The entire basis of the Scottish Executive’s economic and educational policy came in for heavyweight academic criticism last week - and it could be good news for further education.

Speaking at the annual conference of the Association of Scottish Colleges, Paul Thompson, professor of organisational analysis at Strathclyde University, suggested the knowledge economy - by which Wendy Alexander, the Lifelong Learning Minister, sets much store - is a myth.

He said the majority of occupations are not knowledge-intensive, and the market simply treats knowledge as it does any other commodity, whose status is what matters.

Only around 10 per cent of job growth is in knowledge work, and 32 per cent of graduates are in jobs not requiring degree qualifications, Professor Thompson said. Even in middle-ranking jobs, work is predominantly driven by information handling and systems, with little emphasis on product knowledge or technical skills.

The largest single area of employment growth in Scotland between 1996-2006 is expected to be in sales jobs in the distribution, hotel and catering sectors.

The next biggest increase will be in personal and protective services. As a consequence, Professor Thompson said, it is not technical or even thinking skills which will be of increasing importance to employers but “person to person” skills. Hence most jobs cannot be high-skill and high-wage.

Professor Thompson suggested that FE, with its emphasis on basic skills and advanced technical knowledge, is uniquely placed to address the skills shortages in the contemporary economy.

But he criticised FE for having gone too far down the competency-based odularisation route of what he called “fragmented learning”. This has a negative impact on students, he claimed. They need more discursive skills if they are transferring to higher education.

Margaret Murray, head of the learning and skills policy group at the Confederation of British Industry, reinforced Professor Thompson’s message. The majority of employers were increasingly demanding transferable skills at all levels, particularly in communication and “working with others”. In this respect we need to close the skills gap between ourselves and our main competitors, she said. Ms Murray said one area where our competitors are ahead is in the 14 to 25-year-old cohort, where our thinking tends to be institutionalised, concentrating always on “bite sizes” of 14 to 16s or 16 to 19s.

International research has shown that 19 to 25-year-olds in France and Germany are ahead because they have the scope to retake examinations and try courses again. Young people see it as their democratic right to have such opportunities.

But sceptical individuals and employers still need convincing of the benefits of learning, Ms Murray added, and the message had to be spread by “champions” at local as well as at national level.

Employers, she said, also had to be convinced about the merits of FE colleges. The 1999 CBI employment trends survey revealed that private training providers were rated either excellent or good by 74 per cent of members. Higher education attracted a 58 per cent score in these categories, while FE managed only 38 per cent.

Ms Murray called for training needs to be met on a roll-onroll-off basis, both in terms of suitable timing and in tailored courses. Flexible colleges were the norm rather than the exception and she urged the colleges to aim at “delighting customers”.