The UK Labour Market

1
The UK Labour Market
Marchmont Observatory

• Dr Andrew Dean
• Marchmont Observatory
• University of Exeter
• St. Lukes Campus
• Exeter, EX1 2LU
• a.dean_at_exeter.ac.uk

www.marchmont.ac.uk
2
The UK Labour Market
Marchmont Observatory

• Levelling the economic playing field
• Order drive-through food in Missouri via Colorado
• Have your tax return completed in Bangalore
• Japanese houses designed in China every day
• Dalian, China (popn. 5m) annually produces 50 of
  graduate scientists and engineers of UK (popn.
  60m)
• US share of papers in Physical Review fallen from
  61 in 1983 to 29 in 2003
• The Dell Theory No two countries in the same
  global supply chain fight each other

• Ten levers of change
• Berlin Wall/Windows 3 (1989)
• The Internet (1995)
• Workflow systems (1997-)
• Outsourcing
• Off-shoring
• Open-sourcing
• Insourcing
• Supply-chaining
• Informing/Web search (2000)
• Wireless/VOIP (2000-)

• Three gaps (US)
• Ambition
• Science / engineering / innovation
• Skills

Source Thomas Friedman, The World is Flat, New
York Times, 3 April 2005
www.marchmont.ac.uk
3
The UK Labour Market
Marchmont Observatory
International Comparisons of ProductivityGDP per
Worker 2002
www.marchmont.ac.uk
4
The UK Labour Market
Marchmont Observatory
www.marchmont.ac.uk
5
The UK Labour Market
Marchmont Observatory
Source Barnes and Haskel, 2000, in Developing
Workforce Skills, HM Treasury, 2002
www.marchmont.ac.uk
6
The UK Labour Market
Marchmont Observatory
www.marchmont.ac.uk
7
The UK Labour Market
Marchmont Observatory
www.marchmont.ac.uk
8
The UK Labour Market
Marchmont Observatory
www.marchmont.ac.uk
9
The UK Labour Market
Marchmont Observatory

• Industry data is weak for planning because
• it does not take account of gearing,
  out-sourcing, etc.
• it no longer reflects the evolving structure of
  industry
• It no longer reflects the multinational nature of
  companies
• Occupational data is weak for planning because
• it does not recognise the fuzzying of
  occupations
• it measures job numbers, not job value or
  earnings
• it does no longer correlates well with skill sets
  or levels
• it does not understand or reflect labour supply

www.marchmont.ac.uk
10
The UK Labour Market
Marchmont Observatory
13,504
Source SSDA, Working Futures National Report
2003-04, IER, 2004
www.marchmont.ac.uk
11
The UK Labour Market
Marchmont Observatory
Source Skills in the Global Economy, HM
Treasury, 2005, p11, derived from Labour Force
Survey, Winter 2003
www.marchmont.ac.uk
12
The UK Labour Market
Marchmont Observatory
Source Education and Skills The Economic
Benefits, UK DfES, 2003, p17
www.marchmont.ac.uk
13
The UK Labour Market
Marchmont Observatory
Company training
Individual learning
Source UK Labour Force Survey, Spring 2003
Education and Skills The Economic Benefits, UK
DfES, 2003, p17
www.marchmont.ac.uk
14
The UK Labour Market
Marchmont Observatory
UK skills shortages by occupation - 2003
Source LSC National Employer Skills Survey 2003,
IFF/IER
www.marchmont.ac.uk
15
The UK Labour Market
Marchmont Observatory
Particular skills in short supply 2003
Source LSC National Employer Skills Survey 2003,
IFF/IER
www.marchmont.ac.uk
16
The UK Labour Market
Marchmont Observatory

• What do employers really need?
• The capacity to apply acquired knowledge and
  skills in resolving real-world challenges in the
  work-place
• Academic and vocational divide is real in many
  countries
• South Korea et al 70 graduate rate is this
  sound?

• Why do nations primarily benchmark their
  education and training systems by school and
  university level outcomes only?

www.marchmont.ac.uk
17
The UK Labour Market
Marchmont Observatory
Whats the real need for graduates?

• Graduate demand in the UK is significantly
  exaggerated
• 80 of all new UK jobs to 2010 will require Level
  3 or higher
• 55 of new UK jobs, 29 of all jobs, will be at
  Level 4 by 2010
• 25 of new jobs will require Bachelors Degree by
  2010
• Replacement jobs at same level will outnumber new
  jobs by 51

Graph source Hecker, DE Occupational Employment
Projections to 2010, Monthly Labour Review, US
Dept of Labour, November 2001
www.marchmont.ac.uk
18
The UK Labour Market
Marchmont Observatory
Implications for the labour force

• Youth cohort is declining a global trend
• Key/generic/employability skills an increasing
  issue
• Skills levels required in employment are rising
  overall
• Intermediate vocational skills the biggest
  challenge
• Currency of knowledge and skills is shortening
• Requirement for more adult workers, and to work
  longer
• Need to up-skill or re-skill 5 to 10 times in
  working life
• Individuals compete (globally) on attitude and
  skills

www.marchmont.ac.uk
19
The UK Labour Market
Where does the UK population work?
Marchmont Observatory
Source DTI/SBS, SME Statistics 2003, published
December 2004 (not including 2.9 million
self-employed)
www.marchmont.ac.uk
20
The UK Labour Market
Marchmont Observatory
Implications for nations

• School systems must serve 100 of youth
• Redress adult literacy and numeracy issues
• Prioritise/invest in vocational and academic
  education
• Grow proportion of workforce gaining upskilling
  SMEs?
• Create a balanced lifelong learning nation and
  system
• Persuade/incentivise adults to (re-)engage in
  learning
• Address the who pays problem tripartite
  responsibility
• Nations compete on their education system

www.marchmont.ac.uk
21
The UK Labour Market
Marchmont Observatory

• Summary
• Unemployment at record low levels
• Perceived decline in manufacturing (but is this
  accurate)
• Tight labour market restricting growth (skills
  shortages and skills vacancies)
• High employment rates (inc. females and
  part-time)
• Un-regulated labour market
• Worst in Craft and Trade skills
• Migrant workers filling low level and highly
  skilled vacancies
• Failure of current system to provide training at
  work and CPD for those not in management
  positions
• Focus now on moving from level 1 to level 2

www.marchmont.ac.uk
22
Why the need for High Road?
Marchmont Observatory

• UK Labour Market suffers from
• Continuing narrow-minded academic bias and
  elitism
• Failure to engage with adults and lifelong
  learning
• Industries and companies poaching rather than
  training
• Lack of portability of skills and qualifications
• Asset poaching immigration to developed
  countries
• Conflict between national goals and global vision

www.marchmont.ac.uk
23
The solutions are
Marchmont Observatory

• Accountability State, employer learner (now
  also Trade Unions)
• Young people an education system for the 100
• Adults Promotion, IAG, access, basic skills,
  funding, support
• Employers Business and competitive strategy,
  engagement
• Research Competitiveness, business strategy, and
  skills
• Informing demand Labour market information poor
  inaccessible
• Education system Fitness, responsiveness,
  industry links etc.
• Funding Who pays, how much and for what?
• Policy Evidence based? Or politics driven?

www.marchmont.ac.uk
24
High Road Project
Marchmont Observatory
Aim This project has as its aim, a contribution
towards actions which provide opportunity for all
to secure, retain and progress in rewarding
employment by improving learning pathways.
www.marchmont.ac.uk
25
High Road Project
Marchmont Observatory
To develop information services, briefing and
training materials To develop better links
between pre-entry and in work learning Developing
a Union Academy which will bring together
guidance and learning services for workplace
learners
www.marchmont.ac.uk
26
High Road Project
Marchmont Observatory
TUC,STUC,WTUC Ufi,CfL Scarman Trust, TAEN,
NIACE National LSC, DfES
www.marchmont.ac.uk
27
High Road Project
Marchmont Observatory
Timescale Action 1- October 2004 Action 2 - May
2005 June 2007 Action 3 Jan 2006 December
2007
www.marchmont.ac.uk
28
High Road Project
Marchmont Observatory
Activity so far Action 2 plan developed National
Equal Opportunities Group established Regional
Barriers to Employment groups established
www.marchmont.ac.uk
29
High Road Project
Marchmont Observatory
OLD-FASHIONED DISTINCTION IN INTERNATIONAL TRADE
THEORY STATIC

• Price competitiveness
• Non-price competitiveness
• MODERN DISTINCTION DYNAMIC
• Low unit cost route
• High value added route
• THE HIGH VALUE ADDED/SKILLS VISION THE HIGH ROAD

www.marchmont.ac.uk
30
High Road Project
Marchmont Observatory
WHY TAKE THE HIGH ROAD?

• SUSTAINABILITY
• INCOME DISTRIBUTION
• NOT JUST ABOUT TRADEABLES

www.marchmont.ac.uk
31
High Road Project
Marchmont Observatory
WHERE DO SKILLS FIT INTO THE PICTURE?

• UKs alleged deficiencies the role of
  international audits
• But skills are a function of purpose
• If the UK follows the low value added route, the
  demand for skills will be low
• If the UK follows the high value added route, the
  demand for skills will be higher

www.marchmont.ac.uk
32
High Road Project
Marchmont Observatory
NEED FOR SKILLED WORKERS
DRIVE UP SKILLS LOCALLY
GLOBAL ECONOMY
www.marchmont.ac.uk
33
High Road Project
Marchmont Observatory
National Skills Policy Regional Skills Policy
Local Skills Policy
Globalisation
L M I
Workforce
TUC ACADEMY
ULR
Learning Provision
Community
CLR
www.marchmont.ac.uk