US seeks lessons in labour skills

The Internet will not be enough to bring the next wave of global development, says one of President Clinton's senior economic advisers.

The real key will be in transforming national labour forces and giving them the ability to exploit the new technologies - an area where the US is now looking to Europe for wisdom.

"The benefits of IT and the internet require a large skilled workforce capable of taking full advantage," said US under-secretary for economic affairs, Robert Shapiro, in London last week. "Fostering the social, economic and political environment for firms to operate in a global network will prove to be harder in some societies than others."

Shapiro started his fact-finding mission to the UK and Sweden with the surprise admission that the Old World still has something to teach the New. While the US leads the way in internet adoption, Shapiro admitted that it could look to Europe for lessons on preparing people for the technology-driven future.

"We know we can teach computer literacy in schools. But the workforce is out of school. One thing we can learn from the UK is the way you deal with people."

"We are trying to train people to computer literate," he said. "We can't do that fast enough, which is why we are importing 80,000 programmers a year, mostly from India."

Shapiro also praised Scandinavia's education system and culture. "In Sweden they have long-term support for research and development, a highly scientific workforce and a strong entrepreneurial spirit," he said.

He also highlighted the ongoing debate as to how to measure the impact of IT on global competitiveness. Last month, the US economy entered its 108th consecutive month of economic growth, and at least 40 per cent of the US economy's growth last century was due to "innovation in its various aspects", he added.

There is no method of measuring the exact contribution of IT, however. "I have no doubt that IT has boosted US productivity and growth. But I cannot say by how much," he said.

US IT companies accounted for eight per cent of the country's GDP between 1995 and 1998. From 1990 to 1997, productivity per worker grew 2.4 per cent in industries that had invested in IT, compared with only 1.3 per cent in their less IT-aware rivals.

Yet even with such data, Shapiro said it is still too early to determine whether or not IT is "creating a New Economy for advanced countries of high growth and productivity and low inflation and unemployment".