Introducing new process technology: Implications for local employment policies

Abstract

This paper reviews, in the context of local employment policy, some of the skills and training issues associated with the introduction of new process technology into traditional activities in the manufacturing sector. The introduction of such technologies into a locality's existing industries can enhance its competitiveness and the long-term future of its employment in manufacturing. A summary of the evidence showing spatial variations in the use of new process technologies suggests some areas have higher levels of new process technology than others, and the potential influence of labour market characteristics on these regional contrasts is examined. It is argued that increased competitiveness through new technologies may mean job loss in traditional industries but the scale of job losses from new technologies may have been exaggerated. The use of new technologies can be constrained by skill shortages but these may be overcome by corporate training strategies. Policy issues relate to the measurement of local demand for new-technology-related skills, the sources of labour for training (local/national), the barriers between demand and supply of skilled labour, and the dilemma (for some) that training of those in work offers a more useful route for new-technology skills than training the unemployed. By encouraging local firms to train their employees to operate the new technologies a region's competitiveness will be enhanced.