In her recent address to the Universities UK Annual Members’ Conference, the organisation’s President, Dame Julia Goodfellow, set the scene for the rest of her speech by first noting some of the many ways in which universities benefit communities, society and the nation:
- Transforming people’s lives through access to higher education
- Transforming our nations’ economy through research and innovation
- Transforming our society through the impact of our research
- Transforming our local communities through our interactions both economic and cultural
Along with the cultural and social elements in this list, economic impact is clearly at the forefront of Dame Julia’s portrayal of the sector, and she went on to make the case that universities are economic hubs, contributing massively to local, regional and ultimately the national economy. She also made it clear that the university sector is committed to what she called “the Government’s clear vision to transform the British economy by increasing productivity,” and set out her vision of what this looks like in practice:
“A strong, high quality and diverse university sector should be at the heart of a strong, modern and innovative knowledge economy whether through the education of graduates needed by our successful businesses or through the innovation that comes from our research.”
Perhaps the key phrase from this statement is “knowledge economy”. It is a phrase that is used much to describe our economy today, but a couple of questions arise. Firstly, how well do we know what the needs of the “knowledge economy” actually are? Secondly, if we are aiming to drive up productivity in this economy, aren’t we likely to go astray if we rely on assumptions rather than hard data to tell us what is needed to fix the skills shortages?
In a recent piece for HEFCE, Finding the skills to fix the foundations, Professor Ewart Keep, Director for the Centre on Skills, Knowledge & Organisational Performance at Oxford University, made a couple of pertinent points which I’d like to focus on for the rest of this piece and Part 2. His first was to argue that although skills are central to boosting productivity, skills policies must avoid making unwarranted assumptions that higher skills are all that is needed:
“In the real world, Level 2 provision in both apprenticeships but also in further education colleges (pre and post-19) is unlikely to diminish any time soon, as it reflects massive volumes of very real employer need. Many service sector organisations and occupations currently specify skill needs at Level 2, and this will remain the case for the foreseeable future… In other words, large chunks of our economy currently require a Level 2 (and below) workforce.”
He is right, and this can be illustrated neatly by looking at our forecast for the top ten growth occupations over the next three years. As you can see, the biggest needs are at Level 2:
Professor Keep’s point reinforces a message we have been making for some time, which is that skills policies should not be based on whatever is fashionable or what we might assume to be the needs of the labour market. Rather, we need to look at hard data, and forecasts which are based on hard data, in order to inform us objectively what employer demand looks like. What we find when we do that is that the figures do not necessarily back up the commonly held idea that the most pressing areas of demand are in the higher skill areas.
Having said this, there are clearly great needs in the higher level skills, often in occupations we would normally associate with the “knowledge economy”. But if universities are to really have an increased impact on economic productivity, they need to know what these skills needs actually are. This is where good labour market data is essential, since it gives universities the ability to unpick the real skills needs, so that they can then react appropriately.
Furthermore, because most students end up finding employment in the area in which they studied (see our article on this here), by using data specific to the region they serve, universities can unpick the skills needs specific to their region, so putting themselves in a better position to be able to supply industries in that region with graduates who have the right skills.
In summary, if universities are to make good on their commitment to “transform the British economy by increasing productivity”, steering clear of making assumptions about what that “knowledge economy” needs is essential. Big increases in productivity will only come about when universities first gain a detailed knowledge of the real needs of the “knowledge economy” in their area.
In the second part of this piece, we will focus on the second argument made by Professor Keep, which was that “fixing” the inadequate supply of skilled graduates is far from being a guaranteed way to enhance productivity.
Please contact Jamie Mackay (email@example.com) to discuss how our data can help your university increase its impact on regional productivity