CONCLUSIONS
Review of Approach
It is worth restating that this analysis rests upon a detailed understanding of the literature in this area. This was enhanced by detailed discussions with sectoral and trade bodies to provide a strong sectoral context. The literature review and sectoral context underpinned a number of employer case studies in each sector. The case studies were undertaken during 2008. They were completed towards the end of that year, when the economic downturn was beginning to be felt.
The sectoral approach was initially an analytical device. However, as the case studies progressed, this approach also provided a useful practical basis for policy implementation.
It is important to draw conclusions, but equally important to recognise the limitations of those conclusions. There is no basis for detailed policy recommendations or sweeping generalisations from this work. Rather, the approach suggests tentative conclusions.
Product Market Strategies and Skills Utilisation
Product market strategies are a result of employers' purposive behaviour but they are shaped by the conditions in which competition between employers takes place. It is here that public policy plays a part and where the research found important sector differences in the factors which influence these strategies. Skill strategies are even more under the control of employers, with employers taking the lead, but even here public policy still has some influence in shaping employers behaviour, although the part played by this influence varies between sectors.
There are a range of areas where government can influence the firm's product market strategy. These include factors such as regulatory efficiency, legislative standards and the development of criteria for compliance for awards or grading systems. There is also the opportunity to influence product market strategy through 'branding' initiatives, through facilitating collaboration between employers around their common requirements, as well as through taking more direct action in parts of the Creative Arts sector. Having said that it must be emphasised that market conditions and changes within them are the major influence in firms' product market strategies, as witnessed by the recent events in the market for financial services.
Skills were found to play a variable part in their competitive strategies. In some instances the utilisation of employee skills is key to the company's competitive advantage in the market. In other instances the skills of the labour force are more marginal to the company's competitive strategy. Where they play a key part then employers see the maintenance of their control of skill formation as crucial and of necessity see themselves as in the lead on skills issues. This is especially important when considering some employers who are content with their existing arrangements and processes.
The link between product market strategies and skills utilisation is also variable. Skills are a derived demand, driven by the firm's product market and competitive strategies, but not in a straightforward manner, as employers have a degree of choice as how they use the skills of their employees for business purposes. In addition there are other factors such as technology, management practices and trades unions which play an important role in skills utilisation.
The Sectoral Dimension - One Size Doesn't Fit All
In any attempt to influence a firm's product market strategy, there is no 'silver bullet' - no single approach which will always work. Instead, this analysis suggests a sectoral approach, involving employers and recognising the relative importance of public sector levers shows more promise.
The sectoral approach provides a mechanism through which to apply a model which considers both employers' product market strategy and their organisation of work. Some of the sectoral case studies highlight the benefit of a 'collaborate and compete approach'. Here, employers come together in formal groupings to identify common issues and appropriate solutions around their product market and skills requirements. They also use this common approach to influence the public sector. Such sectoral groupings can also act as a mechanism for identifying and disseminating transferable good practice in skills utilisation which also has a sector dimension. There are of course other wider non-sector based issues, such as those relating to small businesses generally and the particular challenges that family-run businesses may face. However, the research suggests that a sectoral approach which recognises some of these common themes may be the most suitable way forward.
The research has also illustrated some of the work which Sector Skills Councils already perform in this area. Indeed the Scottish representatives of some of these councils played an important part in shaping this work. As these bodies have a UK-wide remit, this highlights the importance of the UK Commission for Employment and Skills and the Scottish public sector generally working together.
Scope for Public Sector Influence
Within the existing literature, a number of ways by which government could influence employers' product market strategies have been identified. These include legal measures such as the use of training levies, licence to practice and health and safety requirements. They also include procurement specification and government-sponsored programmes such as Investors in People. Similarly, the Government has often adopted the role of persuasion through research evidence.
This research suggests that the Government may also have a role in influencing product market strategies through other means. These include working with the private sector to develop specific branding initiatives, recognising the scope for influence through regulatory efficiency, legislative standards and criteria for compliance (e.g. grading systems). These can function to encourage employers to change their product market strategies towards higher value-added goods and services.
Moving Forward
This research is based on a firm sectoral context allied to detailed case studies. The results and conclusions must be tentative. Nevertheless, the analysis suggests that a degree of differentiation is required in any attempts to influence firms' product market strategies and skills utilisation.
While recognising that employers themselves are in the lead and that changes in market conditions are the biggest influence in firms' product market strategies and their utilisation of their workforce's skills, the research nevertheless suggests that there is scope for public sector influence. A 'one size fits all' approach would not recognise the sectoral dimensions evident from this case study research. Different levers are more suitable and more relevant in different sectors.