The Global Auction and the Future
of Education, Training and the
Labour Market in Europe
Phillip Brown, Hugh Lauder and
David Ashton
Danish Presidency Conference, Copenhagen, April 2012
The Promise: The Rise of the Global Knowledge Economy
 Technological Evolution;
 The Age of Human Capital - Education, Jobs and
Rewards;
 Rise of the ‘Knowledge’ Worker;
 Income Inequalities = Global Returns to Human
Capital/Talent;
 National Comparative Economic Advantage:
 Developed Economies = Quality Head)
 Developing Economies = Price (Body)
Head and Body Nations
‘In the past, material forces were dominant in
national growth, prestige, and power; now
products of the mind take precedence. Nations
can transfer most of their material production
thousands of miles away, centring their
attention on research and development and
product design at home. The result is a new
and productive partnership between “head”
nations, which design products, and “body”
nations, which manufacture them.’
R.Rosecrance,
The Rise of the Virtual State, 1999.
The Opportunity Bargain: Learning = Earning
 ‘Free Trade’ and Market Competition;
 Compete on ‘Quality’ not ‘Cost’;
 High Skills Workforce;
By 2010 EU ‘the most competitive and
dynamic knowledge-based economy in
the world, capable of sustaining economic
growth with more and better jobs and
greater social cohesion.’ (Lisbon, 2000)
 Innovation and R&D;
The Great Recession
 Great Recession or Great Transformation?

Education and Employment Challenge is Structural + Cyclical;
 The Need for a Fundamental Re-Think of Human Capital
Theory (Learning = Earning);
 New Approach Based on the ‘Global Auction for Jobs’;
 VET and Innovation for a Better Quality of Life and Shared
Prosperity.
Research Background
 Argument Based on Over a Decade of
Research (Ongoing);
 Examine Views of Transnational
Companies;
 Examine Views of Senior Policy-
Makers, including China & India.
Research Evidence
 Seven Countries - Britain, China, Germany, India,
Singapore, South Korea, and the United States;
 Three Core Sectors - Automotive, Financial Services
and Telecommunications;
 Interviews - Over 250 Company and Policy
Interviews;
 Trends Analyses - including credentials, employment
and income data.
Trend One: Globalisation of ‘High Skills’
•
Enrolments in Tertiary Education Doubled Within a
Decade from 72 to 136 million (1996-2007);
•
China Overtakes US with Over 20 Million in HE (2006).
Now 27 Million Enrolled in HE;
•
China’s Talent Plan, Extra 95 million HE Students in Next
10 Years (2020);
•
Over 60 Percent of Engineering Doctorates were Awarded
to Foreign Students in Both American and Britain.
The Expansion of Tertiary Education in Selected Emerging and Developed Countries (enrolments)
Source: Compiled by the authors from World Bank data.
Innovative Learning
 Crouching and Leaping Economies
‘Today, China is the world’s factory, tomorrow the world’s
competitor.’
Senior Civil Servant, Beijing
‘The multinational companies are our schools.’
Leading Chinese Economist
‘Each one of us must set our sights higher and aim to be the best in
what we do. Our schools and colleges must aim to be the best in the
world. So too our businesses and laboratories.’
India’s PM Mr.Manmohan Singh, 2007.
Trend Two: Quality-Cost Revolution
‘We have an “inside out” model which is very clever. It gives
us more flexibility over what to do where’
Senior Indian Manager, EU Electronics, Mumbai
‘What is really different here is research, we generate ideas
for the frontline to use…These are the areas that we find
that talent is delivering to an even higher standard than
expected. We’re not doing those menial call centre type
jobs. It’s global work and that’s where we think we’ve been
able to add a lot more value than what was initially
expected and that will continue.’
Senior Indian manager, US Bank, Mumbai
Inside-Out in New Delhi
Inside-Out in Mumbai
3/ Rise of Digital Taylorism
 ‘Industrial Revolutions are Revolutions in
Standardization’ (J.Tate);
 From Mechanical To Digital Taylorism;
 Knowledge Work  Working Knowledge;
 Simplify  Codify  Standardise  Digitalise
 Software Distribution;
 Modular Corporation?
Digital Taylorism (Cont’d)
‘The presences of Digital Taylorism can’t be overstated
because it is happening everywhere. All your call
centre jobs or your business processing that happens,
it’s typically Taylorism in a more digitalized world,
because there are only five or six things you have to
answer and they’re on your system and you don’t
customize anything…this is true of all kinds of jobs
today in India…much of the work is very much like an
assembly line.’
Indian HR Manager, US Transnational (Jan, 2012)
 The agenda for public services
reform means a fundamental
shift in the way services are
delivered and technology has a
key role to play, offering new
ways of working.
 Through innovative use of
technology, public services can
be transformed.
 Is your organisation looking to
increase productivity, flexibility
and mobility of their workforce?
 Are you looking to take full
advantage of the cost savings
and service improvements
offered through technology
solutions?
Digital Taylorism Continued
 The Future of Knowledge Work?
 Developers (creating)
 Demonstrators (executing)
 Drones (digital routine)
4/ War for Talent
 Stratification of Knowledge Workers;
 From Expertise (Skills) to Performance;
‘It’s more important to get great talent, since the differential
value created by the most talented knowledge workers is
enormous.’ McKinsey Consultants.
 From ‘West’ to the ‘Best’  Globalisation of the ‘War for Talent’?
 Global University Rankings – ‘Being Good is No Longer Good
Enough’!
A Global Auction
 Competitive Advantage Through People  ‘People Have
Become the Value Chain of the Future.’;
 Global Auction = Dual Auction:
 Forward/Progressive (High Skills, High Wages)
 Reverse/Dutch (High Skills, Low Wages)
 Internationalisation/De-nationalisation of Corporate HR
Strategies  Re-Think Role of National VET;
 Impact of Global Auction Depends on National Context 
European Context.
Implications for Skills and Innovation in the EU
 No Return to ‘Business as Usual’;
 High Skills  A Declining Advantage  Source of Innovation?

‘If Everyone Stands on Tiptoe, No One Gets a Better View’ (Hirsch);
 Mixed Economy – Not Just University Graduates;

Have to Compete at Most Links in the Value Chain;
 Social Hunger v’s EU Crisis of Expectations;
 Youth Unemployment (EU 21%) & Underemployment;
 ‘Fair Day’s Pay for a Fair Day’s Work’ (Income Inequalities);
 VET is at the Heart of Rebuilding ‘Productive’ Economies (Beyond Human Capital);
 Re-Thinking VET = Re=Think Innovation = Re-Thinking Society.
Innovation Union
• Innovation Not Always
‘Skill Biased’;
• Competitive Challenge
(Best) V’s Equity Challenge
(Rest);

• Jobs Strategy 
‘World-beating science is essential to the
Innovation Union. But the Innovation Union is
above all an economic strategy and a strategy for
jobs. It is the other side of the deficit reduction
coin. The growth side of the coin.’
Maire GEOGHEGAN-QUINN Commissioner for
Research, Innovation and Science Innovation.
Globalisation of Innovation.
• National Innovation V’s
Innovation Union
Science Cities: GIANT - The Grenoble Innovation for
Advanced New Technologies – 40,000 People.

No EU (Other Than UK) University in Top 30 of World
Rankings (THE-Reuters), 2011.
VET for an Innovation Union
 Innovation is a ‘Social’ Process Not Just a ‘Technical’ Issue (‘Flexicurity’
in Education & Labour Market);
 Corporate Employers: ‘Social’ Skills Bigger Issue Than Technical Skills;
 Credential ‘Rat Race’  Stifles Individual Inventiveness/Risk-Taking;
 Freedom for ‘Individual Curiosity’  Vocational Education Beyond
‘Trade Education’ (Dewey, 1916):
‘The only adequate training for occupations is training through occupations…’
But ‘The dominant vocation of all human beings at all times is living –
intellectual and moral growth.’
 How to Build Progression and ‘Parity of Esteem’.
VET for an Innovation Union
 Dynamic Capability: Individual  Societal:
‘Every expansive era in the history of mankind has coincided with the
operation of factors which have tended to eliminate distance between peoples
and classes previously hemmed off from one another.’
(Dewey, 1916);
 ‘Inside-Out’ Model (Issue of Inclusion/Diffusion);
 Connecting SMEs to Global Webs/Network  Smart Governance Beyond
Market Forces;
 Key Role for Employers, e.g. Job Creation; Co-Creation; ‘Productive’ Education;
 How Should We Educate and Skill the Next Generation (Start by Re-Educating
Ourselves!)?
Share of Global GDP
Source: A.Maddison – Historical Statistics
Any Questions!