On December 31st 1899 a millenarian cult set fire to their homes and possessions because their leaders were sure that the end of the world was on its way. Assured of certain certainties, they waited for apocalyptic collapse singing hymns as their local world went up in smoke. 

Here and now as economies seem to talk themselves into a downturn even worse than we are in, we should be careful not to torch the one resource that can make an upturn sustainable – human resources and their skills.  

These are challenging times and many governments promise major investments into infrastructure as a means to trigger an elusive upturn in a troubled world economy. President Obama will sanction major investment into Americas creaking hardware (road, rail and air networks) and, software in the shape of broadband. $600 billion will be spent within 18 months ; creating up to 4 million new jobs. Other countries will follow.

What about peopleware and skills? Will there be commensurate global commitment to skills or, will training budgets be slashed and a generation lost? Crucially, have we the leadership and imagination in government and business to be inclusive with the informal economy?

The Last Mile Video that has triggered significant debate on this Blog highlights the issues that any emerging economy or, one that has been dislocated by war or natural disaster faces. The ingredients of sustainable growth may be there on the planning horizon but, the road (port, rail or airport) to get there may be wrecked; unfit for purpose or just not there. Look again…

T.S. Eliot spoke of the parochialism of time. He was speaking of the tnedency to see our own Age as relevant and all that went before as redundant. Sadly, the same appears to be happening with Human Capital.

In his recently published book, Talent on Demand, Peter Cappelli provides valuable historical context for our current Age of Uncertainty. Time was, when life time employment was a reality and massive companies could plan ahead and develop their own talent. Then, increased global competition challenged these assumptions as downturns and layoffs challenged confidence in planning ahead. Then, the long period of growth that led up to the current crisis created a shortage of skills that was all too often solved by poaching from the competition. It is a common feature of the emerging economies such as India – let the others do the training.

And yet, as Peter Cappelli stresses, the endless back and forth poaching of people from other companies is a zero sum game that will not be sufficient to build the human capital needed in the years ahead.

We need to look harder at capacity in emerging markets; dislocated economies and even the infrastructure within a far too often arthritic developed world. The agenda has to take shape around:

1. Capacity to connect. Look at the way the Pearl River Delta laid the ground for success with ports, roads, all sorts of hardware and software. Logistics is the key to transform outcomes within the urban areas and, as a means to generate local, national and global market access for remote rural areas.

If we fail to do this the gap between, say, Shining India and India in the doldrums is not fine. It is as wide as the potholes on roads unfit for purpose. Developed, emerging, transitional and wrecked economies have to envision their future environment and make sure that they have all modes of physical and information connectivity in place to get there. 

Business continuity is what any business will look for and only straight-through end-to-end connectivity can make this happen. Success will be measured in the sheer scale of FDI (Foreign Direct Investment) or, other forms of funding available in a given location. In the current climate, any Region must understand that however pressing their own agenda scarce investment funds have a massive choice on where to go.  

2. Capacity to deliver – skills. Have we got the know how in place to make expensive connectivity effective (doing the right things) and efficient (doing the right things right)? This means skills. Increasingly, those regions that take this seriously will attract and retain the one resource capable of making sustainable growth happen – people.

It is alarming to see layoffs. It is even worse to see this amongst the young whose frustration may take other forms. This is not the place for politics but, even an induced upturn will stall if the skills are not in place to move the economic levers. The agenda must cover:

  • Skills inventory & base numbers. Do we know what skills are in place and what is needed? Functional literacy requirements are raised every time equipment manufacturers develop their products.
  • Future proof skills. They say that 50% of the jobs of the future have yet to be invented. The real issue here is that learning and education has to be responsive to real needs and not just be about better yesterdays. This is where what is relevant to emerging and dislocated economies becomes as relevant to the developed world. There is no way that the established powers can add value using facilities, connectivity and resources that are no longer fit for purpose. Compare any US airport with those of China; cross London at a speed slower than at the time of Cromwell and you start to see the risks that are being run.
  • Capacity to improve performance. Maybe the word training has been polluted by a sense that this is an optional extra. We need to demonstrate that work on skills will improve performance:
    To maximise the potential of youth entering careers 
    To get more out of expensive assets. Note. This is a key point. Many orders for new equipment have been postponed or cancelled. The onus will be on getting more out of what is in place.
    Improve operator skills to maximise output. Are we assessing skill levels often enough – if at all.  
    Move from owning assets to contract project management. This means using a plant hire model managed by specialists to deliver projects on time and under budget. To understand this point, just look at the low % of rental / contract assets in the Gulf States. 
  • Environmental concerns. Is learn-on-the-job all we know? How much CO2 is generated by learners or, operators that could do to know more about how to get the best out of their machines? What about simulators?  

3. Capacity trigger. The political will and the policy framework to make this happen is a must. We have observed elsewhere that of 191 nations on earth; 50 City Regions are now >65% of economic output and will soon be home to 75% of the worlds population. There are challenges and a dark side to such density. However, there are economies of scope and scale that can make this work and the approach must embrace:

  • Policies that champion innovation and entrepreneurial spirit.
  • Policies that develop skills programmes that are designed to make trainees Job Ready and not just accredited to standards that may no longer be relevant.
  • Ease to do business. This could mean simplified documentation and regulatory process.
  • Transparency. This means dealing with corruption.

We all appreciate skill on the sports field. We need the same level of commitment to the field of work. And the current Economic downturn cannot become an excuse to postpone – or even cancel – the future. That would send the demographic dividend up in smoke.

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