The economy won't turn around unless we focus more on skills. Athene Donald joins up different parts of the productivity puzzle.
You don’t have to read beyond the first few lines of the summary of last week’s House of Lords’ Science and Technology Select Committee Report to recognise they are sceptical about the Government’s direction of travel when it comes to research and innovation. Indeed, the title rather gives the game away: ‘“Science and technology superpower”: more than a slogan?’ With a long-standing commitment to raising spending in the UK to research and development to 2.4% of GDP (Gross Domestic Product), the report spells out that ‘Despite welcome steps and laudable rhetoric, we are concerned that the Government is not on course to meet its ambitions.’ (They don’t comment on the fact that GDP might not be as healthy as pre-Brexit, pre-Covid predictions might have suggested, so that 2.4% in absolute terms may likewise represent a smaller figure than anticipated, while inflation surges so that anyhow the cash goes less far.)
They have now put out a call for evidence around people and skills in STEM (science, technology, engineering, and mathematics) recognising in the course of their earlier enquiry that achieving ‘superpower’ status requires an appropriate supply of the right people in the right place. Some of these people will be in academia, of course, but many will not. The usual rule of thumb is that there needs to be twice as much private investment in research, as public – and the power of the government to influence that is limited. Particularly if, as the report spells out, ‘industry does not yet feel engaged with the strategy process.’ One might ask, what strategy? There are plenty of warm words and aspirations, few explicit actions, levers or incentives in evidence in (prime) ministerial words. Indeed, currently we don’t even have a Minister for any or all of Science, Innovation and Research, unless you count the Secretary of State himself.
Getting the skills issue right is crucial in order to ensure we move in the right direction for innovation and productivity, including as we move towards net zero. The current soaring temperatures highlight just how important it is we (globally as well as within the UK) should be focussing on this latter, but rhetoric again falls short of action in this space. The Office for Science and Technology Strategy (OSTS) has identified ‘the sustainable environment [including net zero]’ as one of its four priority areas, but specific targets of the aims under this, as well as the other three headings, are sadly lacking. How will it be achieved if the appropriate mix of skilled personnel are not available, including those who can translate novel research and ideas into practical solutions, followed by scale-up? Diffusion of information requires the presence of adequate absorptive capacity both in individual firms and across a given region, a topic I have written about before in the wake of this Spring’s report from the Royal Society on Regional absorptive capacity: the skills dimension. Bright ideas alone will not increase productivity or contribute to the wider economy if they cannot be delivered at scale.
The levelling up agenda (if the next Prime Minister remains serious about this phrase) means it isn’t sufficient to have lots of graduates moving to London for big salaries. Indeed, salary is a very imperfect measure of educational outcome for many reasons, and won’t have any immediate relationship to local needs or job opportunities. (It is certainly not a reason for pitting arts and humanities against the STEM disciplines, as too often attempted). One of the key concerns is that workers with sub-degree skills and qualifications are less likely to be willing to move away from their home area than graduates. They are also in short supply, as highlighted in a 2018 report for the Gatsby Foundation by Simon Field, which showed the UK had the lowest number of them (in terms of numbers per thousand in the population) relative to comparator nations. So, if there is to be a high-quality clothing factory to be opened or expanded in Alfreton in Derbyshire (to take a recent example written up in the media), where will workers skilled in logistics capable of designing the requisite supply chains come from or alternatively will they be trained locally? These individuals don’t need to be STEM graduates, but they certainly need to be adequately competent in maths and IT.
Opportunities in ‘left behind’ regions are crucial if they are instead going to be ‘moving ahead’ regions, but the lack of coherent strategy in government thinking, highlighted in the Lords’ report around research and innovation, is just as visible in the skills agenda and needs to be swiftly addressed. To take another promising recent media story, directly relevant to the green economy, are the plans by Scottish Power to build a 100MW green hydrogen plant at Felixstowe, to provide fuel for the expanding fleet of lorries transporting goods from the docks (Felixstowe has freeport status and is due to expand very significantly) and machinery on site. The port itself is already struggling to recruit workers with the right set of skills, a problem that can only be exacerbated – in the absence of a better supply of people – by the creation of a new plant on this scale competing for the same sorts of people with technical expertise. Yet such a plant, aiming to be able to fuel 1300 trucks when at capacity, is sorely needed to reduce emissions from lorries on our roads (or trains in principle).
Felixstowe is literally at the end of the line (from Ipswich) and has some extremely deprived areas. The creation of new green jobs in the area offers massive potential if the relevant dots are joined up. Unfortunately, BEIS (Department for Business, Energy & Industrial Strategy) and DfE (Department for Education) seem determined to keep their distance and not work constructively together. Despite ‘skills’ being a word tossed around liberally by politicians, delivering the education and training that is needed in schools, FE (further education) colleges and on-the-job in order to provide a workforce which can deliver and is recruited from the local area (not imported from other areas which may already be thriving), doesn’t appear to be considered holistically by the two departments. ‘Skills’ has to be more than just another slogan which isn’t thought through or invested in. FE colleges can only be effective it they are properly funded, as well as well-connected to local enterprises. The response to the Augar Review and the Levelling Up white paper were both lacking in robust plans on this front.
This issue is not hard to understand, but the way politics is tied to soundbites and silo mentalities means that the key players seem to be unwilling or unable to join the dots between skills, innovation and industrial policy as needed to deliver a revived and greener economy, both locally and nationally, which is – to use another oft-used if now apparently outdated phrase – ‘build back better’.
Original source: http://occamstypewriter.org/athenedonald/
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
