Human Capital is a Competitive Differentiator

July 23, 2008 at 5:34 pm Leave a comment

By Debbie Van Opstal

For advanced economies, the competition is heating up at both ends of the skills spectrum: low-wage, low-skill as well as higher-skilled scientists and engineers. But there are no predetermined victors—or losers—in the global skills race.

In its recent report, Thrive, the Council on Competitiveness identified four key areas of opportunity to create skills to enable American workers to compete against anyone, anywhere in the world.

Middle skills: One of the biggest untapped opportunities for the future will be for technology workers in jobs that require less qualification than a BA degree, pay relatively well and do not offshore easily. The importance of these workers to the economy is growing in lock-step with the sophistication and fragility of the technology infrastructure.

In manufacturing, for example, the loss of production jobs, often due to technology substitution, is offset by an increase in maintenance jobs that are increasingly high-tech enterprises themselves. And that may be one reason why the Dutch are launching a Maintenance Valley, in anticipation that world-class maintenance capabilities will be a magnet for investment.

Service skills: Many people think of service jobs as low-wage, dead-end jobs. But it is time for a reality check. The service economy is the engine of wealth creation and now accounts for the majority of jobs in most economies.

The high-value competition in the future will be for high-end (and tradable) services in which creativity, problem-solving, communications, computing and teamwork will become must-have skills. Yet there has been little attention or investment in service science—how to accelerate rates of innovation and productivity in the service sector—as well as a lack of interdisciplinary curriculum to create the skill sets workers need to succeed in the service economy.

Scientists and engineers: With the growth in science and engineering degrees worldwide, simply graduating more scientists and engineers cannot be the answer for advanced economies. What they will need are scientists and engineers who bring a higher value skill set to the table.

More than having simply a narrow knowledge of the discipline, this new class of Renaissance scientists and engineers will understand business value and will be as comfortable with an Excel spreadsheet as they are with a pocket protector.

Green skills: Sustainability promises to be the game changer in the decade ahead. Carbon considerations are already beginning to alter corporate investment decisions. Consider that Procter & Gamble is putting its first domestic greenfield manufacturing plant in the United States in more than three decades proximate to consumers.

Ironically, most of the attention has been on “green collar” jobs which are usually relabeled middle skills jobs. But, getting ahead of the curve on sustainability will demand even more profound changes in professional education – embedding principles of resource productivity and low-or-no carbon footprint into core curriculum. While some institutions are experimenting with new programs, these have yet to become widely available or common practice for MBA’s, architects, engineers, chemists, and other key professional groups.

The bottom line for advanced economies is this: When everyone is successfully copying the old model, it is time to invent a new one.

Featured in The Economist online debate series, Workforce Talent 2020.

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Entry filed under: Talent and Skills. Tags: , , , , , .

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