Human Resource Development: National Embeddedness

In a commentary on Education across Europe, the OECD, acknowledged human capital as a major factor driving economic growth, both in the world’s most advanced economies and in those experiencing rapid development. This reflects a widely accepted recognition that an organisation’s ability to create and share knowledge is a critical determinant of competitive functioning and organisational capabilities around the world today. The landscape of national skills markets across developed countries (OECD, 2011) are evolving in response to a range of pressures arising from technological advances, migration patterns and national demographic change. In recognition of the scale of these changes and potential effects for the skills and knowledge base of labour markets we scrutinize the debates and evidence as a development to this book edition. Specifically, the chapter identifies the firm and institutional logics that have shaped human capital development within nations, but adds to this through a focus on changes in labour markets and the challenges these raise for individuals, firms and policy makers. We begin with a brief examination of the organisational logic underpinning investment in human resource knowledge and skills and use this as the foundation for exploring variation in national or geographic approaches to skills development. Beyond the organisational level, we review wider national systems as the fulcrum upon which variation in HRD systems and practices might be understood. Drawing upon the European institutional tradition where institutions are defined as the ‘building blocks for social order, both to govern and to legitimize behaviour (Bosch, Rubery, & Lehndorff, 2007:253; Streeck & Thelen, 2005), we review both the national business systems literature and the more specialised literature on national innovations systems to demonstrate their influence on the nature of firm level skills and learning. The chapter concludes with an examination of globalisation pressures and what these mean for the significance of national institutions in shaping firm level behaviour.