Chapter 5: Skills and Competitiveness in Developing Countries
5.1 INTRODUCTION Competitiveness depends on many things. One vital determinant – ultimately perhaps the most important single determinant – is the skills of the workforce at all levels. In a general sense, the importance of skills is so widely accepted that there is little need to argue the case. However, it is useful to clarify how skills and competitiveness are related in developing countries, and how the nature of skill needs is changing in the emerging world economy. Section 5.2 discusses the changing nature of skill needs and the role of skills and capabilities in the literature. It goes on to describe the evolving nature of global competition, highlighting divergences within the developing world. Section 5.3 describes skill creation patterns. The chapter closes with the main policy considerations in Section 5.4. 5.2 SKILLS AND COMPETITIVENESS The effective use of technologies (‘effective’, that is, for competing in world markets) requires skills, and the move from simple to complex technologies requires more, better and more diverse skills. New technologies often call for entirely different skills, both for direct production and services and for the organization of production and for managing knowledge networks. While the recognition that skills are important to comparative advantage is of long standing, there is a new burst of interest in its role in competitiveness. This is partly a belated acknowledgement of its traditional role. It is, however, also a recognition that skills themselves are growing in signiﬁcance as technologies become more complex and information-intensive. Let us start with the...
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