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Unit 2 Macro: Skills Shortages Hold Back Recovery

Thursday, April 12, 2012
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Here is a superb news report from Channel 4 news about the shortage of skilled workers in the North East of England (an area of high unemployment). Nissan this week announced a big new investment in car making at their ultra-high productivity plant in Washington, Tyne and Wear. But many of the manufacturers along Nissan’s supply chain are finding it tough to get enough skilled people coming througth to make realistic bid for the orders that will come from Nissa. Some businesses are having to turn down contracts because they dont have the extra workforce to cope with the higher volumes of businesses.

Skills shortages are restricting the growth of many small and medium sized businesses especially in manufacturing. Little wonder that Nissan is working very closely with Gateshead College to run an apprenticeship scheme - an example of external economies of scale in action.

Key terms

Occupational immobility
Skills shortages
Skills gap
Human capital
Structural unemployment
Manufacturing
Capacity
Labour demand
Labour supply
Supply chain
Multiplier effect
Productivity

 



 

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