Learning and innovation in the knowledge-based economy: beyond clusters and qualifications

For over a decade policy-makers have claimed that advanced industrial societies should develop a knowledge-based economy (KBE) in response to economic globalisation and the transfer of manufacturing jobs to lower cost countries. In the UK, this vision shaped New Labour's policies for vocational education and training (VET), higher education and skills, and it continues to be influential. Learning for the KBE, according to policy-makers' claims, requires individuals to acquire measurable knowledge or skills in the form of qualifications through formal education and training, which will allegedly improve national economic competitiveness and productivity. This paper argues that quite different conceptualisations of learning for the KBE can be drawn from the fields of economic geography and regional studies; in particular, the 'cluster' literature, which analyses the processes which underpin innovation and learning in regional agglomerations of economic activity. The paper argues that the cluster literature can and should be used to open up a debate about the nature, scale and location of the learning processes that support the KBE; the implications of which have not yet been fully appreciated in the fields of VET and skills policy. Moreover, when these insights are combined with those from social theories of learning, a more holistic understanding of how innovation occurs emerges. The paper concludes with some recommendations for the Coalition Government as it develops policies to rebalance and grow the UK economy, and suggests that these recommendations may also be relevant for other countries facing similar challenges.