Institut Arbeit und Technik Bo03London 1.vjj Gerhard Bosch Institut Arbeit und Technik Kulturwissenschaftliches Institut Institut Arbeit und Technik Wissenschaftszentrum

Bo03London 1.vjjGerhard Bosch

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Kulturwissenschaftliches

Institut

Institut Arbeit und Technik

WissenschaftszentrumNordrhein-Westfalen

Wuppertal Institut fürKlima, Umwelt, Energie

Gerhard BoschThe Changing Nature of Work:Comparative Perspectives

THE FUTURE OF WORK:An International Symposium

ESRC Future of Work Programme

London, 23-24 June 2003

Prof. Dr. Gerhard Bosch

Institut Arbeit und Technik, Munscheidstr. 14, D - 45886 Gelsenkirchen

Tel: +49 209/1707147, Fax: +49 209/1707124, email: [email protected]


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The Changing Nature of Work: Comparative Perspectives

Structure of the Presentation

Changes in the labour market

Myth in the discussion on education and work

Removing barriers lifelong learning

Conclusions

1

2

3

4


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Source: Abramovitz, M., David, P. 1996: Employment and Growth in the Knowledge-based Economy. OECD

1929

1948

1973

1990

tangible

non-tangible

US Capital StocksBillions of Dollars

6075

3251

8120

5940

17490

17349

28525

32819

(structures and equipment, inventories, material resources)

(education and training, health and safety mobility, R&D)

Figure 1:

1. Changes in the labour market

1.1 1st Trend: Investments in intangibles are becoming more important than investments in tangibles

Old technologies require more investments in tangibles (railroadification).The new more knowledge-based technologies require more investment in intangibles.

The relation between the stock of investments in tangibles and intangibles changed from 2 to 1 in the 20's to 1 to 1 in the 90's. Fig. 1


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Employment rate of men and women (25 - 54 years) by educational attainment in the EU 15, 1997

Source: European Commission, Employment rates report Luxemburg 1998

79

86,3

91,2

48

68,3

81,1

LOW

MIDDLE

HIGH

Men

Women

Figure 2:

Low education means more and more exclusion from the labour market.

1.2 2nd Trend: Education is getting more and more the entry ticket into the labour market

The higher the skill level the higher the employment rate. Fig. 2



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Un- and semiskilled

Basic vocational qualification

Intermediate vocational training (Masters etc)

Higher tertiary education

Total

- 12,5%

- 4,8%

+ 3,5%

Change 1984 - 1997

+ 3,0%

- 4,3%

Actual weekly working hours in West Germany

Source: Socio-Economic panel, own calculations

Figure 3:

35,9

39,2

43,2

43,4

39,4

31,4

37,3

44,7

44,7

37,7

1984 1997

1.3 3rd Trend:

„Brain operating hours" are becoming more important than machine operating hours.

Skill shortages have been reduced by increase in working hours.

Low skilled work is less and less utilised.

Working hours differ increasingly by educational attainment

The higher the skill level the longer the working hours. Fig. 3



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1.4 Positive Returns to Human Capital Investments

Individual returns: increase of wages

(6,5% per additional year of schooling in EU) Macroeconomic returns:

(a) increase of aggregate productivity(5% on impact/ a further 5% in the long run

in EU)

(b) faster technological change Social cohesion: reduction of inequality and social

distance improves economic performance

Caution: Most data refer to quantity of formal schooling. Quality indicators of learning and informal learning also shows positive effects.

Source: EU 2003, Human capital in a global and knowledge based economy, Luxembourg



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ik Higher individual returns in countries with deregulated labour markets (returns on additional year of schooling in Scandinavia 4% and in UK 12%)

Neoclassical explanation: more effective pay scales which reflect productivity differences more closely in deregulated markets

Alternative explanations: underinvestment in training in deregulated economies, more polarised skill structures and skill shortages

Human-capital-paradox: in spite of high monetary incentives for investments due to high income inequality low investment of low skilled

Fig. 4

1.5 The Human-Capital-Paradox

high investment risk because of high dispersion of returns

long working hours of low skilled low incomes and saving rates tayloristic work organization lack of formal pathways for low skilled high social distance

Explanation of the paradox:



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Educational levels in West Germany and the USA, 1989

Source: Freeman, R.B., Schettkat, R. (1998): Low Wages Services: interpreting the US-German difference. Paper to the LOWER Conference Groningen. The Netherlands. Nov. 19-21

Figure 4:

45

30

17

8

16

69

7

8

High school

College, Associate Degree

Bachelor's degree

Master or higher

USA

Germany

Vocational training


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Conclusion:

2. Myths in the discussion on education and work

Most of the general skills (languages, mathematics)last a whole life, if they are used. This is also true for the social skills.

General skills have to be learned early.

Broad vocational skills in initial vocational training.

More further training to fresh up and extend specific vocational training.

2.1 1st Myth: The half-life of skills and knowledge is declining

Basic vocational training have a long half-life.

Specific vocational skills have a decreasing half-life.


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Conclusion:


Might be true if occupations are very specific and are mainly based on-the-job training

Develop broad occupations

2.2 2nd Myth: One should be prepared to change occupation several times in a work life.

Broad occupations make it possible to cope with structural change (further training is required)

Multiple occupation changes waste resource. This is as if somebody who has thrown 35 with the dices has to start again at 1


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Conclusion:


Some early adopters and computer kids may learn only by doing or on-the-job

2.3 3rd Myth: Technological development is progressing so fast that training based on fixed curricula and certificates are no longer viable.

If their are no general standards for curricula and certificates there will be de-facto standards of Microsoft, SAP, Cisco etc. Skills are not transferable

Because of fast changes learning has to be changed: Traditional classroom teaching has to be combined

with learning in real projects Curricula have to be opened for changes


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Conclusion:

Many companies, especially SME‘s, are planning on a short-term basis and do not know their needs in the future

2.4 4th Myth: Training must be increasingly oriented along the needs of the companies.

Asking them about their need is like „A blind person is asking another blind person about the way"

We need a pro-active supply side-approach of identifying future needs and translating these needs into curricula

Not all companies are innovators: their needs may be formed by old technologies and traditional forms of work organisation

Many future companies are not yet in existence


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Fig. 6

3. Removing barriers lifelong learning

3.1 Market failure : Internalise training-incentives in markets

Incentives could be:In the product market:A.

In the labour market:B.

Prevailing wage laws

Minimum training requirements for bidsLicensing (such as for doctors, pilots or electricians)

Employment protection which establishes long term relations between employer and employee create incentives for training(job tenure is increasing in most countries)

Avoiding free rider problem by introducing a levy (as in the Danish apprenticeship system)

Health and safety regulations

Quality standards for products and services(as in the German construction industry)

Safety or liability regulations

Innovation policy Fig. 5

Ex. Gas


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Business Enterprise Expenditure on R&D in selected OECD-countries (1981 - 1998)Gross domestic expenditure on R&D as a percentage of gross value added in the economy

Source: OECD: Main Science and Technology Indicators (1998/1). - National Calculations and Estimates

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 19980

1

2

3

4

SwedenFinlandSwitzerlandJapanUSAGermanyFranceUKCanadaNetherlandsItaly

** estimation

Figure 5:


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4,3%3,8%

2,8%2,1%

Repeal Statesbefore repeal

Statesretaining law

States thatnever had law

Repeal Statesafter repeal

Source: P. Philips: The US: A tale of two cities. In: G. Bosch / P. Philips: Building chaos (Eds.): an international comparison of deregulation in the construction industry. London: Routledge, 2003

* Apprentices as a percent of journeymen.

Apprenticeship Training Rates and Prevailing Wage Laws by State Legal Policy *

Figure 6:


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Conclusion:

Bad practice: The British gas industry

Post-privatisation, a severely fragmented industry total businesses 43.900

total employees 97.000

No rational employer would wish training.

Ageing work force more installers over 50 years than under 35 years.

state took over training1999 => 128 new entrants, 2002=> 2500 new entrants, 2004=> 4500 new entrants

1999 only 128 entrants into training. Fig. 7

Employer financed training was replaced by state financed training


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0

2000

4000

6000

8000

10000

12000

14000

16000

18000

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+

1999: 128 entrants!

Ageing workforce - more installers over 50 than under 35

Gas: the skills problemFigure 7:


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3.2 Underinvestment in Training in SME’s

In most countries SME‘s invest less in training than big companies.

REASONS:

Money is one but not the major obstacle Less need for training (high percentage of

technology appliers) Higher risks of investments due to higher

manpower turnover Low internal planning capacity No economies of scale in training Intransparency of training market Supply not tailor-made for SME’s High specialisation/ internal learning too narrow



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3.3 Creating incentives for training in SME’s

1 Networks

2 External help structure

3 Combination of (1) and (2)

Positive effects:

• Reduction of planning costs• Economies of scale• Tailor-made-supply• Enlargement of learning possibilities• Networks can develop other activities

(manpower pool, joint bidding etc.)

Problem: • Organisation of the network

Consultants for temporary support in developing or providing training

Both can be financed by contributions, levies or public money



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3.4 Best practice: Small firm development account in UK

Pilot Program in Leicestershire & Lincolnshire carried out by the ”Centre for Entreprises” launched in 2002

A mechanism to stimulate business led workforce development in small companies (5 – 50 employees)

Training advisor of the Centre and ”Training Champion” appointed by the firm develop ”Training and Development Plan”

Company receives £ 500 after signing the plan /Centre pays up £ 150 per employee for external training

RESULTS:

280 Training Champions attended workshops 230 approved training plan Average 20 employees per business Average 11 employees per plan



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Intransparency of training market

3.5 Pathways for individuals and companies

Major problem:

makes the fit between training and work organisation for companies difficult (high transaction costs)

Possible solutions Generally or broadly recognised certificates

Certification and quality assurance of providers

Conclusion: Both solutions have to be linked.



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IT System integrationSpecialist

29 Specialist profiles for 6 IT sections: Software Developer, Solutions Developer,

Administrator, Co-ordinator, Technician, Advisor

Certified IT SystemsManager

Certified IT Business

Manager

Certified IT Business

Consultant

Certified IT Marketing Manager

Bachelor of

Engineering

Master of

Engineering

Certified IT Technical Engineer

Certified IT Business Engineer

ITSystem Officer

IT System Support Officer

Source: http://kib-net.de, 2003

Strategic Professionals

Specialists

ITSystem

Electrician

Operational Professionals

Vocational Training

Training Pathways in the German IT-IndustryFigure 8:


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3.6 Learning forms: Shortcomings of traditional classroom vocational learning

For low skilled:too abstract/difficult to motivate if there is no concrete output

For middle and high skilled: lack of tacit knowledge

For companies:classroom teaching plus on-the job-training afterwards too expensive

For innovation in the economy: too slow



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Class Room-Orientation

Product-Orientation

Project-Orientation

Customer-Orientation

Increasing Work Orientation

Small Products

Complex Products

Orders

Basic learning forms in vocational trainingFigure 9:


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3.7 Work Organisation (1): Exclusion of the low skilled from learning

Tayloristic model of firms

New model of flexible firm

Complex organisation and simple jobs. complexity of the organisation is grounded in the radical split between

"thinking" and "doing" The organisational memory is based on formal procedures, strong

hierarchies and a professional elite at the top of the firm. The low skilled are excluded from formal and informal learning

Flexibility by the reintegration of tasks and teamwork reduction in organisational complexity: coordination and

communication at lower levels of the organisation This organisation is based on continuous learning



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3.8 Work Organisation (2): Crucial role of work organisation

Productivity increases only if knowledge is actually used

Motivation to learn often comes from work experience

Important for low skilled: Changes in work organization (job enrichment/enlargement, rotation) make it possible to learn step by step

PROBLEMS:

Research of the European Foundation shows that traditional forms of work organization still dominate in EU

Some countries are far ahead in introducing post-tayloristic forms of work organization (S, DK, FIN, NL)

Even in modernized companies the peripheral workers are often excluded from learning



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3531

23

34

Indefinite contracts

Fixed-term contracts

Temporary agency contracts

All employees

Figure 10: Employees who have received training over the past 12 months(by contract)

Source: European Foundation: Third European survey on working conditions 2000

3.9 Work Organisation (3): CONCLUSIONS

The state and the social partners should promote decentralized forms of work organization

Promotion of training for peripheral workers Good example: France increased the training levy for temporary

and agency workers from 1,5 to 2% of the gross wage bill



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3.10 Lack of Time and Money: SOLUTIONS

Entitlements for sabbaticals as in Sweden

Grants for further education as in Sweden

Saving accounts for life-long learning with subsidies of the state, own contributions and contributions of companies (Problems: embeddedness, taxation, property rights, bankruptcy, use: training vs. early retirement)



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3.11 Role of social partners (1)

Social partners can promote training by agreements on

standardized curricula and certificates (pathways) saving accounts for training on special programs to ”promote training for less skilled” work organization pay scales with incentives for learning

Advantage compared to programs run by the state or the employers:

better links between theory and practice compromise between short term business needs and promotion of employability easier implementation on industry level

PROBLEM: Unions are marginalised in some countries.



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The Collective Agreement on training in the engineering industry in Baden Württemberg 2001

Key elements (1):

The social partners agree that lifelong learning is the key for future competitiveness of the companies and the employability of the employees.

Each employee has the right to a regular talk with the employer on his/her individual training needs.

Employees in parental leave also have the right to such a talk.

If there are training needs, an individual training plan will be agreed upon.

In case there is no agreement the employers and the works council or in companies with more than 300 employees a commission (parity of seats) should try to reach an agreement.

If they do not reach an agreement a representative of the new "Agency to promote further training" will become a member of the commission with the right to vote.

The employer pays the training.

Role of social partners (2):



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The Collective Agreement on training in the engineering industry in Baden Württemberg 2001

Key elements (2):

Role of social partners (3):

After successful training the employees can claim to use the new skills.

The social partners build up an "Agency to promote further training". The agency should

consult companies,

develop training programmes for un- and semiskilled workers,

observe the structural change in the industry and propose training programmes.

Each employee with 5 years tenure is entitled to 3 years unpaid leave for training.

The IG Metall did not succeed in getting a paid training leave for older workers to adapt their skills to structural change.



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4. CONCLUSIONS

Barriers to lifelong learning are found not only in the education and training system but also in other sub-systems of the society (work-organization, labour and product markets, industrial relations, innovation policy).

Removing barriers to learning is a crosscutting task which requires cooperation of actors from different subsystems and cannot be left only to education and training specialists.

The major challenge is to develop consistent policies in these different fields.

Expansion of lifelong learning may increase inequality and segmentation of labour markets.

Documents

Institut Arbeit und Technik Bo03London 1.vjj Gerhard Bosch Institut Arbeit und Technik Kulturwissenschaftliches Institut Institut Arbeit und Technik Wissenschaftszentrum