The UK desire to move towards higher value-added products and services underpinned by a commitment to higher skills and workforce development, however, needs to be placed in a context of the strategies in which other global players, both companies and countries, are engaged. Phil Brown, Hugh Lauder, and David Ashton have been researching in this area and through their TLRP associate project on 'Globalisation and the Skill Strategies of Multinational Companies: A Comparative Analysis' examines the future of skills in the new global competition, including China and India. It is based on extensive interviews with leading companies from North America, Europe and Asia, along with senior policy-makers across seven countries. It challenges current policy assumptions about the role of education and skills in the global knowledge economy and their findings are very thought-provoking.....

Phil Brown, Hugh Lauder, and David Ashton argue that, in common with other developed economies, Britain has advocated the creation of a high-skilled, high-waged economy by upgrading the education and skills of its workforce. Such policy prescriptions rest on the idea of a knowledge economy where innovative ideas and technical expertise hold the key to the new global competitive challenge, with Britain well placed to become a 'magnet' economy, supplying the global economy with high skilled, high waged workers. But the recent success of China and India in moving into the production of high value-added, high-technology products has caused political leaders and their advisors to re-evaluate the global economic challenge. The OECD recently acknowledged that emerging economies including China and India were moving up the value chain to compete with Western companies for high-tech products and R&D investment, so Western economies need to focus on their ability to introduce change, innovation and productivity growth. The challenge is to outsmart other national economies - whether established or emerging - in the 'knowledge wars' of the future.

Their findings challenge the policy mantra of a high-skills, high-wage economy. While the skills of the workforce remain important, they are not a source of decisive competitive advantage. Many countries, including China and India, are adopting the same tactics as the UK. It is how the capabilities of the workforce are combined in innovative and productive ways that holds the key. High-skilled workers in high-cost countries will have to contend with the price advantage of university graduates in developing economies. The main threat to high rewards for large numbers of highly skilled workers in the West, however, will not come principally because they are being outsmarted by graduates in China and India, but because companies are discovering new ways of doing the same things in more cost-effective ways: through the spread of 'Digital Taylorism' to knowledge work. One consequence could be that in the early decades of the twenty-first century the rise of the high-skill, low-wage workforce may become a feature of the developed as well as the developing economies. The rewards associated with graduate careers could become very unevenly distributed.

Digital Taylorism does not eliminate the importance of employee motivation nor the need for good 'soft' skills such as self-management and in customer-facing activities. The standardisation required to achieve mass customisation still needs customers to feel that they are receiving a personalised service. This demand may contribute to a continuing demand for university graduates. But their occupational roles will be far removed from the archetypal graduate jobs of the past and we need to consider the prospect of a high-skilled, low-waged economy for the UK. The one-dimensional view of education as a preparation for employment is not a reflection of labour market realities, but an attempt to maintain the idea that justice, efficiency and the good life can be achieved through the job market driven by economic growth. There has never been a time when alternative visions of education, economy and society have been more important.

For a four page research briefing on this topic, see 'Are we witnessing the rise of a high skilled, low waged workforce?'

In the 24 page TLRP Commentary on 'Education, globalisation and the knowledge economy' Phil Brown, Hugh Lauder and David Ashton consider the implications of the global skills race; the globalisation of high skills; competition based on quality and cost; global skill webs; where to think?; knowledge work and the rise of digital taylorism; creating a war for talent; the importance of 'skill' in corporate investment decisions; qualifications, skills and competence; and wider policy implications.

Another perspective on the development of India and China: a Warwick Podcast

China and India - The economic giants of the future

Mon 05 Jan 2009

China and India are the two burgeoning economic giants of the globalising economy. Dr Simon Collinson of Warwick Business School discusses their comparative positions and looks to the future for these to would-be superpowers. Length: 18 minutes

Download (size 16.4 MB )

Perspective on indian development of India: link to BBC programme

Focus on maths, mental calculations and problem-solving in school; value of work process knowledge in relation to back office functions which were outsourced to India in the past has led to many Indians taking high level positions in global companies. Understand how to make processes more innovative (had global best practices from global companies) - very knowledgeable. For example introduction and implementation of London congestion charging. IIT training - not just technical. 30,000 IIT graduates in the US (out of 175,000 graduates). Indian (and Chinese) Americans - IT innovation and entreprennuership - Virginia 20% of all patents in the ICT area. Mindset of adaptabiltiy - listening to different cultures - can now move across geographies. Kraft Indian CEO - now 40% of value outside US - now a global company. Value of Asian managers in expanding in Asia. Ideas back into India - circulation of Indian human capital.

http://www.bbc.co.uk/iplayer/episode/b00r0rkn/The_New_Global_Indians_Uniquely_Indian/

TLRP Research briefing: 'Are we witnessing the rise of a high skilled, low waged workforce?'

TLRP Commentary: 'Education, globalisation and the knowledge economy'