Workshop: The Impact of Skills on New Zealand Firms

17/11/2011 § 2 Comments

Tomorrow morning, I’m contributing to a workshop at the Ministry of Economic Development. This was a cross-departmental research project led by Philip Stevens. Here’s the blurb:

The Impact of Skills on New Zealand Firms project investigated the impact of skills on New Zealand firms’ organisation, structure, strategy and performance.  This project created a quantitative survey module as part of the Business Operations Survey (entitled Business Strategy and Skills), a small qualitative survey and a follow-up telephone survey.   The research used a mixture of econometric and qualitative analysis to examine the pattern of demand, the use and the development of skills in New Zealand firms. 

Papers from the project were presented at the NZ Association of Economists 2010 conference.

What I found interesting with this project was talking with business owners and managers. They shared a lot about the competitive environment and how it was changing at the time. This graph, courtesy of Shamubeel Eaqub at NZIER, shows how difficult things were for manufacturing and transport in 2009 when we did the interviews.

GDP-graph

That dip in 2009 caused a fair amount of scrambling for work and therefore re-shuffling of competitors. We were interested in how it affected employers’ hiring and training decisions. One group on which we didn’t focus was youth. However, the broader story fits with what Matt Nolan writes about youth (un)employment. There was a lot of hunkering down and avoiding risk.

It would be interesting to do the research again in a few years and look for differences.

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§ 2 Responses to Workshop: The Impact of Skills on New Zealand Firms

  • Paul Walker says:

    And what impact do skills (or human capital more generally) have on firms’ organisation? Rajan and Zingales (2003: 90) argue, for example, that

    “Human capital is replacing inanimate assets as the most important source of corporate capabilities and value. In both their organizational structure and their promotion and compensation policies, large firms are becoming more like professional partnerships.”

    Is there any evidence that NZ human capital based firms are becoming more like professional partnerships? Is there any patten to the form such firms are taking?

    • Bill says:

      It wasn’t something we looked at. Our firms were in transport, manufacturing, and IT, so two out of three had large amounts of physical capital.
      I’ll have to read the paper to see what they measured and how. We didn’t find much evidence of firms changing their business plans because of what employees could or couldn’t do. That suggests firms would make this sort of change slowly.

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