Study Skill shortages in the Pearson Edexcel A Level Business specification, including the knowledge, application and evaluation needed for exam questions and mark-scheme…
Sources for use with Extract E Half of businesses lose competitive advantage due to skills shortage In 2022, the World Economic Forum estimated that 150 million new technology jobs would be created globally by 2027 and that 77% of all jobs will require digital skills from workers by 2030. However, businesses currently face a global shortage of digital skills, with only 33% of technology jobs worldwide filled by the necessary skilled workers. In a recent survey of 500 businesses, 59% said that they lacked qualified individuals in digital skills and 54% said that they had lost their competitive advantage because of this. Extract F How South Korea is maintaining its competitive advantage South Korea has changed from a war-torn and poor nation to a global industrial powerhouse in just two generations. The country relied on US aid until the 1960s. It is now investing tens of billions of dollars in the US to build new electric vehicles, next-generation batteries, and semiconductors. South Korea has major challenges too. These include the demographic problem of having the world’s lowest fertility rate and being one of the planet’s fastest-ageing societies. It faces all-around economic competition from China, vulnerable supply chains, and much lower growth rates. If these were not enough, South Koreans also face a neighbouring country with an increasing arsenal of nuclear weapons and a growing Chinese military footprint nearby.
the advantages of inorganic growth for a global business such as Valio.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Skills shortages occur when employers cannot find enough workers with a particular skill
- In order to attract workers with those skills needed, such as in the
digital sector (Extract E), businesses may have to offer higher wages which inevitably increases costs
- If the price of the good or service is increased to maintain profitability,
domestic goods may lose a competitive advantage to cheaper foreign
substitutes
- It may not just be a case of cost, new industries that require new skills
may find it hard to recruit sufficient numbers of workers
- As a result output is restricted and may lag behind other countries which can be crucial in establishing a competitive advantage
- Without the right skills innovation and technological change can be restricted, once more reducing competitiveness
- This is particularly important in the digital sector, Extract E states that
54% of firms surveyed thought that they had lost competitive
advantage because of skills shortages
- However, the degree to which it limits international competitiveness
depends on the type of skill and how long the shortage lasts for
- A shortage of production line workers will be easier to overcome than a shortage of software engineers who will need much more training and time
- Governments can intervene with policies to improve the level and quantity of skills available in the labour force
- Extract F suggests that other problems may be just as important, if not
more so
- External factors such as exchange rates, the state of the economy and governmental laws and regulations can all affect competitiveness
- Korea has a problem with its birth rate as do many other advanced economies such as Finland (Extract A), Japan and Germany
- Low birth rates mean that the population will decline in the future,
creating a labour shortage for all types of work
- China has been a major contributing factor, its lower costs and relentless growth has outcompeted many industries in more advanced
economies
- Recent global events such as the global health crisis and conflict have
disrupted supply chains, increasing costs and damaging trade
- South Korea itself faces continuing problems with its northern neighbour which diverts scarce resources away from its economy
- Whilst skills shortages are not the only factor in determining the
competitiveness of a business, they are very important as the example of the technology sector shows
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-4
Isolated elements of knowledge and understanding.
Weak or no relevant application of business examples.
An argument may be attempted, but will be generic and fail to connect causes and/or consequences.
Level 2
5-8
Elements of knowledge and understanding, which are applied to the business example.
Arguments and chains of reasoning are presented but connections between causes and/or consequences are incomplete. Attempts to address the question.
A comparison or judgement may be attempted but it will not successfully show an awareness of the key features of business behaviour or business situation.
Level 3
9-14
Accurate knowledge and understanding, supported by relevant and effective use of the business behaviour/context.
Uses developed chains of reasoning, so that causes and/or consequences are complete, showing an understanding of the question.
Arguments are well developed.
Quantitative and/or qualitative information is introduced in an attempt to support judgements, a partial awareness of the validity and/or significance of competing arguments and may lead to a conclusion.
Level 4
15-20
Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
Uses well-developed and logical, coherent chains of reasoning, showing a range of causes and/or effect(s).
Arguments are fully developed.
Quantitative and/or qualitative information is/are used well to support judgements. A full awareness of the validity and significance of competing arguments/factors, leading to balanced comparisons, judgements and an effective conclusion that proposes a solution and/or recommendations.
Question
Evaluate the importance of place in the global marketing strategy of a business such as Starbucks. (20)
Indicative content