Phillip Brown, Hugh Lauder and David Ashton Danish Presidency Conference, Copenhagen, April 2012 The Global Auction and the Future of Education, Training and the Labour Market in Europe

The Promise: The Rise of the Global Knowledge Economy Technological Evolution; The Age of Human Capital - Education, Jobs and Rewards; Rise of the ‘Knowledge’ Worker; Income Inequalities = Global Returns to Human Capital/Talent; National Comparative Economic Advantage: Developed Economies = Quality Head) Developing Economies = Price (Body)

Head and Body Nations ‘In the past, material forces were dominant in national growth, prestige, and power; now products of the mind take precedence. Nations can transfer most of their material production thousands of miles away, centring their attention on research and development and product design at home. The result is a new and productive partnership between “head” nations, which design products, and “body” nations, which manufacture them.’ R.Rosecrance, The Rise of the Virtual State, 1999.

The Opportunity Bargain: Learning = Earning ‘Free Trade’ and Market Competition; Compete on ‘Quality’ not ‘Cost’; High Skills Workforce; By 2010 EU ‘the most competitive and dynamic knowledge-based economy in the world, capable of sustaining economic growth with more and better jobs and greater social cohesion.’ (Lisbon, 2000) Innovation and R&D;

The Great Recession Great Recession or Great Transformation? Education and Employment Challenge is Structural + Cyclical; The Need for a Fundamental Re-Think of Human Capital Theory (Learning = Earning); New Approach Based on the ‘Global Auction for Jobs’; VET and Innovation for a Better Quality of Life and Shared Prosperity.

Research Background Argument Based on Over a Decade of Research (Ongoing); Examine Views of Transnational Companies; Examine Views of Senior Policy- Makers, including China & India.

Research Evidence Seven Countries - Britain, China, Germany, India, Singapore, South Korea, and the United States; Three Core Sectors - Automotive, Financial Services and Telecommunications; Interviews - Over 250 Company and Policy Interviews; Trends Analyses - including credentials, employment and income data.

Trend One: Globalisation of ‘High Skills’ Enrolments in Tertiary Education Doubled Within a Decade from 72 to 136 million ( ); China Overtakes US with Over 20 Million in HE (2006). Now 27 Million Enrolled in HE; China’s Talent Plan, Extra 95 million HE Students in Next 10 Years (2020); Over 60 Percent of Engineering Doctorates were Awarded to Foreign Students in Both American and Britain.

The Expansion of Tertiary Education in Selected Emerging and Developed Countries (enrolments) Source: Compiled by the authors from World Bank data.

Innovative Learning Crouching and Leaping Economies ‘ Today, China is the world’s factory, tomorrow the world’s competitor.’ Senior Civil Servant, Beijing ‘The multinational companies are our schools.’ Leading Chinese Economist ‘Each one of us must set our sights higher and aim to be the best in what we do. Our schools and colleges must aim to be the best in the world. So too our businesses and laboratories.’ India’s PM Mr.Manmohan Singh, 2007.

Trend Two: Quality-Cost Revolution ‘We have an “inside out” model which is very clever. It gives us more flexibility over what to do where’ Senior Indian Manager, EU Electronics, Mumbai ‘What is really different here is research, we generate ideas for the frontline to use…These are the areas that we find that talent is delivering to an even higher standard than expected. We’re not doing those menial call centre type jobs. It’s global work and that’s where we think we’ve been able to add a lot more value than what was initially expected and that will continue.’ Senior Indian manager, US Bank, Mumbai

Inside-Out in New Delhi

Inside-Out in Mumbai

3/ Rise of Digital Taylorism ‘Industrial Revolutions are Revolutions in Standardization’ (J.Tate); From Mechanical To Digital Taylorism; Knowledge Work  Working Knowledge; Simplify  Codify  Standardise  Digitalise  Software Distribution; Modular Corporation?

Digital Taylorism (Cont’d) ‘The presences of Digital Taylorism can’t be overstated because it is happening everywhere. All your call centre jobs or your business processing that happens, it’s typically Taylorism in a more digitalized world, because there are only five or six things you have to answer and they’re on your system and you don’t customize anything…this is true of all kinds of jobs today in India…much of the work is very much like an assembly line.’ Indian HR Manager, US Transnational (Jan, 2012)

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Digital Taylorism Continued The Future of Knowledge Work? Developers (creating) Demonstrators (executing) Drones (digital routine)

4/ War for Talent Stratification of Knowledge Workers; From Expertise (Skills) to Performance; ‘It’s more important to get great talent, since the differential value created by the most talented knowledge workers is enormous.’ McKinsey Consultants. From ‘West’ to the ‘Best’  Globalisation of the ‘War for Talent’? Global University Rankings – ‘Being Good is No Longer Good Enough’!

A Global Auction Competitive Advantage Through People  ‘People Have Become the Value Chain of the Future.’; Global Auction = Dual Auction: Forward/Progressive (High Skills, High Wages) Reverse/Dutch (High Skills, Low Wages) Internationalisation/De-nationalisation of Corporate HR Strategies  Re-Think Role of National VET; Impact of Global Auction Depends on National Context  European Context.

Implications for Skills and Innovation in the EU No Return to ‘Business as Usual’; High Skills  A Declining Advantage  Source of Innovation? ‘If Everyone Stands on Tiptoe, No One Gets a Better View’ (Hirsch); Mixed Economy – Not Just University Graduates; Have to Compete at Most Links in the Value Chain; Social Hunger v’s EU Crisis of Expectations; Youth Unemployment (EU 21%) & Underemployment; ‘Fair Day’s Pay for a Fair Day’s Work’ (Income Inequalities); VET is at the Heart of Rebuilding ‘Productive’ Economies (Beyond Human Capital); Re-Thinking VET = Re=Think Innovation = Re-Thinking Society.

Innovation Union Innovation Not Always ‘Skill Biased’; Competitive Challenge (Best) V’s Equity Challenge (Rest); Jobs Strategy  Globalisation of Innovation. National Innovation V’s Innovation Union Science Cities: GIANT - The Grenoble Innovation for Advanced New Technologies – 40,000 People. ‘World-beating science is essential to the Innovation Union. But the Innovation Union is above all an economic strategy and a strategy for jobs. It is the other side of the deficit reduction coin. The growth side of the coin.’ Maire GEOGHEGAN-QUINN Commissioner for Research, Innovation and Science Innovation. No EU (Other Than UK) University in Top 30 of World Rankings (THE-Reuters), 2011.

VET for an Innovation Union Innovation is a ‘Social’ Process Not Just a ‘Technical’ Issue (‘Flexicurity’ in Education & Labour Market); Corporate Employers: ‘Social’ Skills Bigger Issue Than Technical Skills; Credential ‘Rat Race’  Stifles Individual Inventiveness/Risk-Taking; Freedom for ‘Individual Curiosity’  Vocational Education Beyond ‘Trade Education’ (Dewey, 1916): ‘The only adequate training for occupations is training through occupations…’ But ‘The dominant vocation of all human beings at all times is living – intellectual and moral growth.’ How to Build Progression and ‘Parity of Esteem’.

VET for an Innovation Union Dynamic Capability: Individual  Societal: ‘Every expansive era in the history of mankind has coincided with the operation of factors which have tended to eliminate distance between peoples and classes previously hemmed off from one another.’ (Dewey, 1916); ‘Inside-Out’ Model (Issue of Inclusion/Diffusion); Connecting SMEs to Global Webs/Network  Smart Governance Beyond Market Forces; Key Role for Employers, e.g. Job Creation; Co-Creation; ‘Productive’ Education; How Should We Educate and Skill the Next Generation (Start by Re-Educating Ourselves!)?

Share of Global GDP Source: A.Maddison – Historical Statistics

Any Questions!