Producing skills: challenges and current trends InnoOmnia Gábor Halász ELTE University, Budapest (

A new focus on skills Skills are today seen (together with innovation) as the most important engine of growth and competitiveness EU OECD World Bank ILO G20 Various countries CONTEXT

Four questions to be asked about skills What skills are needed? How to value the demand side? How to produce the skills? How to connect the two worlds?

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Intangible capital and productivity Intangible capital explains about a quarter of labour-productivity growth in the US and larger countries of the EU It explains more than 40% of market value of companies (data from more than 600 companies) Investment in intangible capital is now higher than investment in tangible capital in some developed countries Source: The Conference BoardThe Conference Board

Intangible investment Source: The Conference BoardThe Conference Board Software Databases Computerized information R&D, including social sciences and humanities Mineral exploration and evaluation Copyright and license costs Development costs in financial industry New architectural and engineering designs Innovative property Brand equity Firm-specific human capital Continuing vocational training Apprentice training Organizational structure Economic competencies

Skills are one of largest part of intangible goods Source: Mark Fisher, chief executive of the Sector Skills Development Agency, 2006 (Quoted by Ken Mayhew, SKOPE)Quoted by Ken Mayhew, SKOPE Skills are the simplest, best, most direct way to boost productivity… skills investment is the quickest way to maintain productivity… skills investment is the only way to maintain productivity.

Skills strategies in various countries United Kingdom Ireland New Zealand Australia Canada

Skills demands ( ) Source: New skills for new jobs expert report, 2010New skills for new jobs expert report, 2010

All forms of skills are important Job specific skills Professional skills Generic basic skills High performance workplaces, innovative learning organisations

A balanced view on the supply and the demand side demand side micro (workplace) levelThe recent EU and OECD skills strategies put a particularly strong stress on the demand side and the micro (workplace) level –Skills utilisation is seen as much important as skills production –Shoft from matching demand towards creating high equilibrium

From matching to good equilibrium High demand Low demand Low supply High supply SKILLS SHORTAGE IMBALANCE LOW SKILL EQUILIBRIUM SKILLS SURPLUS IMBALANCE HIGH SKILL EQUILIBRIUM Source: Tackling the Low Skills Equilibrium: A Review of Issues and Some New Evidence

The trap of the low skills equilibrium A low skills equilibrium is a situation where an economy becomes trapped in a vicious circle of low value added, low skills and low wages. Source: Tackling the Low Skills Equilibrium: A Review of Issues and Some New Evidence Source: Tackling the Low Skills Equilibrium: A Review of Issues and Some New Evidence

The high skills equilibrium A dynamic skills ecosystem in which the producers and the users of skills interact so that –increasing demand for higher level skills generates higher level supply –the presence of high level skills generates higher demands

Ways to produce skills Learning before adult life Learning during adult life Learning in school Learning in workplace School based IVET Integrated regional VET centres Company training centres and leaning while working Dual IVET PSDC Malaysia

The implications of growing stress on the demand side and on workplace learning Innovative workplaces (private and public) must be integrated into training centres Training centres must be open to adults and lifelong learning

Bridges and traffic between the worlds of education and work National Qualifications Frameworks bringing all subsystems of education into a common framework Work-based elements included into general education and general competences developed also in work-based learning Dynamic, intensive interaction - the pleasure of discovering each otherDynamic, intensive interaction - the pleasure of discovering each other