Government policies failing to improve UK skills and productivity

May 20 2003 by Brian Amble Print This Article

Current government skills and innovation policies will not succeed in making Britain a high performance economy capable of holding its own in the global economy, according to new research by the Economic and Social Research Council (ESRC).

Efforts to improve the quality of the supply of labour are also being hindered by the bewildering range of public bodies seeking to offer training opportunities.

While the case for greater skills and innovation has become almost unquestioned among public policymakers in Britain, the ESRC says that a coherent policy response to workplace realities is currently lacking. Only a new and more radical approach to workplace change can improve performance and raise labour productivity levels.

"The language of the Government and industry about the importance of transforming the country into a high skill information and knowledge economy may be inspirational but the gap between its perceptions and the reality we face so often across many workplaces remains very wide," argues Robert Taylor, media fellow on the ESRC Future of Work Programme.

"We must reassess the state of the current discussion about future skills and innovation needs and question some of our underlying assumptions and public policy prescriptions," he argues.

The research indicates that no serious attempt has yet been made to relate the apparently self-evident need to promote skills and innovation to the actual internal modernisation of companies and the way in which jobs are being organised or restructured in existing and new workplaces.

Policymaking, to date, has focused almost exclusively on the introduction of measures to enhance the volume and quality of skilled workers in the labour market.

But, suggests Mr Taylor, "the primary lesson to draw from current research is that Britainís productivity problem and the countryís future as the centre of innovation would be immeasurably improved if we focused much more of our attention than we are doing at the moment on the nature of workplace organisational change and not simply on the ups and downs of the labour market, not so much on individual employee needs and more on the framework of institutions within which paid work is being organised."

Current policy is failing to produce high performance workplaces because they ignore the importance of organisational change in creating a more skilled workforce. Moreover, few UK firms give a top priority to the need for the creation of a high skills workforce because their basic business activities do not require them to do so.

As long as companies can continue to prosper or even merely survive in pursuit of low cost/low value activities, there is little incentive for them to modernise.

If Britain stands any prospect of becoming a predominantly high skills, knowledge-based economy, the ESRC argues that new forms of public intervention are required.

For example, giving much stronger public support to businesses in the restructuring of their product market strategies towards the provision of high value added goods and services through the selective use of public sector purchasing and the encouragement of employers to pursue a quality of working life agenda that links the drive for new job re-design to more innovative forms of work organisation.

Professor Peter Nolan, Director of the ESRC Future of Work Programme, points out that the emphasis in practice on the production of low skill and low value products and services continues to remain a powerful one. "The barriers remain formidable to the construction of a vibrant, technologically advanced and knowledge intensive workforce," he says.

Ultimately, the most important message highlighted by this current research concerns what kinds of public policy are best able to improve performance and raise labour productivity levels, argues Mr Taylor.

"Too much of the present approach remains top-down, ad hoc and fragmented," he concludes. "It is over-managerial in its tone and substance and concerned primarily with the implementation of supply side external labour market measures.

"What is currently lacking is the development of a comprehensive skills and innovation strategy that is more in tune with the encouragement of workplace reorganisation and institutional change. This is why public policymakers need to turn much more of their attention to the changing needs of workplaces and the actual structure and skills contents of jobs."