Skills - a quick fix?

26 Jun 2015 7:11 PM | John Heap (Administrator)

In the UK, the Confederation of British Industry (CBI - which represents British business organisations - especially larger ones) is asking the government for tax changes in the forthcoming budget to allow further investment in machinery/equipment and in skills development.

Whilst accepting that one of the roles of government is to create the right macro-economic climate to support rising productivity, I am not sure that I accept this 'special pleading'.

UK industry has seen a rise in the number of jobs over the last couple of years - but not a corresponding rise in output .... Productivity appears to have been falling. (It is difficult to be too precise since there is often a lag before employment and output 'catch up' with one another.)

If employment is rising but not output, it suggests that those new jobs are not being used productively - either because the people being employed do not have the right skills to perform productively ... or because the systems and processes in which those people are operating are not designed and operated to be optimally productive.

Even if it is a skills problem, it may be a basic skills problem - requiring fundamental change in the underlying nationals skills infrastructure - or it might be a more temporary problem of 'right skills in wrong places'.

Before asking for 'more money the CBI needs to find the 'root cause' of the skills problem ... and urge the government to address this as part of a longer-term strategy.  A 'quick fix' in an annual budget is either not needed or is not enough.

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