Stephanie Flanders on... skills shortages

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For years, we’ve heard a lot about the dearth of skills in the UK and the risks of any economy getting trapped in a low wage, low skill equilibrium. And obviously, as economists, people talk about this as a market failure, that there’s a lack of investment in training because companies only want to invest in very specific training to their company that can’t be used anywhere else, because if you do invest in more transferable kind of general skills, then the risk is your workforce is just going to go and work somewhere else. I’m not sure that’s true.

When you talk to businesses they tend to invest in general skills as well, although they complain and they want the Government to do more. And the Government has tried to do a lot more; there’s a lot of apprenticeships, there’s a lot of investment in skills, but the only projects that I see working are the ones that keep that sort of fine line between engaging with companies enough so you're teaching people the right things but not engaging with them so much that they find the whole thing a pain in the neck.

But that’s my view. Join the debate on the Open University.