Title: Imperial College London
1Skills and InnovationResearch Reflections and
an Initiative
Professor Bruce Tether 17th November 2008
2Overview
- Part 1 Review of research on the Relationship
between Skills and Innovation - Part 2 Design London A Multidisciplinary
Initiative
3Part 1 Literature Review - Questions Addressed
- How does Innovation Impact on the Demand for
Skills? - How does the Supply of Skills Impact on
Innovation? - What is the nature of the two-way
relationshipbetween Skills Innovation? - What are the Policy Considerations?
- What are the Research Gaps?
4Context UK Government - Five Drivers of
Productivity
Innovation
Productivity(i.e., Value of Output per hour
Worked)
Skills
Enterprise
Competition
Investment
5Innovation the Demand for Skills
- Different types of Innovation have Different
Implications for Skills - Process Innovation (through Technical Change)
Generally reduces jobs and skill requirements as
tasks become automated and simpler ( more
amenable to relocation). - Technical Change also interacts with Tradewith
lower skilled jobs move to the Developing
Worlde.g., Dyson Appliances Production to
Malaysia, RD etc still in UK
6Innovation the Demand for Skills
- Optimisation of new technologies (such as new
information technologies) typically requires
Organisational Change - e.g., impact of computing played out through
technological and organisational change
(resolution of the Solow Paradox) - Skill Biased Technical and Organisational
Change - in advanced open economies interactions between
technical change, trade, organisational change
and demand for skills has favoured those with
higher and more adaptable skills, and disfavoured
those with low, narrow and rigid skills
7Innovation the Demand for Skills
- Product Innovation typically creates jobs and
requires higher skills, but the nature of these
skills relates to type of industry, e.g. - Science Based Industries (e.g., Pharmaceuticals
Biotech).Key skills are upstream elite
Research Scientists in RD. - Engineering Product Based Industries (e.g.,
Machinery) Key skills are Design and Engineering
Problem Solving Skillsincluding strong Technical
Skills amongst the Workforce - Mass Market Industries (e.g., Food
Drink).Combination of Scientific Management
and Marketing is key. - Consumer Services (e.g., Hotel and Leisure
Services).Key skills are relational - Service
Management, Soft Skills Emotional Labour
8Innovation the Demand for Skills
- Growth of Services including Service Innovation
Strategies in manufacturing is associated with
Job Polarisationi.e., jobs requiring high and
low level skills McJobs and MacJobs - Innovation in Services is typically less
dependent on RD elite skills in science and
engineering More dependent on general
workforce, organisational change supply chain
co-operations. - Greater demand Relational Skills, incl.
Emotional Laboure.g., Care Organisation
Physical Labour Emotional LabourSoft Skills
communications, customer handling, team-working,
problem solving, etc. (Qualifications in these
are more difficult)
9Supply of Skills Innovation
- Empirical Evidence shows Lack of Skilled Labour
is an Important (but not the only) Barrier to
Innovation - Including Different Types of Skills workforce
skills, marketing sales skills, managerial
skills - And Different Levels of Skill basic skills,
technical and commercial skills, university
graduates - But also a Lack of Motivation to engage with
innovation - Overall, at firm-level, innovation performance is
strongly associated with higher level
skills(including both ST and non-ST graduates)
10Supply of Skills Innovation
- Supply of Different Types of Skills favours
Different Types or Modes of Innovation ... for
example ... - 1. Innovation based on Small Elitese.g.,
Science Push model of innovation based on small
scientific technological elites (in RD,
etc.). Pharm. is the classic example. Also,
specialist manufacturing (e.g., Formula 1) and
KIBS (e.g., consulting). UK has tended to do
well in these industries. - 2. Innovation through Scientific
Managemente.g., US style mass production
functional division of labour. more recent
Japanese approaches to managing innovationBased
on engineers with broad not highly specific
knowledge basesExperience gained in production
enhances continuous improvement interlinks
between management and workforce. UK poor at
this.
11Supply of Skills Innovation
- 3. Workforce Skills and Distributed (or Open)
InnovationJapanese / German approaches encourage
workforce participationSpecific skills built on
strong education / vocational training
systemse.g., superior ability of German textile
workers with written instructions enables greater
variety, small batch production, high value
added. c.f. UK workers demonstrations ? high
volumes ? compete on price. - Impacts of Weak Managerial Workforce Skills
... - 1. Firms tend to invest late in
technologiesLeads to competition on cost, not
quality. - 2. Make unattractive partners for Open
Innovation - 3. Firms can get trapped in a low skill
equilibrium / a.k.a. the low product
specification trap ...
12Interaction Innovation Skills
Low Skill Equilibrium / Low Product Specification
Trap
Low Production Skills
Firms Supply of Low Specification Products (for
Domestic Consumption)
Weak Management Skills
Firms Invest in Established (i.e., Mature)
Technologies
Competition on Price Costs
Demand for Low Specification Products
Firms have Little Demand for Higher Skills
Low Supply of Higher Skills
13Systemic Interactions Innovation Skills
Supply of Science Technology( skilled ST
personnel)
Workforce Skills
Management Skills
INNOVATIONPERFORMANCE
Quality of CompetitionDomestic and International
Quality of DemandIntermediate Final
14Policy Considerations
- Need to Improve Workforce Skills, from the
Bottom UpWorkers need to engage with and be
adaptable to innovationAlso crucial is the
ability to retrain in event of redundancy(UK has
a high rate of inactivity amongst unskilled
working age men) - Education Training for Generic, Adaptable
SkillsBeware the Qualifications Trap of
excessive early specialisationUnderstanding
theory raises the ability to learn and
adaptVocational training should incorporate
theory (not be wholly practical) - Combination of on-the-job and off-the-job /
college base training.Training should not be
controlled by Employers (short-termist) - Also Need to Improve Management SkillsManagement
plays crucial role in co-ordinating
innovationImportant role in raising the quality
of intermediate demand
15Policy Considerations
- Innovation is increasingly Open or
DistributedWithin Firms growing importance of
cross functional teams Between Firms less
likely that firms can innovate alone, more
likely that they need to collaborate for
innovation - Do managers know with whom and how to
collaborate for innovation? - Increasing importance of social or relational
capital alongside hard scientific forms of
knowledge - Consider the Orientation of the Science
BaseUnder-utilisation of SB reflects weakness in
industry (Lambert review)UK and European
economies increasingly dominated by services
but arguably low relevance of much hard science
to serviceIBMs Services Science initiative is
a call to arms
16Part 2 Design London An Educational Innovation
Was established following the Cox Review We
focus on Recombinant Innovation Our Mission is
... to broaden the understanding and skills of
tomorrows business leaders, creative
specialists, engineers and technologists The
challenge is get business people, engineers,
technologists and designers to understand one
another Cox Review Creativity in Business
17Part 3 Design London A Triangle for Innovation
The Royal College of Art (RCA)
Desirability
Commercial Viability
Technical Feasibility
Imperial CollegeFaculty of Engineering
Imperial CollegeBusiness School
18Part 3 Design London Four Pillars
Research the role of design methods, tools and
practices on business value creation
Deliver interdisciplinary teaching to
post-graduate students and industry
Incubate new ventures and talent to demonstrate
the power of the new model
Pioneer technologies to enable high
performance innovation
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