Globalisation, Skill Formation and the Varieties of Capitalism Approach

Abstract

This paper is concerned to evaluate the varieties of capitalism approach to global institutional convergence and divergence as represented by the skill formation and welfare state theory of Margarita Estevez-Abe, Torben Iversen and David Soskice. They argue that the configuration of particular skills and labor markets distinctive of national economies can explain key aspects of welfare state provision. This paper makes the case that the generation and utilization of skills is fundamentally changing as a result of developments within multinational companies (MNCs). The empirical data with respect to the critique of Estevez-Abe et al's theory comes from a three-year study of MNCs' skill strategies. The study comprises 190 interviews with senior managers in 20 MNCs in three sectors -- electronics and information technology, automobiles and finance. Insofar as skill is related to strengthening working-class institutions and power, then the skills capture thesis suggests a weakening of such institutions and the influence they have on welfare state institutions.