Future technological developments are likely to lead to the loss of a wide range of jobs due to computerisation and automation. There are two possible paths for New Zealand in the face of this change. The first, already evident in New Zealand, is widening inequality with the owners of capital and a small group of highly skilled people in high productivity, high pay jobs at one end while others are stuck in low pay, low skill jobs.
The second path is to respond with policies to maximize the proportion of the population in high skill, high productivity jobs. This requires three things: that people are equipped with the necessary skills for high productivity jobs; that there is sufficient demand to consume what is produced; and that there is a shift towards low emission sectors to ensure increased production does not cause environmental degradation.
This paper addresses the skills part of the equation, and considers the Danish experience with vocational education.
The Danish system of ‘flexicurity’ provides an example of how a country can help retrain its citizens in the face of job losses. Flexicurity has three components: flexible labour markets, generous benefits, and extensive active labour market policies - in particular education and training - to get people back to work.