Re-balancing the Economy and the Skills Agenda

(A viewpoint jointly written by R Evans and A Rego. It reinforces many of the issues raised in other Parts of this website. I am very grateful to Artur for joining me writing this article as he brings a great deal of expertise and experience in examinations and assessments with City and Guilds across a wide spread of subjects and programmes).

The current financial crisis could provide some opportunities to
fundamentally re-evaluate and reform the way the current economy is managed
and operates. It is obvious that the current model of capitalism is flawed
and has been largely responsible for creating the crisis. It is based on a
number of false assumptions/beliefs including a culture that is built on
accumulating debt and the questionable operation of a largely unregulated
free market. Complex and abstract algorithms and manipulations of
derivatives of the stock exchanges have created a world divorced from the
real world and models constructed by pure mathematicians. It is a zombie
economy and unfortunately many governments in the West are still wedded to
this culture having learnt nothing from the past. Many countries continue to
borrow /print more money assuming that more debt will solve the problems! A
sobering statistic is that the global debt has increased 30 trillion dollars
since the financial crisis began and now stands at a staggering 100 trillion
dollars. Debt and the creation of highly questionable bubbles e.g.
associated with property caused the problems and increasing further the debt
is certainly not the solution. Such tactics as quantitative easing is not
the remedy as it only builds up more serious problems in the future and is a
classic example of short term expediency!

Surely this on-going crisis that has created so many problems including high
unemployment especially amongst young people and requires once and for all a
radical overhaul of the way the economy is managed. There must be a sensible
and equitable balance between the wealth producing elements of the economy
and one that is not skewed to financial services as has happened in a number
of countries e.g. Britain. Such major reforms must include reforming the
structure of the manufacturing base of the country along with how the
educational and training systems can produce more highly qualified people
for the industries of the future. In addition there needs to be an urgent
and fundamental review of what skills will be needed in the future and how
we define them. What is not needed that unfortunately many countries have
done is to cut training and education budgets even though a country has to
introduce austerity measures.

So what reforms could be introduced to rebalance the economy?


To rebalance the economy the following actions have surely to be considered
and implemented:

Ø Develop a totally new paradigms of how the economy operates which is
balanced and independently regulated and audited

Ø Grow the economy and make this the top priority for wealth generation

Ø Invest long term in skills development and retraining the workforce

Ø Create a real economy based on sustainable skilled jobs and living wages
i.e. real jobs and real wages.

Ø Develop a balanced economy with a sensible balance between manufacturing
and service –based industries with a major emphasis on improving quality,
flexibility and productivity of the workforce.

Ø Emphasise national creation and growth that is based on carefully
considered, consistent and long term investment in industries that are
productive and responsive to world markets.

Ø Create more effective labour market intelligence systems and achieve a
more sensible balance between supply and demand

Ø Create more effective education and training systems with greater
commitment to work based training and apprenticeships.

* Improve the skills and quality of managers.

It has become apparent in the post crisis world that financial and monetary
treatment of current socio-economic ailments neither generates value, nor
provides a solution for long-term development. It is only by shifting
attention to education and skills development that governments will be able
to establish a new platform for economic value creation and ensure the
viability of social and economic reforms aimed at rescuing nations from the
post-crisis havoc wrought by financial bubbles. Failing to found economic
pulsation on education will just lead to another inflated bubble and a
concomitant illusion of artificial, unsustainable social welfare based on
consumption credit rather than production-based real economic value.

In order to avoid fatal social economic crashes in the future the education
system will need to take responsibility for educating the upcoming
generation on financial savvy and basic financial concepts. Without being
armed with such knowledge the holders of skills will fail to make informed
financial decisions to avoid financial traps that destroy value creation.

Reforming skills will form an essential element in rebalancing the economy in order to create a high quality, flexible and productive workforce. One critical factor is to clearly define and understand the concept of a particular skill and equally importantly the work context in which it will be applied as skills can be a slippery and constantly changing concept.  The dictionary definition of skills is fairly precise, namely “capability of accomplishing something with precision and certainty” and “practical knowledge in combination with ability”. This definition highlights the essential relationships between skill, practice and knowledge. Skills are about performing tasks, doing them well and doing them based on ‘practical knowledge’ Therefore skills have to be learnt and as a result bring about a combination of learning and skills as they are of equal importance. This conflation of learning and skills is to be welcomed as it places equal value on these two essential elements e.g. theory and practice, manual and cognitive skills. For too long there has been an artificial separation between subject and practice in the education/training world.  Clearly the location of the education and training systems must be central to the debates on rebalancing the economy in order to compete successfully on the global stage. Employers across Europe have identified the skills they want in employees and stress the importance of the following classifications:

  • Foundation, Intermediate and Advanced skills particularly manufacturing based occupations
  • Business, commercial, financial and service occupation skills
  • Technical and operative  occupation skills
  • Information Communication Technologies, scientific and mathematical skills
  • Skills for management and leadership in all sized companies

Currently these skills are grouped into three categories namely:

  • Basic/core/functional skills e.g. literacy, numeracy and capability in information communication technologies (ICT)
  • Generic/transferable skills – sometimes referred to as employability skills e.g. customer-handling, interpersonal skills, managing one’s own learning, problem solving, team working etc. (Employers particularly stress the importance of these skills).
  • Specific/specialist skills e.g. skills required in specific occupations.

The mobility of capital has resulted in the emergence of cross-cultural
work-places whose functionality is inconceivable without a common language.
As a natural evolution of history the role of such a lingua franca has come
to be filled by English, saliently altering the required trajectory of
skills development that also has to include English language, especially in
cultures where English is not a native tongue. The importance of English as
a Foreign language has come into the foreground in all daily work-place
interactions, encompassing job interviews, sending quotes and in describing
and understanding production processes. It has become inseparable from basic
employability skills. With the increase of immigration into the UK and the
need to integrate immigrants into local economic production, its importance
has never been more pertinent in the UK as well.

Of all awarding bodies, City & Guilds (CGLI) is one of the most dedicated to
integrating English language skills with other productive skills, by
offering a practical communicative English language qualification (called
International ESOL and Spoken ESOL) that has direct applications for the
work-based use of English language by skilled people, among others. This
ensures that all functional and specialist skills simultaneously become
cross-culturally transferable, enhancing their employability value.

In any debates about rebalancing the economy it is essential they must go hand in hand with fundamental reforms to the education and training systems. Past practices must be dispatched to the dustbin of history with historical signposts offering little assistance! New, creative and innovative approaches/ methods need to be adopted into the way learning and teaching is managed and operated. Education and training organisations and their staff must also be prepared to accept the new challenges and change many of their past practices. Some of the elements that need to be addressed and actioned are given below.

ü  Establish effective, sustainable and lasting links between education, training, industry and government

ü  To recognise that vocational/technical education and training is as important and on an equal footing as the so-called academic route.

ü  The introduction of well managed and widely available programmes of work experience, work based learning to all learners at schools, colleges and other training providers and at higher education level more sandwich courses

ü  Schools, colleges, training providers and universities must accept it is not just about formal academic instruction BUT ALSO about the importance of providing opportunities to all students to experience on-job training/work related learning (WRL) programmes. Expressed more precisely the urgent need to create a balance between theory and practice in the curriculum

ü  The essential requirement to have effective programmes of lifelong learning and programmes of continuous professional development (CPD) in companies and education and training providers.

ü  Identify and define what skills are required within each occupational area and develop long term strategies for skills development including for the higher levels i.e. 3+

Awarding bodies, notably City & Guilds (CGLI) and many others, have the function of
a spanning bridge between economy and education on the one hand, and economy
and society on the other. The standards they create to align the social
skills platform with the needs of production forces in the economy are
paramount for a successful transition to an education-based people-centred
economy. The role of awarding bodies has never been more important in that
respect: the learning and quality assurance based platform with which such
organisations support skills development are a reassurance to productive
economic forces that the pillars of future growth reside in their employee’s

However, awarding bodies are only endemic to the UK. In continental European
cultures the concept of an awarding body is relatively unknown in that
education standards are exclusively a government monopoly, with all its
systemic faults that on many occasions entail bureaucracy, inefficiency and
a failure to align the supply and demand of skills in local markets. From
this perspective the UK does have a vantage point to develop a unique skills
agenda that truly supports socio-economic developments for the benefits of

Written by:

Dr R Evans and Artur Rego (Business Development Manager, City and Guilds, European Office)



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