Is skills development the answer to economic and social upgradation in the Global South? Some reflections on evidence from India

Anita Hammer reflects on the skills debate, and identifies the obstacles to the development of competitive skills ecosystems in the context of the political economy of India.

Skills are considered the answer to economic development and reduction in inequality in industrialised as well as industrialising societies. Not surprisingly, skill development has attracted considerable attention from policy makers in India, e.g. the formation of the National Skill Development Council to coordinate skill development and various public-private partnership initiatives on skill formation. The policy changes in India, evident in the National Skill Development Policy 2009, are in line with strategies elsewhere: skill formation and upgrading has assumed a critical role with increased global competition, either as a means to retain competitive advantage by industrialised economies or to upgrade by emerging economies.

 

India has witnessed an impressive increase in GDP growth over the last two decades. At the same time, it is undergoing a demographic shift i.e. an increase in the share of working-age population in total population. With a working age labour force of 431 million (those aged between 15 and 59 years) in the total labour force of 470 million (NSSO 2009-10), the challenge is employment creation and skills upgrading of the existing as well as growing workforce. The National Skill Development Policy 2009 set a target of 500 million to be skilled by 2022, with the Twelfth Plan (2012-17) target of skilling at least 50 million people by 2016-17. Indeed the fear is that if the skills challenge is not met within the next decade, India may not be able to sustain growth and it may leave large numbers among the increasingly youthful labour force unemployed with all its attendant negative implications for equality and social cohesion (Mehrotra et al. 2013). The key question is: can India remain competitive through its existing patterns of skill formation?

 

The role of skills is particularly emphasised in new industrial regions that are developing in order to attract industry, especially multinational firms. Specifically inserted into global production networks, such regions are often associated with skill development and/or overflow. In policy literature, this has been examined through the concept of skill ecosystems (Finegold 1999) that rests on a certain balance of power between firms, the state, and skilling institutions. My research conducted in the manufacturing firms of one such region in North India during 2014-15 reveals there are considerable institutional barriers to the emergence of a skills ecosystem. Trade unions are excluded from skilling decisions and institutions, and labour is not an actor in a context where post-independence compromise meant that the state represents the interests of labour. For unions, their exclusion takes skills out of their bargaining portfolio further weakening their position.

 

One-sided supply side skilling strategies persist in firms that reinforce the institutional fragmentation within the Indian skilling system as well as the considerable unequal power relations in the labour market. On the one hand, the system of skilling institutions is fragmented between public and private institutions, between centrally certified providers and others that go considerably beyond this and are oriented at the German system. On the other, when it comes to the demand for labour, recruitment decisions always have to be considered against strategies of in-house production vs. outsourcing. Inevitably, long supply chains in the textile and automotive industry draw on the informal economy which, to a large extent, is based on informal skilling practices. Informal workers are /remain weak in the absence of a clear employment contracts, and with limited union coverage and social security.  Because of their weak labour market position, even skilled informal workers cannot bargain for much. These factors combine to entrench disincentives by firms to train or to involve labour in skilling decisions. Only 17% of firms provide training in India. The political economy encourages outsourcing, and thereby further undermines any requirement to engage in skilling.

 

In conclusion, while the government has put forward an integrated and holistic policy, underpinned by the insight of the skills ecosystems literature, the new policy faces severe challenges in a context of fragmented institutional skilling structure and unequal capital and labour relations both nationally and in the region. With over 93% of workers as informal, power relations are skewed in favour of employers. The imbalances between capital and labour do not provide any collective constraints or offer firms any incentives to develop work organisations that require skilling in a coordinated institutional environment. Firms draw their competitive advantage from recruiting from and outsourcing to the informal economy. This is unsustainable in a globalizing world where other destinations may provide the cost advantage to capital that India currently does. No matter how comprehensive a policy, it is unlikely to succeed unless unequal power relations in the labour market are addressed.

 

 anitaAnita Hammer is a member of CROWE and CERC at Leicester Business School, De Montfort University, UK. Her research focuses on the Global South and examines the development trajectories of new industrial regions, changing patterns of work and employment and the role of the informal economy http://www.dmu.ac.uk/work-and-development-in-the-global-south

 

Skills in the age of over-qualification

 

 


Caroline Lloyd and CROWE’s Jonathan Payne summarise their major international research project on skills in service work, recently published as a monograph by Oxford University Press

 

9780199672356

The service economy, in which most people earn their living, has been central to debates around the future of work. Some see the future for advanced economies in terms of a more ‘knowledge-based’ economy, in which more people can look forward to ‘good’ high skilled, high wage jobs, while others point to new forms of Taylorism, the persistence of low skill, low wage work and labour markets that are becoming increasingly polarized. There are, however, widespread concerns that many countries now face challenges in terms of ‘over-qualification’ and ‘skills wastage’. How then can we make better use of skills that workers already have? What can be done to develop ‘more and better jobs’? And what are implications for the way we think about the role and purpose of education? These are vital questions for anyone concerned with social and economic progress, which we seek to address in our new book, Skills in the Age of Over-qualification: Comparing Service Sector Work in Europe (Oxford University Press, 2016).

Our starting point is that an international comparative approach is vital. Too often national policy debates rein in possibilities by assuming that some jobs are simply the way they are and cannot be redesigned or made better. Comparing jobs across countries can help in terms of highlighting alternative possibilities as well as potential constraints. The specific question we ask in the book is whether particular jobs are different across countries or not, focusing primarily on work organisation and skills, while also taking into account broader aspects of job quality. In doing so, we wanted to build upon existing comparative studies of manufacturing jobs and low wage work to explore these questions in relation to service jobs. Specifically, what role do national institutions, sector dynamics and firms play in shaping how skills are formed and the way jobs are designed?

We focus on three occupations (vocational teacher, fitness instructor and café worker) in three countries (the UK, Norway and France). The jobs correspond roughly to professional, intermediate and entry-level positions, and the countries selected are widely viewed as ‘neo-liberal’, ‘coordinated’ and ‘state-regulated’ economies.  In total, 245 in-depth interviews were conducted across the three countries between 2009 and 2012. These took the form of interviews with key industry stakeholders, along with detailed workplace case studies involving interviews with those doing the job and their immediate supervisors and managers.

The evidence indicates that there are differences in the way that jobs can be designed and that choices are available to organisations in the way they organise work. For example, the inspections and intense managerial monitoring, faced by vocational teachers in England and Wales, are not a feature of vocational teachers’ work in France and Norway. For fitness instructors and café workers a more complex pattern emerges. French instructors are required to be more highly qualified by law, have more autonomy in the job, and yet also face high levels of work intensity. In Norway, the job is unregulated in terms of qualification requirements, while the UK uses a voluntary register of exercise professionals which guarantees minimum entry level qualifications.  Café work emerges as a relatively low skill job, requiring little training, in all three countries. And yet again there are differences, with those in Norway for example having more discretion when it comes to making products.

If you are worker in Norway in any of these jobs you are substantially better paid, even when factoring in differences in the cost of living.  Job security is also different. Vocational teachers in France and Norway are typically employed on secure, full-time contracts, while fitness instructors and café assistants are provided with guaranteed hours and more regular shift patterns. All three groups in the UK are more likely to be exposed to insecure work and involuntary part-time or variable hours’ contracts. There are of course limits to how far some jobs, like routine café work for example, can be redesigned or upskilled. Indeed, the persistence of relatively low skill work suggests that countries may need to think more carefully about the role of education in preparing people for personal development and life in general, irrespective of what jobs they end up doing in the labour market. Countries like France and Norway already provide vocational learners with a wider curriculum of general education compared with that on offer to their counterparts in the UK. Finally, even where jobs are difficult to redesign substantially, there is more scope to improve pay and conditions through higher minimum wages, more extensive collective bargaining and higher out-of-work benefits. Possibilities exist, but realising them requires challenging market-based orthodoxy and, more importantly, concerted action and societal pressure for change.

Caroline Lloyd is Professor at the School of Social Sciences, Cardiff University and an Associate Fellow at the centre on Skills, Knowledge and Organisational Performance. Her research focuses on the relationships between product markets, labour markets, work organisation and skills.

Jonathan Payne is Reader in Employment Studies at CROWE-DMU. His research interests and publications encompass the political economy of skill, vocational education and training policy, the changing meaning of ‘skill’, workplace innovation, and international comparative studies of work organisation and job quality.