The future of work – and what it means for the tertiary education system

It’s inevitable that tragedy and social upheaval capture public attention, squeezing out anything else, no matter how important. In 2011, the Welfare Working Group released its report – proposing seismic, ground-breaking changes for the benefit system – exactly 51 minutes before a truly seismic event, when the ground literally broke under the Christchurch CBD. 

And this year, on 31 March, while we were all thinking Covid-19 and about how we had coped during our first five days in the Level 4 lock down, the Productivity Commission released its far-reaching, important report Technological change and the future of work.

Now, as firms restructure in the face of the coming recession and as we listen daily to the litany of lay-offs and redundancies, the future of work is looking ominous for many New Zealanders.  While scant attention is paid to the Productivity Commission’s ideas.

With the prospect of significant, long-lasting shifts in the economy, there will be equally significant shifts in our labour market.  The Productivity Commission’s report looks at whether and how well New Zealand labour market policy is placed to respond to major change.  Yes, it was prepared in a pre-pandemic world, in response to changes in technology, rather than in health.  But it speaks to our current state, despite the difference in the cause. When the labour market is disrupted – whatever the cause – policy needs to support people to adjust to the new environment, to lift their skills if necessary, to enable them to move to new jobs in emerging areas, to access financial support while they are displaced. So, while this report may have had its origins in people’s anxiety about automation and artificial intelligence, it has plenty to say about the crisis we face now.

Of course, we can’t talk about labour market policy without looking at skills policy – and hence, the education system.  In this comment, I focus on only one aspect of the Commission’s report – its proposals for changes to the tertiary education system.

How does the tertiary education system respond to labour market disruption?

Despite the scale of the government’s recent fiscal stimulus measures, unemployment is rising now. 

My recent series of articles on the coming/current recession looked at how New Zealand’s tertiary education system responds to labour market disruption; when unemployment looms, tertiary education providers face increased domestic enrolments while industry training, which is pro-cyclical, loses trainees. 

We know that some students will stay on longer in institutions, waiting for opportunities to arise and extending their skills.  Work-based trainees who lose their jobs will also lose their training agreement and may seek to maintain the momentum of their training in a tertiary education provider.  And workers who lose their jobs may turn to tertiary education providers, looking to update, reorient or lift their skills while they wait out the recession.

And here is the theme of the Productivity Commission’s critique: our tertiary education policy is all but exclusively focused on young students taking full qualifications.  Naturally, the system has an obligation to give young people a set of transversal skills, a grounding that is best done through a coherent and integrated programme of study – a full qualification.  But in focusing exclusively on that role, the system doesn’t cater well for life-long learning, for adult students who seek to top-up, update or refocus their skills.  Or for displaced workers – whether displaced by AI or by the recession delivered to us by the pandemic.

The Productivity Commission’s proposals

The Commission wants the government to:

  • change the policies that block funding for adult students who don’t want to do a full qualification
  • allow people to use the Student Loan Scheme to pay the fees for smaller bursts of training.

The report praises the recent creation of micro-credentials, short courses focused on a coherent set of competencies.  But it criticises the limits on the funding of micro-credentials and complains that NZQA’s rules prevent learners from using a sequence of micro-credentials to contribute to a larger qualification – that bar the “stacking” of micro-credentials.

And they want the new reforms of vocational education to ease the restrictions on access to work-based training – beyond those who have paid employment.

My verdict? 

In these concerns, the Commission is echoing points I made in my 2018 article on life-long learning.  The package of recommendations in the Commission’s report makes great sense.  Not just because of the pandemic.  Nor just because of the advent of automation.  It makes sense because we will always depend on our human capital and we need to invest in the maintenance (not just the creation) of our human capital if we want to advance as an innovative and productive society

Why is our system so relentlessly focused on full qualifications for the young?

In the late 1990s/early 2000s, when tertiary funding was demand driven, institutions were incentivised to see anyone who could draw breath as a source of funding.  That led to a succession of low-value community education programmes (who remembers twilight golf?), and to qualifications designed to “harvest” EFTS and funding (who can recall the CoolIT scandal?).  New Zealand ended up with the second oldest student population in the OECD, as providers thought up ever more creative ways of expanding the market in response to weak quality assurance, demand-driven funding and the absence of incentives for performance.

Inevitably, the government had to squeeze the genie back into the bottle.  The result is the constraints that the Commission identifies as inhibiting and limiting life-long learning.

There has to be a better way.  There is – it is well described in this report.

These aren’t the only matters raised in the Productivity Commission’s report

The Commission also urges the government to improve careers information and support; to improve school performance to address declining core skills and achievement gaps; and to improve pathways into and through tertiary education by encouraging credit recognition and transfer.

And, of course, they discuss matters beyond the education system: changes to labour law, and investigation of a public unemployment insurance system to provide greater smoothing of income for displaced workers. 

Hear, hear!

And so …

The Productivity Commission has produced an insightful report. We can only hope the government is listening.


Productivity Commission (2020) Technological change and the future of work

Smyth R (2018) We need to talk about life-long learning, Education Central

A postscript:

I said that we have to hope that the government is listening.  One interesting point is that, as part of its very generous fiscal stimulus package in response to Covid-19, the government has offered a measure of income smoothing, similar in effect to that used in European countries and described in the PC’s report.  That, however, drew trenchant criticism from beneficiaries and their advocates.  It wins my award for the most dreadfully communicated aspect of the government’s pandemic response programme, a programme otherwise characterised by excellent communications.  

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