A Perspective on Skill Ecosystems
The changing nature of work requires VET practitioners to find new ways of meeting industry needs.
Industry leaders value the role of knowledge and skills in developing competitiveness and innovation.
Research indicates that proximity or clusters build knowledge and innovation through sharing ideas and exploring opportunities.
Networks of businesses and other organisations are forming clusters that can benefit from VET involvement.
VET practitioners are already involved in skill ecosystems or projects that are very similar.
The 2001 project Beyond Flexibility: Skills and Work in the Future (Buchanan et al) found that changes to the labour market, to the structure of businesses and industries, and significant and ongoing economic reform, had radically altered both the nature and the content of work. It went on to propose exploring skill ecosystems as a new and dynamic framework for responding to these changes and extending the role of VET providers.
What are skill ecosystems?
While it may first appear that skill ecosystems are the same as communities of practice or networks, they also differ in a number of ways. For example, networks and communities of practice bring together people with similar interests and backgrounds, such as a community of practice for professional development managers, or a network of elearning specialists. In contrast, skill ecosystems deliberately make connections across organisational and sectoral boundaries, for example targeting representatives from different sectors that may relate to an industry area – such as management, IR, and training provider representatives.
Skill ecosystems also differ in that they are outward looking and seek to improve the competitive advantage of the skill ecosystem partners. They explore the drivers, opportunities and barriers that need to be addressed to hasten the growth of the partners in an industry cluster.
Skill ecosystems:
- build collaboration and cross industry momentum;
- prepare individuals to build on divergent thinking to develop employee capacity, new products, services and businesses;
- look beyond traditional approaches to partnerships and learning to facilitate innovation and sustainability of industry and regions;
- foster innovative partnerships between the VET sector, industry and regions to effectively meet industry needs and demands;
- aim at boosting longer-term economic growth and productivity.
Why is this important and what does this mean?
When we look at the nature of the jobs available in the economy now and in the future, many people will continue to work in relatively low skilled jobs – such as hospitality workers, production workers, labourers, clerical and sales workers. Many argue that as the workforce becomes more highly qualified, skills wastage increases.
At the same time employers are investing less in staff training and development, meaning that potentially, the VET training market could continue to contract.
The changing nature of work means more people are broad banding, rather than using higher skills, and greater workloads mean people have less time to be trained or to provide training. Job-hopping due to casual and contract work also means employers are not training people. At the same time research suggests people want interesting and challenging work and good relations with their co-workers. This creates a challenge for us as VET practitioners. Fortunately the business world is becoming more interested in human capital and the role of industry clusters in improving competitiveness.
Developments in growth theory over the last decade have shifted attention toward the role of knowledge and human capital in the process of economic growth. Previous growth models didn’t try to explain what caused technology to improve over time. Implying that technology ‘just happened’ led to an emphasis on capital accumulation and labour force improvement as sources of growth. A key assumption of traditional economic models is decreasing or diminishing returns.1
Importantly, recent ideas-based growth models identify that economic growth results from increasing returns associated with new knowledge. Knowledge continues to grow in value and add value to the organisation. Investment in knowledge has a positive impact on technological development and this directly influences economic growth. ‘This approach holds that unlike physical objects, knowledge and technology are characterized by increasing returns, and these increasing returns drive the process of growth. The essential point is that knowledge drives growth. Because ideas can be infinitely shared and reused, we can accumulate them without limit. They are not subject to what economists call 'diminishing returns.' Instead, the increasing returns to knowledge propel economic growth. Hence, one of the central notions behind new growth theory is increasing returns associated with new knowledge or technology.'2
The good news for VET!
The good news for VET is that knowledge has gone from being a non-entity to a centrally important ingredient in economic growth. This is recognised not only by economists but also by business leaders and industry.
Internationally, industry leaders realise that not only is knowledge important but proximity facilitates the sharing of knowledge and the capacity for localised learning by firms, leading to innovation. The growing understanding of the role played by knowledge and proximity in building competition has led to interest in industry clusters which are in effect, skill ecosystems (without the emphasis on skills). Research on regional clusters indicates that innovation and competitiveness increase when organisations work together in clusters. Industry clusters of local businesses and educational providers increase efficiency, stimulate innovation, create new labour market approaches and facilitate new business models.
‘The enduring competitive advantages in a global economy lie increasingly in local things—knowledge, relationships, motivation—that distant rivals cannot match.’3
Interest in industry clusters is already apparent in a variety of different networks such as industry networks, industry associations, regional and rural networks to community and social capital networks. The skill ecosystem initiative has a great opportunity to build on existing networks already working with clusters and regional development. These networks understand the value of involving educational institutions in cluster development. Industry and regional development networks are providing opportunities for VET practitioners to become involved in skill ecosystems.
Skill ecosystems offer VET the opportunity to reposition itself in relation to working with industry and being more deeply involved in innovation.
Footnotes
1ALASIA, A 2003, The spatial
variation of skills and local innovation capacity in OECD countries:
key issues and preliminary data analysis, Progress research report, OECD
2ALASIA, A 2003, The spatial variation of skills and local innovation capacity in OECD countries: key issues and preliminary data analysis, Progress research report, OECD
3 PORTER, Professor Michael, Harvard Business School, as quoted by Mary Jo Waits, 2003, Advantages of the Industry Cluster Approach to Economic Development, Morrison Institute for Public Policy Arizona State University
See Also
National Skill Ecosystem Project, managed by NSW Department of Education
ALASIA,
A 2003, The
spatial variation of skills and local innovation capacity in OECD countries:
key issues and preliminary data analysis, Progress research report,
OECD.
Beyond
Flexibility: Skills and Work in the Future, BVET.
BILLET
S 2005, Forming,
Developing and Sustaining Social Partnerships, AVETRA.
The Competitiveness Institute
Cluster Mapping project, Harvard Business School
WAITS,
Mary Jo,
Advantages
of the Industry Cluster Approach to Economic Development, Arizona
State University.
RIBEIRO,
Maria-João 2000, A
Nonscale Growth Model with R&D and
Human Capital Accumulation, No 574 Warwick Economic Research Papers,
University of Warwick.