Economic development cannot happen without the
proper skill levels available in the market to ensure that investment
opportunities meet capabilities. A study by Osomu, et. al. (2010) delves into
the overall concept of creating greater global competitiveness. They analyzed
84 different countries over 5 years to determine how skill development through
formal education and corporate training raised economic viability and encourage
foreign direct investment in high technology environments.
Technological progress and globalization has created
rapid changes in the environment putting pressure to create productive and
innovative approaches that are supported through the comparative advantages of
skills, industrial organization and management practices (Lall, 1999). The process
of creating stronger businesses and management practices must meet available market
skills to create competitive advantages for the region and the market.
The types of skills vary based upon what industry
labor is employed. However, there are some commonalities in the global market
that appear to create competitive advantages. Skill development should include communication,
team work, rotation, quality, problem-solving, health and safety, and performance-pay
linkages (Low, 1998). Each industry will need to develop specific skill
qualifications that enhance their positions.
Prior success of the country is based on a number of
factors. Through a previous analysis of market factors it was found that human
capital investment in the early twentieth century helped the country gain
competitive edges in technology, education, and human capital while lowering
the damaging effects of inequality (Goldin and Katz, 2008). This period was
marked by economic and social dominance in world markets that carried through
to Baby Boomers.
This development is based within the cognitive,
analytical, and behavioral development that allows people to invent and adopt
new technologies and ways of improving production (Lall, 2000). The overall process
of learning, integrating best methods, and putting them to practical use
fosters greater and faster growth. The management and labor population must be
open to new ideas and developments to be effective.
Skill formation can be developed from a number of
different sources. It is most often raised in vocational training, formal
education, in-house training, outsourced training and on-the-job training
(Lall, 2000). Organizations seeking to raise their market value and contribute
to economic growth will need to support higher education as well as training
& development within their organizations.
The model used by the researchers to analyze skill
development within the country helps to understand how skill and economic
development work together.
The concepts included in the model are high
technology exports, Harbison Myers Index based on education enrollment, science
and engineering enrollment, gross domestic product per capital, and net foreign
investment. The researchers used these concepts based upon previous research to
create the mathematical model that helps to understand labor development and
economic growth.
The researchers found through this model that the
factors were statistically significant and accounted for 99% of variation in
competitiveness. Skills were important
for global competitive position. Improvement in high technology exports
requires the development of skill and investment in education. Low foreign
investment was associated with low skill development while higher foreign
investment was associated with high technology skill and product development. High GDP per capita and purchasing parity was
associated with the manufacturing and export of high technology products. The authors recommend reforming education across
all levels to encourage market relevance.
Comment:
The study is significant in that it highlights the need to develop local skills
through varying methods such as on-the-job training, training &
development, and higher education to provide the right human capital for
further investment within the market. Those markets that focused on matching
their skills to high technology exports also realized greater foreign
investment that fostered future growth. New development into the post Baby
Boomer generation is needed to further the American legacy.
Goldin, C., & Katz, L. F.
(2008). The race between education and technology. Cambridge: Harvard University
Press.
Lall, S. (1999). Competing
with labour: Skills and competitiveness in developing countries. Geneva: International
Labour Organization.
Lall, S. (2000, June). Skills,
competitiveness and policy in developing countries. Queen Elizabeth House
Working Paper Series 46. Oxford: Oxford University Department of International Development.
Low, L. (1998). Jobs,
technology and skill requirements in a globalized economy: Country study on Singapore.
Geneva: International Labour Organization.
Onsomu, et. al. (2010). The impact
of skills development on competitiveness: empirical evidence from a
cross-country analysis. Education and
Policy Analysis, 18 (71).
