Global Production and Innovation Ecosystems and Changing Occupational Profiles: Challenges for Education and the Competitiveness of Nations

Takis Damaskopoulos

Abstract


Abstract

This paper explores the dynamic interdependencies across processes of technological innovation and production organization, education and skills formation, and economic performance. Its core argument is that economically and socially sustainable growth will depend on the evolution of the knowledge economy and the absorption and application of technological innovations, and a parallel transformation of the work force in order to supply the skills needed to implement and operate the new technology and business models.

 

Technological innovation can lead to disruptions in the organization of production systems with high degrees of polarization, inequality and exclusion. A technology-related wage premium for education can channel benefits to those at the upper end of the educational distribution, while technological obsolescence may depress wages and employment at the lower end (exacerbated by the effects of globalization and the outsourcing and offshoring of lower-end jobs). The preparation of he work forec for the 21st century has thus become a key priority across the industrialized high-income countries.

 

The paper is structured around three main sections. The first section explores changes in the production matrix of the global economy with reference to the evolving interdependencies of two vectors: the technological intensification of the production process (through the deepening of the penetration of ICT use and the process of automation), and globalization (through the decomposition and re-composition of production through a process of spatial re-localization and the formation of global value chains). These processes have several important consequences for the reorganization of production on a global scale. The paper explores the following: the increasing integration of products and services (‘bundling’); the formation of ‘value domains’ that might or might not coincide with spatial or geographical concentrations of economic activity; the increasing importance of global value chains; and production and innovation ecosystems. In this latter context, the paper focuses on the process of financialization and draws a distinction between ‘symbiotic’ and ‘parasitic’ ecosystems.

 

The second section explores associated changes in the social structures of production, skills and employment that present historic options for firms, states and educational institutions. More specifically, the paper explores: the role of the state in the organization of production and technological development; the policy quandaries regarding production, skills development and sustainability; the differentiated effects on, and degrees of vulnerability of, different occupations and skills replacement through commoditization and automation; at regional level this is encountered in efforts toward ‘smart specialization’; the re-composition of skills, These trends are reflected in changes in the structures of social classes with two fundamental characteristics: polarization and inequality and the growing ascendance of the ‘creative class’.

 

The third section explores the implications of the above changes for education and research systems. These manifest themselves along two key dimensions: the content of research education and their organization. In this section the paper concentrates on the following aspects: the current state of educational systems and their coordination with changes in technology and production systems; emerging educational requirements; leading practices, and lack thereof, of coordination between employers and skills providers, tendencies toward ‘education ecosystems’; and new scientific approaches and directions in the area of analysis of social systems: social physics and computational social sciences, and their potential implications for aligning dynamics of innovation, education and skills development, and occupational profiles.

 

The paper concludes by reflecting on the broader context of institutional change and coherence required for the transition to a sustainable Knowledge Economy geared to prosperity, equitability and social inclusion and the competitiveness of nations.


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