
ECONOMY
PRODUCTION SYSTEM
NSS
12
Overlapping systems
Science Technology
Education
Finance
Skilling
Business
IR
13
Assumptions behind the model
  • Stock of formal skills represents only potential
    productivity
  • Formal skills need work-based experience to
    achieve full productive potential
  • 25 of UK jobs need gt2 years to learn
  • under 20 need a month or less
  • Skill decays if not used
  • Skills are enhanced and differentiated through
    work-based learning
  • Firms with identical formal skill bases produce
    widely varying productive outcomes
  • Training market can never adjust instantaneously
    to changes in skill demand
  • Cycles of over- and underinvestment in specific
    skills

14
The three core components
  • Supply
  • All inputs up to the time skill is converted into
    productivity through work
  • Includes formal education and training, informal
    learning by individuals, organisational learning,
    maintenance of existing skills, retention and
    allocation
  • Demand
  • The quantity and types of skilled labour which
    the labour market is prepared to absorb and pay
    for
  • Does not refer to how, or whether, the acquired
    skills are actually used
  • Deployment
  • The processes and arrangements by which skill is
    converted into productive effort in workplaces

15
The national skilling system - core mechanisms
PRODUCTIVITY
16
Components of Supply
17
Determinants of Supply
Labour mobility
Allocation
Information
Retention
Industrial structure
Development
Wages and conditions
Wages and conditions
Social prestige
Organisational learning
Information
Education
Workplace learning
VET
18
Components of demand
19
Determinants of demand
Industry structure
Product strategy
Complementary assets
Technology
20
Components of deployment
Workplace/ management culture
Work/ management practices
Work organisation
Organisational forms
21
Determinants of deployment
Product strategy
Technology
Labour force characteristics
Employment relationship
Labour Market type
Industrial Relations system
22
Example factors behind skills shortages in
construction after 2000
  • Underinvestment in apprenticeships in early 90s
    (formation)
  • Diminishing attractiveness of apprenticeships
    from 80s onwards (recruitment)
  • Ageing of current workforce (replacement demand)
  • Many qualified building tradesmen working out of
    trade (retention)
  • Policy-induced spike in demand from late 1990s on
    (vacancy demand)
  • Qualified workers unable/unwilling to move to
    some areas of high demand, e.g. remote mining
    towns (allocation)

23
3
  • The role of institutions

24
What are institutions?
  • Abstract, intangible, without volition
  • laws
  • political and administrative structures
  • conventions
  • cultural expectations
  • shared (reference) values
  • Generally found at the societal level
  • Historically grounded
  • Must be mutually reinforcing for a national
    system to work
  • Often embodied in organisations or persons
    (institutions in the colloquial sense, e.g.
    courts, parliament)
  • Pervasive influence across areas of activity
  • Slow to evolve and hard to change

25
What institutions do
  • Create certainty about how a stranger will react
    to a given action
  • Define what is legitimate
  • An institution can often define a range of
    legitimate actions (e.g. in IR)
  • Coordinate different spheres of activity
    (economic, cultural, social, judicial)
  • Provide points of relative stability in a dynamic
    system
  • Delimit the kinds of policy change that are
    feasible in a given society

26
Example the education system
  • Number of years of schooling
  • Primary/secondary/upper secondary divide
  • General/vocational divide
  • Boundary with training system
  • Years of compulsory education
  • Years normally completed before workforce entry
  • Does this vary between social classes?
  • Universal or differential access
  • Structure of post-secondary education
  • Relative importance of rigour, competition,
    accessibility, etc.
  • Selectivity
  • Role of common standards, curriculum, testing,
    etc.

27
Institutions in the NSS
  • The education system
  • The training system
  • The occupational hierarchy
  • The employment contract
  • The labour market
  • Managerial culture
  • The finance system
  • The IR system
  • The science and technology system

28
Levels of institutional influence
VALUES/ BELIEFS
INDIVIDUALISM
EGALITARIANISM
RULES/ CONVENTIONS
FINANCE SYSTEM
INSTITUTIONAL AGENTS
MANAGEMENT CULTURE
ALTRUISM
BUSINESS SCHOOLS
INDUSTRY ASSOCIATIONS
OCCUPATIONAL HIERARCHY
RESPONSIBILITY
UNIONS
REGULATORY BODIES
LABOUR MARKET
SELF-RELIANCE
VET FRAMEWORK
UNIVERSITIES
GOVERNMENTS
SOCIAL VALUE OF BUSINESS
GOVERNANCE SYSTEM
EDUCATION FRAMEWORK
RESPECT FOR LEARNING
ROLE OF GOVERNMENT
29
Example 1 institutional success factors in the
German dual system
30
Example 2 Institutional factors explaining low
skill profile of UK workforce in the 80s
  • Economic policies giving priority to City of
    London (government)
  • Capital providers focused on short-term profit
    maximisation (financial system)
  • Lack of career incentives to qualify at
    intermediate levels (occupational hierarchy)
  • Lack of training in intermediate skills (training
    system)
  • Low school retention rates (education system)
  • Tradition of adversary workplace relations (IR
    system)
  • Hierarchical workplace structures with little
    delegated decisionmaking (managerial culture)
  • Easy come, easy go employment practices
    (employment contract)
  • Product strategies built on accurate delivery to
    low specification (managerial culture)
  • Lack of strategic and HR skills among managers
    (education and training systems, managerial
    culture)

31
4
  • Applying the model to policymaking

32
Two kinds of system failure
  • Type 1 (non-functioning system)
  • Elements of system fail to interact coherently
  • System fails to reach stable configuration
  • Type 2 (dysfunctional system)
  • System self-organises smoothly but
  • fails to serve broader human/economic needs

33
Steps in addressing a policy problem
  • Is this a type 1 or type 2 system failure?
  • Where among the key dimensions (supply, demand,
    deployment) do the failure points lie?
  • How many of these do we need to address to get
    sustained change?
  • Which of these is it most feasible/cost-effective
    to tackle?
  • Are there institutional barriers to reaching the
    desired outcome?
  • If so
  • Is it practicable to change the relevant
    institutions?
  • What effect would the change have on other parts
    of the system?
  • Which institutional actors need to be brought on
    board?
  • Is there an alternative positive outcome that
    would be more compatible with Australia's/Tasmania
    s institutions?

34
Possible ways forward for Tasmania
  • Emphasise the essential role of workplaces in
    creating operational, differentiated skills
  • Focus industry policy on maximising incentives
    for learning workplaces
  • Make direct skilling subsidies conditional on
    industry willingness to take collective
    responsibility
  • Focus governments role on creation of broad,
    future-compatible platform skills
  • Deepen theoretical content of Polytechnic courses

35
Some questions to take away
  • What does Tasmanias current skilling system look
    like?
  • What potential/impediments does it offer for a
    higher-skill, more innovative economy?
  • What are Tasmanias skill-relevant institutions
    and how do they behave?
  • Do they interact coherently to form a viable
    system?
  • How well do they contribute to the development of
    a more skilful economy?
  • How could they be changed to serve this purpose
    better?
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