Workforce skills and export competitiveness (Chapter 10) - Acquiring Skills (original) (raw)
Summary
This chapter considers the implications of skills gaps for export performance by means of a detailed comparison of the UK with Germany. The results of analysis reported in the chapter confirm earlier findings that, relative to Germany, the UK's main deficiency is in craft and technician skills. But the extent of the skills gap varies considerably between sectors. Contrary to a common view, the quality of UK exports does not appear to be on average inferior to that of German ones, at least if quality is judged by price.
The chapter argues that the UK and Germany have comparative advantage in the same type of sophisticated manufactured goods. The UK's skill deficiencies tend therefore to show up as a lower volume of exports: the bigger the skills gap in any sector, the worse the UK's export performance relative to Germany's. UK and German exports to five major markets over the period 1978–87 are used to test this hypothesis.
Introduction
German exports of manufactured goods are two to four times the volume of UK ones, depending on the market. Can the UK's poor performance in manufactured trade by comparison with Germany's be explained by her well-known and well-documented skill deficiencies? It is the purpose of this chapter to cast light on this issue. I attempt first to see whether it is in fact the case that (as frequently claimed) UK exports are of comparatively low quality. Second, and irrespective of the answer to this first question, I compare skill levels at the sectoral level in both countries and investigate whether differences in skill levels explain differences in export performance.
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Type
Chapter
Information
Market Failures, their Symptoms and Policy Responses
, pp. 199 - 230
Publisher: Cambridge University Press
Print publication year: 1996
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