Voices Manufacturers will take orders 24 with a challenge every time
FOR the majority of Scotland’s manufacturing sector, we are cautiously welcoming a recovery phase evidenced by an increase in projects getting a green light to go, meaningful enquiries to quote, and the only measure that really matters, actual orders that lead to cash in the bank. Hangover headaches still abound, with shortages in everything from paint to steel, plastics to shipping containers, but manufacturers will take the orders with a challenge every time rather than less challenges, no orders.
At the risk of trivialising the cost and resource pressures these shortages bring, is it fair to say that this too shall pass? Right now, the basic fundamentals of economic supply and demand have kicked in, increasing steel production along with everything else in demand to catch up to the capacity being pulled from industry, and whilst business would wish for a sooner arrival on supply and cost relief, it’s a fairly safe bet it will arrive.
An area that always needs a more active intervention however is skills. Before the pandemic, skills shortages, and the need to invest in new skills was the number one talking point and had been for some time. The trio of low historic training rates, an age profile centred above 50 and the loss of existing and future skilled resource resulting from Brexit left organisations constantly chasing the right resource to thrive.
Covid has only added to that challenge with significant redundancies across the sector as employers moved to protect the business in desperately tough times. Skills lost in this way were likely to be those closest to retirement, and experience suggests that we may be unlikely to see those return as industry picks up. Despite this, those who were able continued to invest in apprenticeships to ensure 67 per cent of engineering modern apprentice starts went ahead compared to the prior year, and employers also went out of their way to protect existing apprentices, working with each other to look for alternative employment across the sector for any made redundant.
Full marks for effort and tenacity then; but look ahead to a recovery from Covid focused on the pressing need to reach net zero and honestly, it’s not nearly enough, as every aspect of that challenge demands physical infrastructure intervention on a bewildering scale. If you read recently that electric vehicle ownership has entered the beginning of the exponential rise of the curve, consider then the physical installation task for charging infrastructure and then do the same for every aspect of our lives that currently carries a carbon impact.
The scale of the challenge brings enormous opportunities for engineering and manufacturing, and if we want to make sure that opportunity can bring benefit here in Scotland, a large part of the answer lies in increasing our work-based learning focus, specifically our foundation, modern and graduate apprenticeship programmes.
Work-based learning has multiple advantages for the employer and apprentice, but it’s particularly relevant against our current concern of the disproportionate impact on employment for young people that Covid has brought. As far back as 2014 it was highlighted that Switzerland achieved 64 per cent of school leavers moving into work-based learning programmes, and subsequently recorded a youth unemployment rate of 8%, exactly half of the average OECD youth unemployment rate at the time.
In 2019/20, Scotland had almost 4% of school leavers with a destination of training, around 16% entering employment including apprenticeships, and over 72% headed to further and higher education. 2017 statistics for Germany record that the calculated share of the resident population starting an apprenticeship was
52.9% and its 2021 youth unemployment rate sits at 6% as a result, less than half that of the UK and Scotland at over 13%.
I said before I believe apprenticeships are essential to enabling the level of activity we need to undertake to reach net zero, and if you agree that we face a sheer volume gap we must increase now bearing in mind that the delivery of trained and competent employees who start today is typically four years in the making. That focus on volume can be seen as an opportunity to level up in an area we have so far failed to improve, achieving a balance in any measure of diversity and, frankly, we can’t afford to carry on missing out on the full range of talent available in society.
Who carries the responsibility to create and fund these tens of thousands of apprenticeships? The answer to that has to be partnership working between industry, which has to create the capacity to deliver, and our governments, which need to incentivise the outcome that is essential to such a critical task.
I referred earlier to the phrase that this too shall pass, and it reminded me of another that I always liked: nothing lasts for ever, not even your troubles. In terms of troubles, I would be tempted to make an exception for skills, unless we do something about it.