CIMR Workshop: Knowledge, Skills and Regional Divides

Dr Maria Abreu, University of Cambridge and Dr Marte C.W. Solheim, University of Stavanger shared insight into the relationship between region and skills in this public policy workshop.

How do education, knowledge and skill affect regional differences in productivity, innovation and opportunity? How can these outcomes be shaped by local and regional institutions and how by national policy?

On Wednesday 30 June 2021, we were delighted to welcome Dr Maria Abreu, University of Cambridge and Dr Marte C.W. Solheim, University of Stavanger, Norway to share their research into these questions.

Chaired by Dr Frederick Guy from Birkbeck’s Department of Management, this policy workshop brought together students, alumni and colleagues of the CIMR to join the discussion.

Knowledge, Skills and Regional Divides: the Industry Perspective

Having previously worked in the maritime industry, Dr Marte C.W. Solheim became interested in how foreign-born workers perceived places they moved to and the role of foreign-born workers in organisations and specifically in their contribution to innovation processes. This has shaped her research interests and she shared insights from two papers on the topic of regional divides in skills and the relationship between people and place.

She began the discussion with the paper ‘One Coast, Two Systems’, which explores regional innovation systems and entrepreneurial discovery in Western Norway.

Marte highlighted that a region’s innovation system consists of two sub-systems: industry and knowledge infrastructure. The level to which a region’s innovation system is more specialised or diversified will impact their entrepreneurial discovery process (EDP).

In an empirical and qualitative analysis of two Norwegian cities, Bergen and Stavanger, Marte and colleagues found that the barriers to EDP are different for diversified and specialised regions. In a specialised region such as Stavanger, a barrier to EDP is strong existing networks which affect who can access funding, potentially hampering a diversification of ideas and competencies. In a diversified region like Bergen, fragmented innovation systems may hinder knowledge exchange.

In a second paper, ‘Dynamic capabilities in times of regional distress’, Marte and colleagues explored the relationship between industry dependency, such as Stavanger which relies heavily on oil and gas, and enterprise level dynamic capabilities. Herein, they study whether dynamic capabilities alleviate enterprises` revenue losses after an external shock (oil crisis). Herein, Marte highlighted that unrelated education diversity alleviates revenue losses for enterprises located in a region strongly affected by the decline. Marte concluded by suggesting that an industry’s choice of region could have a significant impact on future skills.

Skills, Productivity and Regional Variation

Dr Maria Abreu continued the discussion with an exploration of the links between skills and productivity and regional variations.

The 1990s and 2000s were periods of rapid productivity growth in the UK due to innovation, investments in capital and an increase in skills as more people attended university. Following the financial crisis, there was a sharp decline in productivity, which has continued to remain low, in part due to low levels of on-the-job training, poor young adult literacy and numeracy skills and low rates of technology adoption.

Maria highlighted the growing regional disparities in skill levels across the country. While the UK has the worst spatial inequalities in skills in Europe at all age groups, research has shown that investment in early education and non-cognitive skills, such as patience, self-control and emotional maturity are effective in addressing this gap.

Looking at higher education specifically, the distribution of high-quality universities across the UK has resulted in fewer regional disparities. However, graduates will not necessarily stay in their university region: a quarter of new graduates work in London six months after graduation (HESA). Maria argued that is easier to keep graduates from the UK and abroad in regions than to attract them away from London. Introducing regional differentiation in visa requirements to attract workers to certain regions could be one way to address this disparity.

Maria also highlighted the patchy distribution of training and lifelong learning across the UK. Low levels of in-work training are particularly striking for workers on zero hours contracts, the self-employed, older and female workers. Maria called for policy that focused on demand as well as supply and targeted adult training to address these disparities.

What role for the digital economy in knowledge and skills?

In response to these presentations, discussant Federica Rossi, CIMR asked whether digital innovation was exacerbating regional divides, as high tech versus traditional industries differ in terms of productivity growth and in the regions in which they operate.

The pandemic has also offered potential solutions to regional inequalities, for example the opportunities to work remotely which free workers to move to different regions in the UK.

Federica argued that policies that make areas more attractive to graduates may be more effective than those which compel individuals to stay in a certain region. Discussion was followed by a question and answer session with workshop participants. We would like to thank our speakers and all who attended for an insightful and stimulating discussion on knowledge, skills and how policy intervention might address regional divides.

The recording of this workshop is available here.