We began the first part of this piece by citing Dame Julia Goodfellow’s speech at the recent Universities UK Annual Members’ Conference, in which she said that universities are “committed to raising productivity” and are “at the heart of a strong, modern and innovative knowledge economy”. We then picked up on a comment by Professor Ewart Keep, in a piece he wrote for HEFCE, in which he claimed that it would be a mistake to assume that the skills gaps in the labour market are all in the higher skills occupations. There is, he said, massive volumes of very real employer need at Level 2 and below, and these can’t be neglected in any discussions of skills and productivity.
Taking our cue from this point, we first used our data to show how Professor Keep is right to point to the huge Level 2 demand out there, before going on to make the following points:
1. Those looking to boost productivity in the “knowledge economy” need to start by “knowing the economy” better
2. This means that skills policy must be based on hard, objective data, rather than assumptions
3. For universities to really impact on productivity in the “knowledge economy”, they really need to get to grips with what the specific needs are, especially in their region
In this piece and then in the final part, we want to pick up on Professor Keep’s other point, which he expressed in the following way:
“‘Fixing the Foundations’ does not move beyond the well-established UK government policy position that our skills problem is primarily one of inadequate supply. Fix this, the argument goes, and enhanced productivity will follow more or less automatically. Elsewhere in the developed world, including within the OECD’s own thinking, the definition of the problem has moved on, and there is now a recognition that policy has to also seek to stimulate demand for a more highly skilled workforce, and to help employers to think through how they can deploy those skills more productively within the workplace.”
We can split this into two parts, the first relating to inadequate supply, which we’ll deal with in this piece and the second relating to stimulating demand, which we’ll tackle in the final part.
As Professor Keep says, “fixing” inadequate supply is often portrayed as an automatic solution to the skills and productivity problem, but this is not the case. We also need to look at stimulating demand. Whilst we would agree with this, we would add that it is necessary to look a bit more closely at the term “inadequate supply” itself, as it is something that is often treated rather loosely. For instance, when the Government and business groups argue about inadequate supply, they often fail to diagnose the precise nature of what that inadequate supply really is and, as we pointed out in Part 1, can tend to use assumptions as a substitute for hard data.
In order to know how much supply is adequate or inadequate, you of course first need to know what the demand is. Which is where data is an invaluable tool. This can be illustrated neatly by looking at a skills area that often comes up in these kinds of conversation – engineering. Back in June this year, an article in The Independent reported the following claims by the Royal Academy of Engineering about the shortfall of qualified engineers and technicians:
“Analysis by the Royal Academy of Engineering suggests we will need more than a million new engineers and technicians by 2020 . This will require a doubling of the current number of annual engineering graduates and apprentices.”
The basic argument here is the “inadequate supply” argument, and that in order to meet demand the numbers of people being trained as engineers and technicians needs to rise dramatically, to the tune of over a million by 2020.
But several questions arise from this assessment. Firstly, does the claim of more than a million new engineers and technicians over the next five years really stack up? According to our forecasts, which are based on past and current trends, this looks like being a hugely inflated figure. Looking at all the occupation categories for engineers and technicians we find that there are likely to be around 241,330 openings over the next five years (we are including things like Vehicle paint technicians in this definition and so are being fairly broad in the way we are defining engineers and technicians). Needless to say, this is a far cry from over a million and so it could be that in training the sorts of numbers mentioned by the Royal Academy of Engineers, far from solving a problem, we could end up causing many more.
Secondly, stating that we need x number of engineers and technicians is one thing, but which engineers and technicians do we actually need? To illustrate the point, let’s look at those engineering jobs that fall specifically within the Engineering Professionals category (SOC 212). There we find that there are seven specific engineering occupations (all at Level 6), many of which require different skill sets. The following graph shows the forecasted demand (in terms of total openings) for each category across Britain over the next five years. As you can see, demand is by no means uniform, indicating that any policy tackling shortages needs to be far more nuanced than simply saying we need x number of engineers and technicians:
And lastly, whilst understanding general demand across the country is important, even more vital for universities looking to respond to demand with “adequate supply” is what is going on at their local and regional level. For instance, using the Engineering Professionals category again, we can delve down into the data to look at demand in specific LEP regions, in this case Coast 2 Capital, Enterprise M3 and Heart of the South West:
What is clear from this graph is that whilst universities operating within different LEP regions may sometimes face fairly similar demand (e.g. demand for Electrical engineers is fairly similar across these three regions), often the demands will be very different (e.g. the demand for Civil engineers is almost three times greater in the Enterprise M3 region than in Heart of the South West). For those universities that are looking to really bolster productivity within local and regional industries, drilling down to this level of data is therefore crucial if they are to respond to the demands of the “knowledge economy” with adequate supply.
In the final part of this piece, we will look at Professor Keep’s comments about stimulating demand, asking whether data can play any part in achieving this.
Please contact Jamie Mackay (email@example.com) to discuss how our data can help your university increase its impact on regional productivity.