Labor-based Innovation: The Advantage of Skills and Education

Innovation has become a necessity for our economic models and new developments in science and technology are the requirement for progress and economic growth. Historically, the labor force has been able to adjust amidst transition difficulties to these new requirements, but the speed of innovation and of the adjustments needed is expedited in light of Industry 4.0 and the New Digital Era. Labor, however, continues to be the puzzle piece that makes innovations possible and products marketable. The innovation impact of a skilled labor force is obvious and evidenced by how regional developments have varied (especially after the 2007/8 crisis) along the cleavages of industrial sectors (manufacturing vs. services) and skills portfolios of the workforce. Regional diversities of innovation and skills are a key aspect that matter in workforce changes and requirements. Social partners play an important role in this context and a shared responsibility for education and training between employers and unions may serve as a solution to the possible blow of threats and changes to the workforce by new technologies. Long-term, foresightful industrial policy can assure workers skills match the needs of industry, a smoother and improved process in the value chain, and a better transition into manufacturing with advanced technologies.