Product strategies, skills shortages and skills updating needs
This report explores the relationship between firms’ market strategies and their skills needs. Building on previous analysis and drawing on data from the National Employer Skills Survey, it addresses some key questions. To what extent do the skills available from a firm’s workforce have a bearing on the markets in which it can operate? To what extent does a firm’s market strategy shape its outlook on skills and its skill needs? These questions are of key importance when thinking about the economic case for skills and the challenge of galvanising sectors to improve the skills and productivity of their workforces.
Product strategies, skills shortages and skills updating needs: Evidence report 30 (PDF, 846 Kb)
Published July 2011
The aim of this study is to examine whether there is a relationship between the type of product strategy adopted by an employer and the extent of the skills they require and the skills challenges they face. It uses data from the Employer Skills Surveys carried out in England in 2001 and 2009 to examine the nature of the relationships, and also investigate the extent to which patterns available in 2001 were still present in 2009. It builds on previous analysis carried out by Mason (2004) on the 2001 Employer Skills Survey.
This report provides evidence that establishments pursuing high value-added product market strategies are more likely to have higher workforce skill levels than their counterparts with medium or lower value added product market strategies. In addition, these establishments are more likely to be actively looking to update the skill levels of their staff and less likely to have skill gaps, perhaps as a result of their pre-emptive action to address problems before they arise. The relationships identified are interdependent. This reinforces the message in literature on resource and knowledge based theories of the firm, which suggests that business strategies and firm-level resources tend to evolve together over time.
