Full text: Study week on the econometric approach to development planning

d) The circuit of education and training. The purpose of 
this circuit is to try to match the future demand for skills, as 
determined by future output levels and techniques in different 
industries, with the future supply of skills, as determined by 
the demographic characteristics of the population and the 
system of education and training. The idea is a simple one: 
to get away from the assumption of homogeneity in the labour 
force which is usually made in empirical work on production 
functions, and to accord to labour skills an importance equal 
to that usually accorded to changes in capital equipment. If the 
productivity of labour is to rise, new techniques must be 
adopted, but this will not come about easily unless more people 
are trained in the appropriate skills. Nowadays technological 
change is particularly rapid, and a failure to realise this may 
make it impossible to take full advantage of the improvements 
that science is offering. 
The work we have done so far on this subject is contained 
in [5] [6]. It relates entirely to the demand for skills and 
suggests that, in Britain at any rate, the supply of the higher 
and, more particularly, the medium skills is not keeping pace 
with demand. This indicates the need to increase the number 
of technicians and craftsmen turned out by the system of edu- 
cation and training. The craftsmen, in particular, must be 
trained in the newer crafts; there are many crafts that are 
dving and do not need replacement. 
But given that we know how the demand for skills is chang- 
ing, how are we to change the supply to meet this demand? 
Our intention here is to set up an activity model of the system 
of education and training, including the very important element 
of retraining. By this means we hope to be able to work out 
the activity levels needed in different branches of the educa- 
tional system to provide in the future an educational distribu- 
tion of the population which, after allowing for ‘wastage’, that 
is for skills not used in the productive process, will ensure an 
1] Stone - pag. 59

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