The OECD Skills Outlook report 2017, launched today has revealed that the UK may lose it’s competitive advantage if it does not improve its skills mix to ensure that it meets the skills requirements of technologically advanced industries – the full UK breakdown is available here.
“Countries increasingly compete through the skills of their workers. When workers have a mix of skills that fits with the needs of technologically advanced industries, specialising in those industries means a comparative advantage,” said Andreas Schleicher, OECD Director for Education and Skills, launching the report in London. “Equipping workers with new skills in areas like decision-making can also reduce their vulnerability to the risks of offshoring.”
“In GVCs, where multiple inputs may cross borders many times before a final product reaches consumers, and where, on average, one-third of jobs in the business sector depend on demand in foreign countries, innovation is key for employment. Employment grows even in the more routine occupations, when sectors innovate” says Andrew Wyckoff, OECD Director for Science, Technology and Innovation, co-launching the report. “And innovation will not happen in the absence of the right skills and skills mix”.
To get the most out of GVCs, industries need workers with literacy, numeracy and problem solving skills, prowess in management and communication and a readiness to keep learning. The more firms that have workers with these skills, the more productivity gains from GVCs will spread across whole economies. Yet OECD analysis has found that about one adult in four across OECD member countries have low literacy or numeracy skills.
The Skills Outlook finds that countries which have benefited from GVCs by increasing their specialisation in technologically advanced industries, improving the skill mix of workers and achieving good social or economic outcomes include Germany, Korea and Poland.
Conversely, Finland and Japan have highly skilled workers but could benefit more from GVCs if they deepen their specialisation in high-tech industries. Countries where worker skills are best aligned with the needs of high-tech industries include the Czech Republic, Estonia, Japan, Korea and New Zealand.
Investing in skills, along with increased participation in GVCs, is particularly important in developing economies that tend to be at the lower end of value chains and where working conditions are more often poor.
On average in OECD countries, one third of jobs in the business sector depend on demand in foreign countries and 30% of the value of OECD country exports comes from abroad.
Steve Hill, External Engagement Director at The Open University, expressed concern at the report’s findings:
“The UK is in the grips of a skills crisis, lagging behind its international competitors. The UK Government has pushed to create more apprenticeships, including degree and higher level apprenticeships, to improve the skills economy and the employability of people of all ages, but there is still a long way to go.“Work-based training provides the ideal opportunity to strengthen the links between education and the labour market, and apprenticeships give all people, especially those from disadvantaged backgrounds, a ladder of opportunity and the chance to train in the skills desperately needed by employers. However, this relies on eligible employers taking full advantage of the apprenticeship levy and training up staff in the skills they require for today and the future.”