A Conceptual Model of National Skills Formation for Knowledge-Based Economic Development

Friday, July 20, 2012
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The African Regional Action Plan on the Knowledge Economy (ARAPKE) was developed in association with the Second African Regional Preparatory Conference for the World Summit on the Information Society held in Accra, Ghana in February 2005. The political will for knowledge–based economic development has been reinforced consistently since 2005 by subsequent communiqués and regional meetings that have convened key stakeholders (Union 2006; Union 2010). The ARAPKE presents a continent wide, coordinated strategy to transition towards knowledge-based economic development. ARAPKE highlights the need for economic integration into the global economy which is increasingly dominated by knowledge-based industries. The African vision of knowledge-based economic development calls for collective effort to achieve the following objectives:

· To use information to accelerate development, induce good governance, and foster stability;

· To provide wellbeing and increase employment, reduce poverty, and empower underprivileged groups;

· To enhance the natural capital and human capacity of the region and minimize internal inequalities;

· To further benefit from information by fully becoming part of the global information society (Union 2005).

Similar to other regions of the world, the African vision for knowledge-based economic development is at the nexus of economic, political, and social objectives related to national competitiveness and economic policies that support innovation, technology development, entrepreneurship, workforce skills development, adoption of high performance organizational structures, and ICT infrastructure development (Planning 2010). Rischard (2009) observes several common development objectives, job creation, economic integration, economic diversification, environmental sustainability, and social development, which have underpinned successful transitions to knowledge-based economies elsewhere that are also reflected in the ARAPKE. As is articulated in the African vision, a vital precursor to knowledge-based development is human capital development that is conducive towards developing a society characterized by skilled, flexible, and innovative individuals nurtured through quality education, employment, and broadly accessible life-long learning opportunities (Planning 2010). In the 1960s, Becker (1994) underscored the critical link between human capital and economic growth when he observed “Since human capital is embodied knowledge and skills, and economic development depends on advances in technological and scientific knowledge, development presumably depends on the accumulation of human capital.” More recently, Kuruvilla and Ranganathan (2008) show that, given sufficient skills levels, a development strategy based on the export of low-cost and high-end knowledge-based services is a viable alternative to the more traditional low-cost export-oriented manufacturing strategies for developing countries. Thus, the movement of many developing countries towards knowledge-based economic development inevitably requires the transition to more effective skills formation systems.

Lack of effectiveness of skills formation systems to produce high-level skills serves as a constraint to knowledge-based economic development. Adaptability and congruence of skills formation systems and constituent actors in response to factors such as economic development, skill demands of employers, technological progress and industrial strengthening, and macroeconomic trends is critical to knowledge-based development (Schwalje 2011). However, many countries in Africa are caught in a ‘low-skills equilibrium’ which is characterized by “a self-reinforcing network of societal and state institutions which interact to stifle the demand for improvements in skill levels (Finegold and Soskice 1988).” The African countries that have escaped the low skills equilibrium and formed higher skills based economies now face a poor match between human capital and the skills demanded by employers with many firms expressing concern that they face internal employee skills deficiencies that limit performance, a phenomenon that has been popularly labeled as a ‘skills gap.’

Given the shared vision of a knowledge-led future in Africa as well as the human capital development challenges such a structural transformation entails, this analysis will proceed by advancing a institutionalist approach to skills formation which might serve as a conceptual model to inform regional skills development systems. This paper will advance a conceptual framework for national skills formation which exhibits the flexibility and responsiveness to meet the needs of 21st century labor markets. The remaining sections of the paper represent a modest attempt to apply this framework to the case of Africa. The literature on skills formation draws from several disciplines. Unfortunately, the literature currently exists in a fragmented and non-integrated form that fails to cut across disciplinary boundaries. There is currently no accepted general framework to analyze national skills development systems which has resulted in countries adopting a reactive approach to skills development problems (Kuruvilla, Erickson et al. 2001).

The conceptual framework advanced is an attempt to review and synthesize the literature on skills formation. This paper proposes an integrated, systemic view of national skills formation systems guided by government intervention in light of rampant failures of neo-liberal skills formation approaches that rely upon market mechanisms. Under neo-liberal approaches to skills formation, formal education and training systems, industrial development policy, firm-level skills training and workforce development initiatives, and the incentives behind individual investment in skilling have lacked coordination and proceeded as distinct fields of inquiry. It is important to consider the relevant institutions and interests of key stakeholders as highly interrelated in the context of knowledge-based economic development and achievement of economic, political, and social objectives in Africa.

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