30 years ago

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Higher education and labour markets looking for
solutions to contrasting needs
Marino Regini Department of Labour and Welfare
Studies University of Milano Paper presented
at OECD/France International Conference Higher
Education to 2030 Workshop on Labour market
changes and the future of higher
education Paris, 8-9 December 2008
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• Up to 30 years ago
• Contacts between universities and business were
  sporadic and infrequent, at least in Europe
• HE and business were two separate worlds with
  regard to objectives, values, organizational
  models and both were firmly convinced that was
  the way it should be.
• Elite university systems
• Fordist production systems

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Last 30 years scenario radically changed

• Mass university
• employability of university graduates
• from securing autonomy of teaching to verifying
  learning outcomes
• student orientation and placement services
• demand for greater efficiency, autonomy and
  evaluation
• Post-fordism and knowledge-based economies

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Relationships between HE and LM

• Two major problems
• How to estimate the actual need for human
  capital?
• A demand for what kind of skills?

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1. How to estimate the actual need for human
capital?

• To what extent do companies have instruments that
  can effectively anticipate their needs for highly
  skilled human capital?
• Do they rely on skills they actually use given
  current organization of work, or can they
  anticipate the skills that would be useful to
  improve such organization?
• To what extent do they demand only competences
  they can immediately use instead of those which
  could increase their innovation capacity?
• To what extent do they give priority to
  increasing and diversifying their store of
  internally available knowledge even if it exceeds
  their short-term needs, as a strategic element to
  make the company flexible and versatile, thereby
  enabling it to adjust more rapidly to volatile
  markets?

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Debate on over-education and mismatch

• Assumption that, for highly trained human
  capital, demand for skills should guide the
  supply of graduates
• However, a large reservoir of human capital,
  though it is seen as a mismatch to existing
  demand in T0, may become a prerequisite for a
  companys capacity to innovate, to reposition
  itself on the market, to enhance its
  competitiveness in T1

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Literature on the varieties of capitalism

• Low road to competitiveness of national
  economies, based on low skilllow wagelow
  product qualitylow price equilibrium
• vs.
• High road based on high skills, high wages,
  high product quality and high prices

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Implications for HE in the future

• The main future challenge for relationships with
  labour market is to be sensitive to employability
  of graduates, but at the same time capable to
  anticipate range and type of skills needed by
  innovative economies, without depending on
  short-term demands from employers
• The worst way to tackle this future challenge
  would be for HEI to simply look at past records
  of graduates employment and strictly adjust
  their curricula, teaching methods, research
  objects, to such records. In this way they would
  avoid major mismatch between supply of graduates
  and current demand, but would amplify the problem
  of adjusting to rapid obsolescence of
  technologies and skills

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2. A demand for what kind of skills?

• Kind of training that companies would like
  universities to provide so that graduates can be
  best equipped to enter the labour market
• very specialized or wide-range knowledge?
• mainly technical or social and relational skills?

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Company size as key determinant of demand

• SMEs tend to favour basic technical and
  work-oriented training. They prefer vocational
  track of tertiary education over academic track,
  where a binary system is in place
• Medium-large enterprises are usually satisfied
  with technical knowledge provided by
  universities, since they can easily supplement it
  with firm-specific training, while they often
  complain about the lack of social and relational
  skills

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Variation in the mix of skills that business will
demand

• Variation mainly depends on a set of
  institutional and organisational features of
  economies and is likely to produce a variable
  impact on the structure of HE
• one such variable is the degree of job turnover
  in a labour market
• another such variable is the degree of
  orientation to customer in the production of
  goods and services

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Degree of job turnover in a labour market

• Depends on institutions of job security and on
  organisational patterns of firm
• A labour market with high percentage of stable
  jobs, for either institutional or organisational
  reasons, will put a premium on specific skills
  produced by HE and required for those jobs
• On the contrary, an economy where unstable jobs
  are predominant will require mostly generic,
  basic skills, which can be used in a plurality of
  work situations

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B. Degree of orientation to customer in
production of goods services

• Some companies compete on ability to adjust
  rapidly to changing demand, or to work in strict
  cooperation with customers in the development of
  goods and services
• Others find competitive advantage in providing
  high-tech and high-quality products and services,
  hence operate in markets dominated by producers
  rather than by consumers
• What the latter demand of HE is mostly provision
  of high technical skills
• The former will look for graduates who have not
  just technical knowledge but also a range of
  social competences

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Implications for HE in the future

• Best way to tackle such variability and
  uncertainty would be providing students with a
  mix of competences
• specific professional skills highly demanded by
  the labour market
• broad multi-disciplinary training that allows
  graduates to adjust to variable and rapidly
  changing work contexts
• social skills highly appreciated by employers