Intellectual Skills and Competitive Strength: Is a radical change necessary?

This paper aims to analyse the character of workers' skills by making clear the processes by which their skills contribute to competitive strength. In orthodox economic analyses these skills have often been seen as a 'black box' which has remained unexplained. Utilising the Toyota survey that investigates nearly 30 production workshops, this paper reveals that intellectual skills dealing with uncertainty and change have played a central role in elevating efficiency. Two implications are developed. First, information technology does not reduce but rather elevates the importance of skill, since uncertainty cannot be handled by IT. This is disclosed in the analysis of workshops that are equipped with the IT. Second, the current chorus amongst some Japanese and overseas commentators who insist on the necessity for radical changes in employment systems turns out not to be persuasive, since they neglect the crucial role of intellectual skills in competitive production.