The key role of competence and knowledge in stimulating economic growth has been widely recognized by economists: a more highly educated society may lead to higher rates of invention, and may make firms more productive through the introduction of new and better production methods. In the knowledge-based economy, globalization, technological change and organizational development are increasing the demand for a higher level of skills. A general shift in labor demand from lower to higher levels of skill has led to increasing unemployment among those with lower skills. Thus, human capital is not only the most important production factor of modern times, but it also holds a central role in individuals’ social and economic success. This paper, using heterogeneous sources (the OECD database on education and functional literacy, and data obtained from ISTAT, the Italian National Institute of Statistics), describes the main features of the production system in Italy (size of firms, area of specialization, etc.) and the quality of the workforce from a multifaceted perspective (educational attainment; distribution of adults’ skills in four domains — prose literacy, document literacy, numeracy and problem solving — participation in formal or informal learning, etc.). An examination of the relationship between these variables suggests that there is a “vicious circle” in Italy where an inadequate supply of human capital fuels a model of development based on traditional manufacturing that in turn discourages investments in education. Nevertheless, this hypothesis should be integrated with additional hypotheses arising from typical themes and interests of sociological research.
Skills, work and production system: understanding Italy’s vicious circle
CORNALI, FEDERICA
2011-01-01
Abstract
The key role of competence and knowledge in stimulating economic growth has been widely recognized by economists: a more highly educated society may lead to higher rates of invention, and may make firms more productive through the introduction of new and better production methods. In the knowledge-based economy, globalization, technological change and organizational development are increasing the demand for a higher level of skills. A general shift in labor demand from lower to higher levels of skill has led to increasing unemployment among those with lower skills. Thus, human capital is not only the most important production factor of modern times, but it also holds a central role in individuals’ social and economic success. This paper, using heterogeneous sources (the OECD database on education and functional literacy, and data obtained from ISTAT, the Italian National Institute of Statistics), describes the main features of the production system in Italy (size of firms, area of specialization, etc.) and the quality of the workforce from a multifaceted perspective (educational attainment; distribution of adults’ skills in four domains — prose literacy, document literacy, numeracy and problem solving — participation in formal or informal learning, etc.). An examination of the relationship between these variables suggests that there is a “vicious circle” in Italy where an inadequate supply of human capital fuels a model of development based on traditional manufacturing that in turn discourages investments in education. Nevertheless, this hypothesis should be integrated with additional hypotheses arising from typical themes and interests of sociological research.
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