Why investment in skills is vital to economic growth
Skills must be at the heart of the Welsh Government’s Economic Action Plan in order to ensure the future proofing of Wales’ workforce, says Iestyn Davies
As the end of the summer term approaches, it’s the time of year when people often reflect on the academic year past and start to think about what they want from the academic year ahead.
At ColegauCymru, we’re clear that one of the major developments that we would like to see in 2018 is investment in a skills strategy to support sustainable local, regional and national economic growth. As the post compulsory education charity, we welcomed the publication of the Welsh Government’s Economic Action Plan (Prosperity for All: economic action plan) during this last year. ColegauCymru was also pleased to see the refocusing of Welsh Government strategy on national priorities, reinforced by a clear message on the need to engage with the foundational economy in areas such as tourism, retail, food and care.
Investment in the economy and the fulfilment of economic growth can only be achieved by people. People are the “human capital” required by business to succeed. Further education colleges and institutions already work in supporting skills development in all priority sectors.
However, the situation of providing for the skills needs of businesses across Wales remains challenging. A recent Wales Audit Office report showed that essential funding for skills has fallen in real terms whilst the cost of delivering skills and training has increased. A Welsh Government strategy with clear national priorities would be a welcome development and should also provide a chance to address the funding imbalance between levels of vocational and academic learning because we’re all keen to see investment in opportunities to create a sustainable nation of skilled workers.
As funds and support flows to businesses to help them grow and meet the challenge of increased productivity, the Welsh Government calling for a renewed social contract between all sectors in Wales is a positive development. There is evidence that this already exists in some places and offers a good foundation for further collaboration as we all seek to create resilient economies across the nation. We would continue to suggest that the parts of the world with the best link between the world of skills provision and the world of work are where there is a statutory partnership built on years of mutual support and assistance.
Based on our current partnerships, the curriculum offer in FE is continuing to adapt to the needs of business. To help understand how these needs are changing, we recently undertook European-Commission-funded research with small businesses in the hospitality, retail and tourism sectors on the skills set needed now and in the future. Ongoing engagement between skills providers and small businesses is essential as people can see from the recommendations in our published report “Gammon, egg and chips in a pub night after night”. The many changing factors contributing to these industries include the further expansion of internet shopping, online booking of accommodation and the rise of travel and experience review sites like TripAdvisor.
One particular stand-out finding was the need to address recruitment in relation to retention – both the ambition and creativity of talented chefs and the perceived restrictions imposed on them from working in specific locations and markets, the call for “pub grub” rather than Michelin standard. There is often a gap between the skills businesses currently demand and the training available to them – this doesn’t always mean that the skills levels are too low, in fact, the report points out that they could sometimes be too high. Sometimes the missing skills needs are within business leadership in places such as marketing and business management not necessarily within a specific vocational area.
The way we work is changing rapidly and no-one knows for sure what the jobs of the future will look like. That is why, in Wales, Further Education colleges and work-based learning providers are concentrating on building confident, capable and resilient learners that can adapt to future challenges, whatever they may look like.
There is no doubt that automation will present a challenge over the years ahead. A McKinsey & Company study indicates that about 30% of tasks in 60% of occupations could be computerised while the Bank of England’s chief economist states that 80 million US and 15 million UK jobs may be replaced by robots. And whether jobs in Wales risk becoming obsolete or simply change in nature, the challenge is always to ensure people have access to the skills they need to adapt to the conditions we face.
We need to prepare for automation rather than ignore it. The Welsh Government Economic Action Plan looks at areas where we can enhance economic performance through increasing productivity. Like the UK, Wales has suffered a decline in traditional industry and manufacturing but largely retains its “foundational economy”. Exploiting innovation and technology and skills which are largely technical and vocational are a key focus, but we must not lose sight of the foundational economy of goods and services that are needed by people across Wales and which are the bedrock of society.
Whilst unemployment has decreased the number of people who aren’t able to participate in the workplace has remained stubborn. To impact in this policy area, we eagerly await the announcement of the Welsh Government’s Employability Strategy.
Employability is about collaboration, all aspects of education, health, housing, transport, childcare and regional development working together to support people into sustainable employment. The eagerly awaited Employability Delivery Plan will be positioned as a single employability offer – “Working Wales” – and will be underpinned by a new programme for adults, along with two new programmes that will deliver employability support to young people. The commitment to prosperity for all must ensure all those in work benefit from the economic growth planned for Wales.
Be it in providing key vocational skills, supporting business growth or addressing long-term unemployment, Wales Further Education colleges make an enormous contribution to economic prosperity across Wales.
With the economic benefit to Wales of FE colleges estimated at £4bn a year, the Further Education sector is creating a high level of return on investment and delivering for learners, tax payers and the economy. Further education colleges and institutions are integral partners in the ambition for delivering prosperity for all.
What is needed now is further Welsh Government funding commitment to support the development of higher level technical skills that cannot be replaced by robots by renewing the focus on Technical and Vocational Education and Training (TVET.) It is unquestionable that skills must be at the heart of the Welsh Government’s Economic Action Plan in order to ensure the future proofing of Wales’ workforce. Some tough but informed decisions need to be made in these times of economic austerity, not only by Welsh Government, but by Westminster too.