The Technology Strategy Board is an executive non-departmental public body established by the government in 2007 and sponsored by the Department for Business, Innovation, and Skills (BIS). It’s focused on stimulating technology-enabled innovation in the areas that offer the greatest scope for boosting UK growth and productivity.
The Technology Strategy Board recently published a report looking at trends and challenges in the UK manufacturing sector, an industry that accounts for approximately 15% of GDP and 50% of exports in the UK.
Its report states:
With the lowering of economic barriers to trade, the reduction in transport costs and the enabling effect of communications technology, manufacturing is highly competitive, where activity will gravitate to the countries of lowest overall cost.
Manufacturing in high-cost economies such as the UK has therefore had to change radically to remain globally competitive. This has resulted in changes to:
- The sectoral composition of manufacturing, away from the traditional areas and towards high-value, knowledge-intensive goods
- The emphasis of activities, away from just production and towards provision of lifetime service, around a manufactured product
- The business model, in terms of increasing specialisation and hence outsourcing of non-core activities
- Ownership, with the creation of large, global players, some of which are UK-owned
But what has all of this meant for jobs on the ground in the manufacturing sector? Does the data back up the Technology Strategy Board’s thinking? This article highlights some key trends taken from EMSI’s Analyst tool that explores jobs in the manufacturing industry in more detail.
High-Level Job Change in the Manufacturing Sector
Employment in the manufacturing sector has fallen by 14% in Great Britain over the last five years, a reduction of approximately 370,000 jobs. Projections suggest this downward trend is set to continue for the next five years, with a further drop of some 70,000 jobs forecasted between 2012 and 2017.
However, as the Technology Strategy Board indicates, this high-level view masks some interesting shifts within the detail of the manufacturing industry.
Job Change by Manufacturing Sub-Sector
When observing employment trends within the detail of the manufacturing industry, you can see that the patterns are less than uniform. A number of sections of the manufacturing sector are in fact showing growth, with the repair and installation of machinery and equipment leading the charge. Our nation’s reliance on fossil fuels is also driving growth amongst the manufacture of coke and refined petroleum products industry. At the other end of the scale, the manufacture of tobacco products shows significant declines as social and political change reduces demand for cigarettes and other smoking products.
Job Change by Education Level
The Technology Strategy Board report identified the need for the economy to shift from a focus on production and move towards a concentration on the service and knowledge side of the manufacturing sector to remain competitive in the global marketplace. This is very much borne out by the statistics of the typical education levels of jobs in the manufacturing sector. There has been a significant shift from jobs requiring low-level educational skills (levels 1 to 3), with a growth in demand for higher-level skills (level 4 and above).
In 2007, 85% of jobs in the manufacturing sector typically required level 3 or below educational attainment. However, the number of people employed in these jobs had fallen by almost 375,000 by 2012, and is projected to fall yet further. Over the 10-year period between 2007 and 2017, the total reduction in jobs in this low-level education category is projected to have fallen by almost half a million, while jobs typically requiring education at level 4 or above will in fact rise by over 20,000.
So, what do these trends mean for the jobs themselves? Which occupations will be driving growth in the high education knowledge and service end of the manufacturing industry?
It’s no surprise to see that engineering and management jobs lead the growth. And with the increase in global competition comes the need to invest in sales and marketing, while purchasing managers will ensure that efficiencies are maximised in a time where outsourcing is commonplace and business costs need to be kept to a minimum.
This is all food for thought when considering the training requirements amongst today’s student population to help meet the challenges presented by shifts in employment within Britain’s manufacturing sector.
How Do Trends Vary Across Britain?
In 2007, the North West and West Midlands led the way in jobs in the sector, accounting for over a quarter of all jobs in the manufacturing sector in Great Britain. Given the significance of the sector for employment in these regions you would expect to witness significant reductions in employment within these areas. This is certainly the case in the North West, where a fall in employment in the sector of over 70,000 (20%) is projected between 2007 and 2017. However, the West Midlands is not projected to be hit so hard, with a fall of only 10% (approximately 30,000 jobs), which is below the national average.
Neighbouring region, the East Midlands, bucks the trend and is forecasted to show slight growth in manufacturing jobs over the 10-year period — thanks in large part to significant growth between 2007 and 2012 in response to a number of investment projects across the region.
The largest declines are expected in Yorkshire and Humberside, with a projected decline of almost 80,000 jobs between 2007 and 2017. This is likely to be driven by the traditional high reliance on the low-end production segment of the manufacturing industry that the Technology Strategy Board highlights as at significant risk from international competition.
The analysis in this article clearly highlights the key shifts that are driving employment change in the manufacturing industry in Great Britain. For the nation’s manufacturing sector to rise from crippling job losses ,it must embrace new technology and once again take its place at the cutting edge of world manufacturing, and thus we need to ensure that today’s education system can provide the required skills for the workforce of tomorrow.
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