Stimulating productivity by better using skills

Supporting the growth of indigenous sectors is a key pillar within the 2012 and 2013 Action Plan for Jobs. At the same time, attracting inward investment and ensuring multinationals have access to the skilled workforce they require have long been successful elements of Ireland’s economy. Support for the skills needs of domestic employers in sectors such as retail, health care, education, and energy is often less robust. Even companies in these sectors which are on high growth trajectories often face challenges in accessing relevant and responsive training. This is particularly the case for small- to medium-sized employers who provide over half of all private sector jobs in Ireland.

Going forward, the preparation of the Action Plans for Jobs could consider the role of the public sector in working directly with domestic employers to support the better utilisation of skills. In other OECD countries, skills utilisation policies have led to increased productivity and profitability for employers. In the past, a number of agencies in Ireland – such as the National Centre for Partnership and Performance and the Irish Productivity Centre – had specific mandates to look at these issues.

The public sector can also be more pro-active in approaching small employers and advising them on how to train staff and manage human resources arrangements. This can include promoting knowledge sharing networks and encouraging public bodies to participate in training for both managers and workers, as better trained managers are likely to create more productive working environments for their staff.

In parallel, companies need to be encouraged to make training and other skills development opportunities available to their employees. Advising on how to develop a quality-driven supply chain can also be useful to help local firms think longer term and therefore invest in increased productivity and incremental innovation. Public procurement could be a useful policy lever in this regard as government contracts can require a certain level of working conditions, and a certain level of commitment to training.

There are a number of opportunities within Ireland’s new training and labour activation structures to improve policy co-ordination and integration. Firstly, the establishment of Intreo and SOLAS should improve how employment services and vocational education providers collaborate and communicate with each other. The merging of FÁS Training and Vocational Education Committees into 16 Education and Training Boards (the completion of which was envisaged in APJ 2013) can also be expected to improve collaboration within the vocational education and training system. It will also align it more closely with public employment services through closer working between the Education and Training Boards and local Intreo offices.

At the national level, the legislation establishing SOLAS, as foreseen in APJ 2013, requires it to develop a strong relationship with Intreo. Secondly, there is considerable potential through the local government reforms already underway to strengthen voices that speak with authority for the needs of regional and local economies. The newly drawn up ‘super regions’ could provide a greater impetus for stronger regional thinking on skills and serve as more effective co-ordination units for preparing local skills strategies for high, medium, and low skilled workers. It is critical that they are appropriately resourced, have the necessary capacities, and are given the authority required in order to prevent them from becoming a limited governance structure.

	Box 1. Better skills utilisation in action – Canada and Italy
	Skills utilisation approaches in Niagara, Ontario, Canada
	Local educational institutions in the Niagara region of Canada are actively engaged in
	stimulating productivity and increasing the utilisation of skills by employers. For example, the
	local community college, Niagara College, has a tradition of working with local firms on R&D and
	innovation projects and has recently received funding from the Federal Economic Development
	Agency for Southern Ontario (FedDev Ontario) to increase its capacity to support the innovation
	goals of regional SMEs.
	The research arm of the college (Niagara Research) collaborates with firms in areas that
	include product and process applied research; engineering design; technology development;
	product testing; proof of concept; piloting; and problem solving. The most recent federally
	funded year-long programme includes partnering with 165 SMEs to develop basic business tools
	within the following sectors: information and communication technology; advanced
	manufacturing; greenhouse/viticulture/horticulture; renewable energy; and environmental
	technologies. The local Brock University has also developed a newly-built Cairns Family Health
	and Bioscience Research Centre which includes, alongside scientific and technical research, a
	business incubator to encourage spin-offs and ensure that products can be taken to market.

	Improving skills supply and utilisation in Rivera Del Brenta, Italy
	In the Rivera del Brenta industrial district in northern Italy, a cluster of firms in the footwear
	sector have collaborated to pool investment in training provision while also collectively
	upgrading product market strategies in order to engage in high quality international markets.
	The region traditionally hosted cottage-based shoe making industries which mainly employed
	low-skilled blue collar workers. However the area has now become a global centre for the
	production of high quality ladies footwear (supplying to Giorgio Armani, Louis Vuitton, Chanel,
	Prada and Christian Dior), through the development of an international brand by the local
	employers association, ACRIB.
	The privately-run local polytechnic, Politecnico Calzaturiero, has played an important role in
	the economic development of the district, employing firm managers to train local workers and
	job seekers after hours, while also offering management training and investing in research,
	innovation and technology transfer. The polytechnic therefore invests in skills supply while also
	optimising skills utilisation through new product development and improved human resource
	management. The fact that firms are members of ACRIB means that they are less worried about
	pooling training, technology and new innovations. Investment in local human capital will not
	only improve prospects for individual firms but also for the global brand as a whole.
	Sources:
	Eddington, N. and P. Toner (2012), “Skills Formation Strategies in Queensland: A Skills Shortage?”, OECD Local
	Economic and Employment Development (LEED) Working Papers, No. 2012/07, OECD Publishing, Paris.
	Froy, F., S. Giguère and M. Meghnagi (2012), “Skills for Competitiveness: A Synthesis Report”, OECD Local Economic
	and Employment Development (LEED) Working Papers, No. 2012/09, OECD Publishing, Paris.