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The movement of many countries towards knowledge-based economic development requires the transition to more effective skill formation systems. This paper proposes an institutionalist approach to national skills development systems in the advancement towards knowledge-based economic development. There is currently no accepted general framework to analyze national skills development systems which has resulted in countries adopting reactive approaches to skills development problems. The conceptual framework advanced is an integrated, systemic view of national skills formation systems guided by government intervention in light of rampant failures of neo-liberal skills formation approaches that rely upon market mechanisms.
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