The UK is currently experiencing an acute skills shortage. Professor Malcolm Todd, Provost (Academic) at the University of Derby, explains the importance of closing the skills and productivity gap and the role of universities in helping to address the issue.
In 1960, the UK had the highest level of productivity in Europe.1 The next 50 years saw the economy grow continuously, although at a slower rate than comparable countries across the world. Yet over the past decade, while the country has attempted to recover from the global financial crisis, productivity growth has been relatively flat.
Positively, in December, the Organisation for Economic Co-operation and Development revealed that the productivity gap between Britain and other advanced economies, such as the United States, Germany and France, was not as big as previously assumed.2
But according to the Office for National Statistics, in its latest release, productivity from July to September in 2018 grew a mere 0.2% higher compared with the same three months the previous year – the weakest rate of growth in productivity in two years.3.
On our doorstep, there is a huge challenge in closing the productivity gap of around 15% that exists between the Midlands and the UK average.4
And while the “productivity puzzle” continues to be solved, what very much exists is concern and worry.
The current critical productivity and skills gap can only be successfully addressed by providing high quality education to people across our region, by collaborating with organisations to ensure they are encouraging workers to take part in continuous professional development, and by working hard to identify the future needs of our key sectors. Without a doubt, skills are the key ingredient to growth.
The role of universities in closing the skills gap
The UK has a flexible labour market and, as universities are at the cutting-edge of research and innovation, higher education providers are imperative in helping to close the skills gap.
Fortunately, we have global firms such as Toyota, Rolls-Royce and Bombardier in the region, which have attracted key talent to the Midlands. However, we cannot ignore where the real future growth will be in our region – our SMEs.
Curriculums should be devised in partnership with key stakeholders to ensure that university programmes reflect the needs of our key growth industries. Universities can add value to the skills shortage by looking at the attributes of the workforce that are going to be relevant for the Fourth Industrial Revolution, known as the ‘Digital Revolution’.
However, it is much more than solely developing an appropriate curriculum. Universities should be working with stakeholders to assess students critically, provide real-world experience, live briefs, and work-based placements. Universities have to think more creatively about two-way secondments, as well as the development of spin-off companies, in order to gain knowledge exchange and appreciation of how skills truly develop.
It is crucial that our students become independent and autonomous learners who are prepared to constantly be reskilled throughout their careers. A learning point for our industries is their preparedness to think differently about their own workforce development needs.
Currently, the higher education sector faces huge uncertainty over funding. Nominal caps on student numbers could be re-introduced, which would have a huge impact on our social mobility agenda and the workforce pipeline for the region’s economy.
However, as an anchor institution in the region, it is our responsibility to support access to education at all levels, and at Derby we do that successfully by offering foundation programmes, degree apprenticeships, part-time courses and distance learning, in addition to traditional modes of study.
Opportunities for the region
While there are areas for development for the region in helping to close the skills gap, there is also a host of promising opportunities.
The growth of SMEs in the region, the potential impact of HS2, the Metro Strategy, and Midlands’ Regeneration agendas are all crucial.
However, we have got to be active as a region in providing quality education and skills opportunities. Our reputation is built on our ambition to develop graduate talent through high-quality teaching and learning, attracting businesses to work with us in line with their needs, and research and development.
The skills of the future are very different to the skills of today. Universities have a key role to play in helping to understand that complex dynamic economic landscape.
While there has, undoubtedly, been media attention over the value of universities and their civic responsibilities, the contribution we make to our regions in helping people access the right skills and addressing the nationwide skills shortage is significant.
1 The Financial Times https://www.ft.com/content/6ada0002-9a57-11e8-9702-5946bae86e6d
2 Sky News https://news.sky.com/story/britains-productivity-puzzle-bugs-economy-11602847
3 The Office for National Statistics https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/bulletins/labourproductivity/julytoseptember2018
3 Midlands Engine Strategy