ABSTRACT
The game consists of three players, representing the three main investors in education and training (ET): individuals who have completed compulsory schooling, company managers and government policymakers. The 'rational actor' perspective offers an alternative to explanations of economic decline that place the blame on education and training. The player in a position to ensure that the sum total of individuals' investment in their own skills does not add up to a societally suboptimal level of ET is the government policymaker. The most critical player in the game, however, is the company manager, who faces a difficult choice between high- and low-skill routes. The cumulative effect of such small improvements enables high-skill firms both to respond more efficiently to external shifts and, more importantly, to take an active role in shaping the markets where they compete. The ability of lower-level managers to adopt a long-term timeframe toward investment in skills will depend on the nature of the institutional incentives they face.
