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Workforce Skills and Innovation

OECD. Workforce Skills and Innovation: An Overview of Major Themes in the Literature. OECD Publishing, Paris, 2011.
The OECD Directorate for Education recently published this working paper which critically reviews the main approaches, debates and evidence on the role of workforce skills in the innovation process. Some of the key findings of the paper include:

  • Innovation in firms is predominantly incremental. While human resources in science and technology are a crucial stimulus to innovation in manufacturing, the broader workforce plays an increasingly central role in developing and diffusing technical and organisational innovations in service industries.
  • The rate of innovation diffusion across economies depends on the “absorptive capacity” of the broader workforce. Sound quality of education at all levels and institutional structures which provide incentives for training are thus essential.
  • Labour market developments towards more non-standard forms of employment, such as casualisation and self-employment, can have adverse effects on workforce capacity for innovation due to under-investment in workplace training by employers. 

Apart from the literature review, the paper draws on official surveys of innovation in business to demonstrate the great diversity in innovation activities and skills across industries. A concluding summary and assessment of the conflicting perspectives and their implications for public policy are also provided.