"Serious shortcomings" in skills across all sectors of the British economy have meant poor productivity compared to countries such as the United States and Germany, according to a report this week, writes Kam Patel.
The study shows that in 1996 British levels of output per worker-hour were about 20-30 per cent below those in the United States, France and Germany. Report author Mary O'Mahoney of the National Institute of Economic and Social Research says low skill levels are partly to blame: "Britain lags behind the US in the proportion of the workforce with a degree or equivalent, and falls behind Germany in terms of intermediate vocational qualifications."
A "striking" finding is Germany's dominance in intermediate skills, defined as vocational qualifications above high school but below degree level.
In 1993 the proportion of Germany's labour force with intermediate skills was over twice that in the United Kingdom and the US.
Dr O'Mahoney says that this has compensated for Germany's deficiencies at higher levels. The country has a long traditionof providing qualifications through the vocational education system that are on a par with university degrees in the US and UK.
She said: "The larger part of Germany's advantage in intermediate skills is its greater emphasis on workers obtaining craft level qualifications."
The study found the US and UK fell considerably behind Germany for intermediary skills in ten sectors of the economy including utilities, construction, manufacturing, transport and communications.
Dr O'Mahoney says Britain's skill deficiency is less apparent in the financial and business sectors where graduates are employed, but that even here, "Britain's skill gap remains substantial".
The report presents an overview of British labour productivity against major competitors over the period 1950-1996. In the 1950s productivity levels in most sectors in Britain were above those in France and Germany but well below those in the US.
Over time all three European countries have converged to match US levels but at a considerably quicker pace in France and Germany.
Since 1979 Britain's relative position has not deteriorated significantly.