The political economy of high skills: higher education in knowledge-based labour markets

ABSTRACT

A successful transition into the knowledge economy depends upon higher level skills, creating unprecedented pressure on university systems to provide labour markets with the skills needed. But what are the political economy dynamics underlying national patterns of high skill formation? The article proposes a framework to theorize the relationship between higher education systems and knowledge-based labour markets based on two dimensions: the type of knowledge economy predominant in a given country and the extent of inter-university competition. It is argued that the former explains what type of higher level skills will be sought by employers and cultivated by governments, while the latter helps us understanding why some higher education systems are more open to satisfying labour market demands compared to others. A set of diverse country case studies (Britain, Germany, South Korea and the Netherlands) is employed to illustrate the theory.

KEYWORDS:

• Knowledge economy
• higher education
• skill formation
• institutional change
• varieties of capitalism

Editors' Note

This paper was awarded the ‘Best Paper Prize’ by the Council for European Studies’ Research Network on Political Economy and Welfare. The Research Network each year offers a Best Paper Prize to a paper presented at the last CES conference. The prize jury selected this paper as the best paper presented at the 2018 CES conference in Chicago.

Acknowledgements

Previous versions greatly benefited from comments by and discussions with Chiara Benassi, Pepper Culpepper, Sonia Exley, Timo Fleckenstein, Julian Garritzmann, Lukas Graf, Tim Hicks, David Hope, Alison Johnston, Cathie Jo Martin, Paul Marx, Sam Mohun Himmelweit, Tobias Schulze-Cleven, David Soskice, Kathleen Thelen, Chloé Touzet, Tim Vlandas and participants to the 2018 CES conference, the 2018 SASE conference, the workshop on the Political Economy of Education at Nuffield College (September 2018) and the Work, Economy and Welfare seminar at the University of Edinburgh (November 2018).

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Niccolo Durazzi is a Lecturer in Political Economy of Social Policy at the School of Social and Political Science, University of Edinburgh. He tweets at @niccolodurazzi.

ORCID

Niccolo Durazzi http://orcid.org/0000-0001-7581-5595

Notes

1. See online supplemental material for details of interviewees.

2. I am grateful to David Hope for making available to me the dataset on GVA used in this section. He should not be implicated for how the data has been elaborated and/or presented.

3. A more detailed indicator of competition suggests that share of private financing is a reliable proxy as it correlates with other dimensions of competition, such as survey data on students’ perception of the importance of rankings and of universities’ prestige (see section 2.2 in Durazzi 2018).

4. To the best of my knowledge, data on the implementation of PRIME with a similar level of detail have not been released at the time of writing.

5. I am grateful to Kathleen Thelen for her advice to look for the ‘centre of gravity’, although she should not be implicated for what has been identified as such.

Additional information

Funding

This work was supported by the German Academic Exchange Service (DAAD) [grant number: 57214227]; and the British-Korean Society Post-Graduate Bursary Academic Session 2016–2017, British Association for Korean-Studies.