Government policies on skills and innovation will not create an economy capable of competing effectively in the global markets, according to a new report.

Robert Taylor, media fellow with the Economic and Social Research Council's Future of Work Programme, argues that only a more radical approach to workplace change will improve performance and raise labour productivity levels.

In High Road/Low Road - Skills and Innovation in Britain's Workplaces , he says: "The language of the government and industry about the importance of transforming the country into a high-skill information and knowledge economy may be inspirational, but the gap between its perceptions and the reality we face... remains very wide."

He says that no serious attempt has been made to relate the need to promote skills and innovation to the modernisation of companies and the way jobs are organised or restructured.

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"Too much of the present approach remains top-down, ad hoc and fragmented.

It is over-managerial in its tone and substance and concerned primarily with the implementation of supply-side external labour market measures.

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What is lacking is the development of a comprehensive skills and innovation strategy that is more in tune with the encouragement of workplace reorganisation and institutional change," Mr Taylor argues.

Peter Nolan, ESRC programme director, says that the emphasis on the production of low-skill and low-value products and services remains a powerful one.

"The barriers remain formidable to the construction of a vibrant, technologically advanced and knowledge-intensive workforce," Professor Nolan says.

The report says new forms of public intervention are required, including stronger support for businesses to provide high value-added goods and services through selective use of public-sector purchasing.

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