This chapter focuses on the role of skill formation, wage-setting, and public service provision in shaping different national growth strategies in a post-industrial context, taking the cases of Germany, Sweden, and the UK as detailed examples and making use of data from the EU-KLEMS Growth and Productivity Accounts Database (2008). It highlights the role played by skills policy in shaping patterns of specialization in high productivity, traded sectors, which are important engines of growth even in “consumption-led” regimes. It shows that Sweden’s ability to compete in less price-sensitive, high-end services (and manufacturing) markets rests on the availability of a workforce with high levels of tertiary skills. Germany’s reliance on more traditional manufacturing sectors is rooted in its well-established system of firm-based vocational training and its limited tertiary sector. In the UK, the expansion of domestic demand has, in part, been debt-driven, although it has also, as in the Swedish case, been facilitated by rising real wages. Nevertheless, a key driver of rising real wages in the UK has also been productivity growth and the expansion of trade in high-end, ICT-intensive services. The chapter confirms that welfare state policies (including the protection of relative wages, public service provision, and, above all, strategies of skill formation) are critical to the outcomes observed in the context of deindustrialization and technological change. The development of sustainable strategies for growth and employment creation in a context of deindustrialization, and of revolutionary changes in ICT, rely on the creation of a capacity to expand into ICT-intensive, high value-added sectors, and especially in dynamic services sectors.
Firms and Public Service Provision in Russia
