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The quality of the workforce as a key factor of Ukraine's innovative development

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  • Y. Yuryk, V. Blyzniuk

Abstract

Recently, in Ukraine, the commodity component of the economy has been growing against the background of a decrease in the innovative components of growth. Analyzing the indicators of Ukraine's competitiveness, we note that human capital does not meet the requirements of the innovation based model of economic development. This is the reason for the low competitiveness of domestic labor. The employment structure formed in Ukrainian economy during the transformation period is not optimal. It still does not meet the requirements of postindustrial society but, on the contrary contributes to the deindustrialization of labor. An analysis of occupational employment in Ukraine allows identifying the industries with a still strong demand for low-skilled labor. The leaders here are agriculture and light industry, and the enterprises producing food and transport and communications. The authors have proven that the parameters of Ukraine's labor do not meet the requirements to ensure the competitiveness of the domestic workforce and innovative modernization of the economy.A feature of Ukrainian labor market is that employment does not depend on changes in output, which shows itself in the average coefficient of elasticity of employment changes to changes in GDP. In order to maintain stable employment in the Ukrainian labor market, employers are using, as adaptive tools, the hours of work and wages (in the form of payment arrears and wage freezing). We believe that the corresponding regulating practice does not create opportunities for effective employment restructuring, enhancing productivity and quality of work in the long run. The analysis allows us to provide a prospective evaluation of possible changes in the employment as regards professions and skills. In this paper, the authors have made a forecast on the baseline scenario in which the current trends hold. By the end of the forecast period, we can expect some increase in the share of employment in all sectors except agriculture and industry. In general, as expected, there will remain a significant share of employment in the material production, and, as regards the non-production sphere, here most labor will be employed in trade. A strong demand for low-skilled labor requiring no high educational level will be expected in the forecast period.Growth will hold in the shares of the employed in trade and services, professionals, lawyers, executives and managers. On the contrary, the share of skilled workers will. This demonstrates an aggravated distortion in the occupational structure of the employment and its decoupling with the innovation model of economic development. It is necessary to introduce a selective policy aimed at stimulating the progressive change in the social and labor issues due to the innovative element of employment are in certain regions and sectors. The main criterion for the implementation of innovation is to create an effective, economic job. Especially labor market needs training programs corresponding to the priorities of economic development, new sectors and forms of employment.

Suggested Citation

  • Y. Yuryk, V. Blyzniuk, 2014. "The quality of the workforce as a key factor of Ukraine's innovative development," Economy and Forecasting, Valeriy Heyets, issue 1, pages 67-86.
  • Handle: RePEc:eip:journl:y:2014:i:1:p:67-86
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