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The way that skills contribute to productivity improvements in firms is still something of a “black box”. There is general agreement that human capital (broadly defined) is important for growth. Less is known about the ways in which skills and knowledge contribute to a firm’s pursuit of efficiency in production, the process of innovation and technology adoption, and to the take-up of market opportunities. This paper reviews literature on the types of skills utilised by firms, the mechanisms by which skills contribute to firm productivity, and how skills are acquired. It identifies potential policy implications relating to work based skills training.
I would like to thank Jeff Borland, Hans-Jurgen Engelbrecht, Ian King, Les Oxley, Bob Buckle, Dean Hyslop and Veronica Jacobsen for helpful comments on earlier drafts of this paper. Helpful comments from participants at a seminar at the New Zealand Treasury are also acknowledged.
The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury. The Treasury takes no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.
Table of Contents
- Executive Summary
- 1 Introduction
- 2 Skills and Firm Productivity – An Organising Framework
- 3 Skills as determinants of firm productivity
- 4 Skill-Technology Complementarities
- 5 Firm and Industry Knowledge Spillovers
- 6 Work-based skill acquisition
- 7 Concluding comments