'The new system is also to be built on already existing "employment training pilots"…it is not obvious why the state should subsidise the job-specific training that employers desire. Far more important are general skills. These are hard to acquire after someone leaves school. But if this is to happen at all, it is through individual effort. It makes sense, therefore, for any subsidy to go to individuals rather than employers.'

The centrepeice of the Review (if you ask me) is the shift from planning to ‘demand-led’ as a strategy. But the big question is what does ‘demand-led’ mean. Who should do the ‘demanding’ – companies, who may not be around in ten years’ time. Or the people who work for them, who hopefully will be? What makes a flexible labour market really flexible? Job specific skills chosen by an employer or the skills chosen by a individual with a career, or number of jobs in mind. Can you ‘personalise’ learning if you don’t control the content?

Any thoughts/interesting bits of reading drop me an email or leave us a comment...

As part of this, the strategy is to address skills levels in the workforce. More skills = more opportunity for companies to move up the value chain.The trouble is, moving up the value chain probably incurs greater levels of risk if you are a company. Higher wages. Probably more investment in R&D. Probably more investement in technology etc.

So, whilst it may be that there is more money to be made up the value chain, there is also a higher degree of risk. What do you do if you’re operating in that market? Depends. Maybe you go for the high risk/high profit strategy. Or maybe you settle for a steady profit down the value chain.

i.e. as this study by Future Skills Scotland showed, there may be the skills available to you to move up the value chain but you still decide against it. You suffice with what you have.

What changes this? Presumably strategies which reduce the risk you are taking, or dynamics within the system that force you to embrace it.

…so strategies that reduce risk might include tax breaks/rewards for high value added products, or having a world-class training system that means that companies and individuals can invest in training confident that their investment will have a very positive effect on skill levels

…and dynamics within the system that force you to embrace risk might include competition that undercuts your low-value added products, or legislation, which prevents you from making money from this approach. For example, this study found that that there is a link between: (1) high skills and high value added product strategies, and (2) exposure to competition and high value added product strategies.

So does this skills aren’t the route to shifting the UK up the value chain? If you accept all of the above then no – it means that they are a vital resource, but that a whole set of complementary strategies are needed to make sure the resource is used by companies operating in the market…

During the project we will be posting some thoughts up on this page and bookmarking some of the interesting things that we read during the project here.