Almost as certain as night follows day, the words skill and shortage are being heard in the same sentence with growing monotonous regularity. So, where do we start? Skills, jobs, incomes, jobs, migration, population, skills, spending, jobs, skills, investment, exports, profits, jobs, spending, imports, migration, skills, population … what comes first? Yes, where do we start?

·          shortage n. (often foll. by of) deficiency; lack.

·          skill n. (often foll. by in) ability to do something well; technique, expertise. [Old Norse, = difference]

Putting these together, there is something or some ability in which we have a deficiency or lack. Despite little argument that there is a shortage, it is curiously difficult to define precisely the thing or things in which we lack ability. To some it is management expertise, to others it’s the ability to sell and market themselves and their product/service. Innovation/design and/or the ability to translate research results into commercial products is highlighted in many quarters as the critical skill in short supply, but some others point to difficulties in reading and understanding the office health and safety manual. Then, there are the on-going recruitment and retention problems in the health industry. To others it is simply the inability to get carpenters and plumbers, builders and labourers when needed. Soon, who knows, it may be the turn of the proverbial butchers, bakers and candle-stick makers!

My question: is it really specific skills that are in short supply, or are the expressed concerns more a generalised reaction to the ‘tight’ labour market? With the official unemployment rate at a 16-year low and now well-below the 6% regarded not that many years ago as ‘full employment’, it is indeed unsurprising that some continue to view a tight labour market as a sign of distress. I prefer to view the glass as half-full because, under certain conditions, a skill shortage could be a good sign. That is, it can be a symptom of an expanding economy calling for and demanding even more skills, knowledge, and expertise so as to add to its capacity to continue growing.

If so, what’s the answer? An economist’s glib answer to a shortage is, of course, that the price should rise to equilibrate demand and supply. But yes, I know, this will negatively impact on our competitiveness and business profitability et al. Well then, the other suggestion is to reduce demand. And that’s basically the foundation for those saying that higher NZ interest rates are inevitable. But, again, that’s not an entirely ideal solution.

On the other hand, policy moves to equilibrate this market appear to be focussing on the supply-side. But, despite the promising numbers of those wishing to enrol in the variety of courses offered by the myriad of training providers, this avenue is going to take time unfortunately. By which time, I hear the cynics murmuring, we’ll need training in other different skills. So, how do we know where and for what should training courses and opportunities be provided?

The point? It is not at all helpful to view or attempt to tackle or rectify a skill shortage in isolation to the all else around us - or, the popular, ‘big picture’. Skill shortage problems should not and can not be fenced-off from the myriad of related issues facing New Zealand’s development. The silo approach to issues - where workforce development issues are put in one bucket, business development in another, regional development, in another, infrastructure investment in yet another and so on - risks missing the target.

But, what is the target? For argument’s sake lets take the components of the quadruple bottom line - social, economic, environment and cultural.

Not many would argue with the goals listed in the boxes, but I suspect many would disagree with the titles (or silos) that I have attached to each of them. If so, go ahead; shift all the titles around clockwise. But, the arrows remain the same! Each silo can not be separated from the others.

As an example, a couple of weeks ago, I was involved in two quite contrasting meetings.

Firstly, I attended a strategic direction-type meeting/discussion/presentation in an area essentially concerned with the impact of being too popular. The area was growing too fast, too many people wanting to live there, too much strain was being imposed on the local infrastructure and, of course, house prices were getting out of the reach of the ‘local’ population. I suspect there are several areas and district groupings around the country having similar discussions.

Secondly, that night I attended my local primary school’s Board of Trustees meeting - where the discussion/strategy revolved around concerns that a potentially falling roll may threaten the viability of the school.  Again, this is no doubt a common theme of concern for many primary schools as the Education Ministry’s ‘schools reviews’ continues.

What has either of these got to do with the quadruple bottom lines? Namely, the issue that transcends all four: the population base. If we are to tackle fundamental issues surrounding our future ‘development’ - across all four dimensions - then it would be useful to be clear about the population ‘footprint’ underlying the nation’s thinking (not to mention its planning and decision-making).

The environment we wish to enjoy, the social fabric and infrastructure we wish to foster, the range, breadth and depth of cultural diversity we wish to experience as well as the economic prosperity we wish to enjoy will all be significantly different in a year 2051 New Zealand of 4.8 million people than a New Zealand of, say, 6 million. In theory it goes by the name of economies of scale. To you and me it means it is sometimes easier to do things when there are more of you than if there is less - something to do with what is quaintly labelled fixed costs or overheads.

The 4.8 million figure is equivalent to Statistics New Zealand “medium fertility, medium-mortality and modest net migration”, demographic scenario. In this scenario only 11 of the nation’s 74 Territorial Local Authorities (TLAs) are expecting an increase in their population of under 15 year-olds. Thus, it is no surprise that many areas and Boards of Trustees are dreading their turn in the Education Ministry’s ‘school reviews’ process. But such a process undoubtedly has impacts across all four dimensions. So, is this population footprint the basis of our regional, business and economic and workforce development?

Workforce development issues (whether in response to a skill shortage or not) should be forward-looking. To be so, they need to be viewed as part and parcel of business, social, regional and national development - and all that those entail … major regional initiatives, centres of (research) excellence, sustainability, innovation, quadruple bottom line et al.

For the achievement of one goal, of necessity, requires other goals to be progressed in tandem.  And the footprint of the population base underlies all.