Phillip Toner

Innovation and Vocational Education

This article reviews the arguments and evidence on the role and contribution of the vocationally trained workforce and vocational training system in technical innovation. The primary focus in terms of the vocational workforce is on skilled production workers and, in particular, tradespersons and technicians. These occupations and the vocational training system are found to have a unique role and make a significant contribution to innovation in both production and Research and Development (R&D). The primary role of the VET system in innovation is technology diffusion. However, there are a number of impediments to achieving this role. These are sustained budget cuts and exclusion of the VET system from national innovation policy, programmes and advisory structures. The latter is attributed largely to the failure of the innovation studies discipline, which has strongly influenced government policy in this field, to study in detail the role of VET occupations and training system in the innovation process. This conclusion is paradoxical as the disciplines own analysis of innovation makes a compelling case that these occupations and training system should be central agents in this process.

Supply-Side and Demand-Side Explanations of Declining Apprentice Training Rates: A Critical Overview

Over the last decade numerous academic, industry and government studies have suggested that Australia has experienced a sustained decline in apprentice training rates and that this is contributing to shortages in core vocational occupations. This article redresses significant deficiencies in these studies by providing new data on long-run apprentice training rates by broad occupational group. This data confirms the existence of a sustained break in the long-run apprentice training rate from the early 1990s to the present. The article also provides an overview and critical assessment of the key explanations of this decline and policy recommendations to redress the decline. It is argued that these explanations may be classified into supply-side and demand-side approaches. The article concludes firstly, that, in general, demand-side explanations provide a superior understanding of declining training rates. Secondly, given the potential importance of trade skill shortages additional research is required both to quantify the effect of the various demand-side contributions to reduced training rates and to reorient current policies to better address these demand-side causes.

Changes in Industrial Structure in the Australian Construction Industry: Causes and Implications

This paper examines changes in the firm-size and industrial structure of the private Australian construction industry that have occurred over the last two decades and assesses their causes and implications. The primary data source is ABS Construction Censuses. There has been significant change in the structure of production in the construction industry with a large decline in firm size and rapid growth of output and employment in the specialist sub-contractors segment. These changes are explained largely as a result of increased subcontracting and outsourcing by larger firms to smaller firms. The changes in firm-size and industrial structure have had an adverse effect on construction productivity; OH&S performance; skilled trade shortages and expenditures on innovation and R&D in the industry.

Competition and the Growth of Non-Standard Employment: The Case of the Australian Construction Industry

ABSTRACT Studies on globalisation suggest that a factor in the growth of non-standard employment in developed economies has been the growing capacity of multinational corporations to arbitrage wage differentials across countries. This analysis applies in particular to industries subject to direct import competition such as commodities and manufactured goods or to non-personal services industries such as internet retail, call centres, engineering and computer consulting. Such analyses have little to say about industries not in these categories. This study focuses on the construction industry, which has experienced a growth of nonstandard employment greater than that for the economy as a whole but is neither subject to direct import competition nor in the non-personal service industry. The article suggests that a different mechanism associated with globalisation and intensifying competition is at work. This mechanism is associated with the increased reliance on private sources of funding for construction projects and, more importantly, the global nature of these funding sources in property trusts and superannuation funds.

Vocational education and training : the terra incognita of innovation policy

Is what is known from research on systemic innovation reflected in innovation policy, both as guiding principles and as actions? This paper highlights a major paradox in the translation of research on innovation into innovation policy in Australia. The innovation studies literature has established the central role of the vocational education and training (VET) system and VET-trained workers in technology generation, diffusion and incremental innovation. Research has also established that the pattern of innovation in Australia, compared with that in many other OECD countries, makes firms more reliant on VET skills to implement innovation. Despite this recognition in the innovation literature, this paper argues that the VET system is largely excluded from government innovation policy and programmes in Australia. Evidence for this exclusion is derived from a textual analysis of the principal Australian government policy statements and government-sponsored studies of the Australian innovation system, and from an analysis of the interest groups represented on government innovation advisory and policy structures. Tentative explanations are advanced for this exclusion and a number of important benefits are identified for the VET system and the wider innovation system arising from closer integration of VET into innovation policy

Contracting out publicly funded vocational education: A transaction cost critique

Contracting out publicly funded vocational education and training (VET) in Australia to private providers has been accompanied by persistent concern at decline in the quality of training. Using transaction cost economics, this outcome is ascribed to the characteristics of publicly funded VET as a commodity and the conditions under which it is privately produced and consumed. The article concludes that, in general, publicly funded VET does not meet the minimum conditions for efficient contracting out. The economic and social consequences of inadequate quality VET provision are potentially severe.

The occupational and skill structure of new apprenticeships : a commentary

Abstract This article critically evaluates recent research from the National Centre for Vocational Education Research (NC VER) on the occupational structure of apprentices and trainees. This study argues that the research is flawed by the NCVERs demand that traditional trade apprenticeships and traineeships be regarded as a unitary vocational education system, New Apprenticeships. It is argued, firstly, that such an approach obscures the occupational and skill structure of traineeships. In contrast to the NC VER research, this study finds that traineeships are highly skewed towards occupations such as labouring and elementary clerical occupations. Secondly, using New Apprenticeships as the level of analysis leads to an inadequate policy response to skill shortages and the needs of individuals disadvantaged in the labour market. Thirdly, research based on the New Apprenticeships concept incorrectly implies that the qualifications and career paths of apprentices and trainees are equivalent. Finally, a related issue is the lack of commensurability of vocational qualifications at the same AQF level, and the problems to which this gives rise for the national system of classifying vocational occupations. It is concluded that in general apprenticeships and traineeships should not he regarded apriori as offering ‘equivalent’ training and qualifications, though claims for equivalence could be made on a case-by-case basis on the weight of evidence.

No Case to Answer: Productivity Performance of the Australian Construction Industry

This article examines the productivity performance of the Australian construction industry and identifies some of the key factors affecting productivity growth. It also critically assesses the recent Productivity Commission (1999) report on the construction industry. In particular, the article challenges the argument of the Productivity Commission that a high level of unionisation within the industry is adverse for productivity growth. Moreover, the recommendations of the Commission directed at increasing productivity within the industry are argued to exacerbate those structural features of the construction industry which impose a constraint on productivity growth. The primary data sources are national and international official economic data on the industry and a number of case studies of major city building projects undertaken by the authors. The study finds that the Australian construction industry is within the top three OECD countries in terms of construction output per person employed.

Systems failure, market failure, or something else? The case of skills development in Australian innovation policy

Many innovation theorists assume innovation policy-making is driven by the theoretical apparatus of market failure and argue the superiority of the systems failure approach. We look at the inclusion of skills development in Australian innovation policy to assess what drives innovation policy. This is done by examining the inclusion of vocational education and training (VET) in major analyses and reports on Australias innovation system and membership of the boards of innovation councils. We found that both of the major Australian political parties and the major reports on Australias National Innovation System (NIS) present skills development as a principal driver of the NIS – indicating a clear market/system failure concern. Notwithstanding this, we found the VET system is excluded in both government studies of Australias NIS and innovation councils. This indicates the drivers of innovation policy may not be market failure or system failure. Contrary to the presumption of innovation academics, policy may well be extremely path dependent and subject to what is in the departments purview in each policy domain. There is a clear caution to developing countries in following the innovation policies of developed nations such as Australia that ignoring vocational skills development is risky without a fully developed VET system. In fact, it is possible that vocational skills lie at the core of development in less developed countries and so following Australias approach could be counterproductive.

APEC labour markets: Structural change and the Asian financial crisis

Abstract This study examines the impacts of longer-term structural changes on the labour markets of Asia Pacific Economic Cooperation (APEC) member economies, as well as the short-run labour market consequences of the Asian financial crisis. All APEC economies have experienced significant structural change in the process of development. A major factor in this structural change has been increased trade intensity (increase in exports and imports as a share of GDP) that has occurred over the last 20 years. Because these structural changes have been extensively induced by trade liberalisation, this study provides insights into the likely consequences of the implementation of APECs agenda on trade and investment liberalisation and facilitation. The impact of structural change is examined using a range of data, such as disaggregated changes in output and employment by industry and occupation over the period 1980 to 1997, and data on changes in trade intensity for each of the APEC nations. Other data, such as changes in rates of urbanization, are also used to indicate the other important concomitant effects of economic transformation. For several Asian economies, the linear path of growth and structural change was severely disrupted by the Asian financial crisis. This article examines the impact of this crisis on Asian labour markets, in general, and those most affected by the crisis, in particular. In many countries within the region, a failure of education and training systems to respond to often rapid shifts in the skill composition of labour demand is leading to industry and occupation specific labour shortages. International labour migration within the APEC region is viewed as a product of these structural changes and a mechanism that assists in filling gaps in the labour markets of the regions economies.