Our problem is not that we don�t have enough skills, but that we haven�t thought enough about where and how they should be used

Whatever your position on Scottish politics - and as an Englishman working in Wales I have no vote and no opinion - there is no doubt that the Scottish government has crossed into new territory with its policy document Skills For Scotland.

Skills is one of very few levers a government can pull on to boost the performance of the private sector, and here, as with its economic strategy in general, Scotland has taken a radically different turn from the more-of-the-same UK government.

To a disinterested academic observer this suggests a government with large and radical ambitions. Whether they are achievable or not is wide open for debate, but you must applaud its willingness to put cards on the table. They are saying "that's what we want" and asking "what do we have to do to get there?"

Those of us with a professional interest in seeing how policy levers can serve economic ambitions are paying close attention. Scotland's economic policy raises the bar for debate on the issue, and its skills strategy sets a new standard for the rest of the UK. My view is that Scotland has joined a small club of nations that are thinking in 21st-century terms about the skills issue.

It is well documented that the Scottish government aspires to emulate the economic performance of the "arc of prosperity" countries, mostly in Scandinavia. This has determined the "Wealthier and Fairer" emphasis of its economic strategy, which is aimed at reducing income inequality, and in this it departs from the more narrowly defined UK government policy of eradicating child poverty by 2020.

Saying in policy terms that "we want to be like Scandinavia" is radical in the UK, but it makes a lot of sense, as the population is broadly similar to that of the Nordic countries. In England, the government is not in the habit of saying what its model is, but insofar as it has one it seems to be the US. This is odd. The US is entirely different from us in terms of its scale and its history.

The Scandinavian example is particularly interesting in the context of skills, as these are countries that have a higher hourly labour productivity rate than the US, with its long-hours culture. The Nordics are world-leading economies with conspicuously high standards of living for the mass of their population that most other countries can only dream about. As a starting point for debate, the Scottish government's looking northwards for benchmarks of economic policy is of huge interest to objective observers.

Before we look at the new-style skills strategy that has emerged in Scotland, we would do well to remind ourselves what an old-style one looks like. We don't need to look very far. In my native England a clapped-out old model, born out of a Cold War mentality, is still considered roadworthy.

The Labour government's skills strategy, reinforced by the 2006 Leitch Report (see panel), is predicated on the assumption that Britain's best course of action over skills is to panic. Any government minister who talks about skills will unfailingly mention that China and India combined are now producing five million graduates a year, while the UK only manages 400,000. It follows, therefore that we must be losing the "skills race".

Prime Minister Gordon Brown's rhetoric on the subject has been grim. In what he described as "a wake-up call for young people, employees and employers" in January this year, he warned: "A generation ago, a British prime minister had to worry about the global arms race. Today, a British prime minister has to worry about a global skills race. We must summon ourselves to a new national effort and mobilisation to win the new skills race."

This metaphor is as bizarre as it is irritating, and the UK government should stop using it. More importantly, it is dangerously distracting from the task in hand.

Leaving aside the fact that the UK, with its 58 million population, produces three times as many graduates per head of population as India and China (combined populations 2.3 billion), there is something very wrong with the assumption that workers with skills qualifications are like inter-continental ballistic missiles (ICBMs), and that the country with the biggest stockpile of skills "wins" the productivity war.

There is, of course, no overarching global "skills race" to be won. Nor are the effects of spending towards winning that "race" easy to trace. We spend more, we achieve what?

Skills are not like ICBMs. They are only a threat when they are used. Having a huge stockpile of qualified people on its own makes little difference. If you look at Western countries that have high levels of graduates, such as Canada, their hourly productivity rate is not very impressive. Brown says we must match the proportion of graduates they have in Canada, but one hopes that all the effort to achieve that won't have the negligible economic effect it has had there.

As it is, Scotland has persistently spent proportionally more on education and training than England, and on paper has a more highly qualified workforce than is the average in England. The impact on productivity or earnings, however, is hard to spot.

Recent research has discovered the truly shocking fact that about a quarter of the Scottish workforce and a third of the Scottish female workforce is low-paid on EU definitions (earning less than two-thirds of the median wage). In Denmark the overall proportion of low-paid is about 8%. It is clear that against this legacy and background, "Wealthier and Fairer" will be far easier to say than to achieve. A new approach will also require the buy-in of all the "actors": public and private sector organisations, bosses, personnel specialists, trades unions, and colleges and universities.

"Skills" mean very little unless they are combined with product market strategies that require high skills levels, production systems that can use high skills levels, employee relations strategies that value skills, and work organisation and the "job design" that can deploy and adjust high skills to productive effect. If these instruments are missing, the skills that workers are furnished with are simply wasted.

The Scottish skills strategy, which has had a generally positive reception among Scottish business, comprises three elements: improving the supply of skills, boosting the underlying demand for skills, and improving the usage of skills once they has been created.

It sounds simple, but in UK terms it is a radical departure. It needs to be.

We have a problem with what is called "job design", or what people are actually required to do at work. Recent research by Alan Felstead for Futureskills Scotland, Scottish Enterprise's skills unit, finds that Scotland's workforce is actually highly qualified relative to much of its English equivalent. Unfortunately, there is a mismatch with the skills content of Scottish jobs, which may on average be lower-paid, and the gap with England may in fact be widening.

It is this mismatch that Skills for Scotland sets out to address, by developing new ways to help support firms in improving their work organisation and job design. The strategy attempts to improve skill use by developing new expertise among researchers, policy-makers and practitioners.

Scotland is not alone in this. Other countries have realised that upskilling - producing higher numbers of people with higher qualifications - is, in the classic phrase, "necessary but not sufficient".

Scandinavian countries realise this, as does Wales with its Workforce Development Programme. Countries can and should learn from each other, rather than be drawn into Brown's "skills race" rhetoric.

What the Scottish skills strategy does is to say we recognise that we have got problems about usage and demand, but there is no single solution to these problems, so we need to embark on a programme of exploration, developing a new generation of policy instruments to try to do things about this.

That is where the excitement is going to come over the next few years in Scotland. Bodies like Skills Development Scotland and the Scottish Funding Council are going to be sitting down and discussing precisely these issues.

What policy instruments might be on the table? There are some useful examples around. Scotland might be very interested in the workforce development programme that runs here in Wales. That is a good model for targeted interventions.

I expect to see Scots agencies exploring how publicly provided support can be developed for the kind of work reorganisation and job redesign programmes that are quite common in Scandinavia. All of the Scandinavian countries have programmes of publicly supported advice and consultancy. Organisations that think they have a problem on this front try to improve work organisation and job redesign.

The Finnish ministry of labour has for years been running a programme that looks at how to redesign jobs to ensure that older workers can remain in the workforce. This is an issue that Scotland is going to have to face.

How can we redesign jobs so older workers can feel happy about working? It seems a sensible thing to do. There is a long-standing tradition of these support services being available in Scandinavia. They have got all sorts of objectives, but the key one is boosting productivity and helping organisations to become more innovative and tap the creativity and skills of their workforce better.

You will find Scottish agencies exploring what will work in Scotland along those lines, what could replicate that kind of programme. That's going to be very interesting.

Much of the most interesting work on ending the mismatch has been conducted in Australia, where the National Centre for Vocational Education Research in Adelaide is basing policy thinking on the discovery that 37% of employers say that their workforce is overskilled for their positions, while only 5% lack sufficient skills.

The misalignment highlights the limitations of a "supply side only" approach to skills, and underlines how supplying skilled people into the labour market is only part of what is needed. Far more important is to make sure that the skills are directed where they are needed.

An even more exciting aspect of the new climate of thinking is the fact that answers to bigger questions about how a nation and an economy work best have at least come within reach as a result. Scotland now has an opportunity to consider the biggest questions, and the intellectual freedom to cast around freely for the best contemporary thinking.

Is vocational learning in Scotland too narrow and too shallow? What exactly are people learning to be, good workers or good citizens? The social success of Scandinavia is based on the heavy investment in learning to support citizenship, cultural, sporting and community activity. This may not be the stuff that Britain is especially comfortable with, but in the 21st century success will go to countries that don't just have smart workforces, but smart societies.

Here we have a lot of ground to make up. Take, for example, the different requirements for qualifying as a lorry driver in the UK and Germany. To drive a lorry in the UK you need a qualification called an N/SVQ 2, which is basically an HGV licence plus a health and safety requirement.

For the same post in Germany you are required to have a degree of knowledge in physics, German, logistics management, vehicle maintenance and a large component of what they call "citizenship learning". The assumption there is that workers have "careers" as citizens as well as being workers. Which regime provides an appropriate platform of learning for the 21st-century economy and society?

As someone who lives and works in Wales and England, I find it quite depressing that the UK media has had nothing to say about what is happening in Scotland, given the scale of ambition.

It would be well worth having a debate on whether the Scots approach to skills is better than ours, and whether or not we think it might succeed, and what that might mean for England. But I suspect that the last thing the UK government would like to do is to compare and contrast itself with a devolved government, simply because of the long-established belief in Whitehall and Westminster, mostly because of the weight of tradition and the assumption that England is the senior partner in the UK, that we know better how to do these things. In England It would be good if we did, but we don't.

Professor Ewart Keep is deputy director of the Oxford and Cardiff University-based ESRC Centre on Skills, Knowledge and Organisational Performance (SKOPE).

He is a member of the Scottish Funding Council skills committee and has advised the Scottish parliament's education, lifelong learning and culture committee