ABSTRACT
This chapter traces the emergence of a very different economy requiring very different skills. An analysis of the job and skill demands in the old and new economies must start with a definition of these economies. The system's main economic advantage in basic industries was its ability to achieve economies of scale with a combination of relatively high fixed capital costs, a few highly educated and skilled workers, and a heavy reliance on frontline workers who needed little more than basic literacy and numeracy. One of the most important skills required for indirect work is the ability to analyze the flood of data produced by information technology. In manufacturing systems, moreover, even the most sophisticated machines are idiosyncratic and therefore require the close attention of skilled workers to adapt them to particular situations. In large part, the skill training system contributed to an estimated production advantage for German manufacturing establishments of 52 percent in 1977 and 40 percent in 1987.
