I am delighted to be here today to support this conference on
"Learning and Skills and Business Performance. We are launching two
important reports. One on learning and productivity and a second on
tackling low skills.
I'll come on to why I believe these reports are important for Government
policy shortly, but first, I want to clarify our agenda for skills and
how it fits with the wider agenda of this Department.
The DTI strategy has set itself the clear ambition of significantly
raising UK productivity to deliver 'Prosperity for All', This goal
cannot be attained without addressing management, leadership and skills.
Skills are one of the key drivers of productivity.
In July, I and other ministerial colleagues here in the DTI and
across government, from the DfES, Treasury and Department of Work and
Pensions - were partners in the launch of the Skills Strategy. Our new
Skills Strategy puts business needs at the centre of skills policy. This
marks a significant shift in thinking.
This is important, because I believe passionately, that we should not
just acquire learning and skills for their own sake. But we need to see
them as a tool to increase business performance and improve the quality
of all our lives.
For it is new skills that allow workers to generate new ideas and to
adapt to changing economic environments. If we are to succeed in the
future, the UK cannot compete on low costs and low wages. High skills
and innovation are the key to our competitive future.
I firmly believe that data is the key to developing best policy. We
rely on excellent research and evidence to support our policy making.
And I am impressed by these two reports that represent business-focussed
research to increase our understanding on skills and learning.
I am heartened to see today so many people here, and especially so many
government policy makers and eminent social researchers.
I think this is testament to the quality and relevance of this research.
Let me turn to the first report on informal learning and productivity
- by the University of Leicester. It amazes me when people say small
businesses don't train. Digby Jones of the CBI is a passionate advocate
of training.
I spend a lot of my time visiting small businesses and so I know for
a fact how important informal learning is. So much learning takes place
in the workplace either on or off-the-job.
This research report has confirmed the importance of informal
learning to small businesses. What really brought this home to me was
the case study in this report on the hairdressing salon. This is a small
business with 8 staff and a turnover of £200,000 a year. The owner
actively encourages staff to learn from each other and to share ideas.
They believe that as a result of this informal learning, sales of hair
products have increased five-fold, and the researchers see this as
informal learning raising skills and increasing business performance.
How a business is organised also affects the outcome of the informal
learning.
So one of the messages I have to deliver today is this. Learning is not
enough - how new skills are applied is crucially important. Learning can
be encouraged and nurtured by a learning organisation. But, the report
shows this can also be stifled by the organisation of the business. You
go to all that trouble and then the effort is wasted! So there are clear
business benefits to getting the context of learning right and I think
that the case study showed that.
I congratulate the researchers on moving us forward in this important
area.
The other report we are launching today is Tackling Low Skills.
The findings of this research make for challenging reading. We are a
Department that is committed to helping businesses move from competing
on low costs to competing on unique value and innovation. This is
powerful research that shows the extent of the challenge facing us. I
thank the researchers for illustrating with such compelling evidence the
problems facing us.
These are exactly the issues we are addressing as part of our
Innovation review. This review will also support and reinforce the
Skills Strategy in putting employers first. And ensuring we nurture
inspirational managers and leaders that will continue to keep the UK at
the heart of the worldwide knowledge economy. It is innovation that
allows companies the opportunity to move out of the spiral of low
specification products that are supported by low skills and too often,
low wages.
The Government plans to increase education spending by 34% to 5.6% of
GDP by 2005/6. We in DTI have reduced and refined the number of business
support schemes. We're focusing our resources on support that will make
the most difference for business success. We're ensuring that skills are
an integral part of all business support products as we pledged to do in
the Skills Strategy.
As this report highlights, using innovation to move companies further
up the value chain is not easy. But we are well-positioned to work with
other partners in central Government and others, such as the Small
Business Service, Learning and Skills Councils and Regional Development
Agencies and, of course, with businesses themselves. Together, we can
move companies up the value chain, ensure a long-term demand for skills
and ensure that skills are used to maximum effect in order to deliver
'Prosperity for All'. We have done it with our manufacturing strategy
and the Manufacturing Advisory Service.
This research shows what we must do for the whole economy. So once
again, congratulations to the authors.
I hope we will all benefit from these two insightful pieces of
research.
Enjoy the rest of today's event.
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