2SVP SembCorp Utilities & Chair NEPIC Skills & Education Engagement “Regional Strategies in Skills Development -Addressing the issue of the skills shortage facing industry in NE England Process Industries”ECRN Congress of European Chemical Regions Network, Ludwigshafen,GermanyThursday 29th November2007George RitchieSVP SembCorp Utilities& Chair NEPIC Skills & Education Engagement
3Science & Industry Council City RegionsPhysical CentresPrivate FinanceScience & Industry CouncilRegional PartnershipNaRECRelated Activities e.g. PV NorthCluster DevelopmentLeadership CouncilRelated Activities e.g. BiiNew ClusterCelsCPIRelated Activities e.g. Tees Valley Hydrogen ProjectNEPICEnergyHealthcareProcessUniversitiesCentre for Enabling Technology (Cenamps)DesigneBusinessManagement SkillsNStarOne NorthEast Three Pillars Strategy to Develop the NE Economy
4Clusters…?Clusters are groups of inter-related industries that drive wealth creation in a region. Often they represent the entire value chain of a broadly defined industry from suppliers to end products, and are interconnected by the flow of goods and services throughout this chain.
5NE REGION -The Importance of NEPIC The region’s biggest industry sectorThe Process Industry is absolutely critical to the North East economyand to its successful development and prosperityThere are over 200 individual Chemical, Pharmaceutical, Specialityand Biotechnology companies operating in the region producing atotal of £8.8 billion GDP.Regional Direct Employment in ManufacturingRegional GDPPharmaceutical & Speciality Petrochemical Other Industry
6Geographic Intimacy 200 Pharmaceutical, Biotech, Speciality & Base ChemicalCompaniesPlusSupply chain
7NEPIC’s Economic Impact has many features of a true economic cluster Teesside Petrochemical cluster is the largest integrated chemicalscomplex in the UK in terms of manufacturing capacityNorth East Pharmaceuticals includes the top three global pharmaceuticalmanufacturers producing in excess of 33% of the UK’s pharmaceutical GDPUK’s second largest port 70% occupied by Process Industry GoodsLargest non-military R&D Centre in Europe & see also next slideRegion has many top speciality and consumer products manufacturersThe Supply Chain of these combined industry sectors has more than 350companies based in the North East350 of these companies are already formally engaged through membershipTogether the companies in the combined cluster employ 34,000 peopledirectly with a further 280,000 are indirectly impacted
9NEPIC GDP Growth and Investment Team The Team’s ChallengeThe North East is short of £9 billion of GDP compared to the averageUK Region (per capita calculation)The Process Industry is 25% of the NE Economy - £8 billion of £32 billionTherefore,Can the Industry contribute £2billion of additional GDP to help close thisGDP Gap within the next 10 years? (The Opportunity – The Leitch Dividend)About £1800 productivity gain per employee in NE
10NEPIC is leading and aiming higher than ever before Marketing, Communication & NetworkingGrowing the activity to achieve regional spread, UK and Global recognition and the involvement of all sectorsSkills and EducationExpanding targeted activities in the adult skills and science education to deliver a better trained workforce across all sectors.GDP Growth and InvestmentFocusing regional resources to increase investment opportunities and indigenous growthTrade GrowthEstablishing a greater understanding of region, industry and company capability enabling companies to find and fulfill new business opportunitiesInnovation, Research and DevelopmentCreating Collaborative mechanisms to build projects between industrial and academic partnersManufacturing & ProductivityLeveraging regional providers to drive performance and take up improvement programs
11NEPIC’s big idea Skills & Education Key to the development and delivery NEPIC’s programmes will be the sub-teams populated by more than 120 industry leaders from its sector in the North East who will lead and develop strategic priorities for the NEPIC executive and Industry support bodies in 7 programme areas:Marketing, Communication & NetworkingInternational TradeInnovationGDP gap closure & InvestmentManufacturing & ProductivitySkills & Education
12Some simple factsToday over 70% of our 2020 workforce have already completed their compulsory educationIn UK one third of adults do not hold the equivalent of a basic school leaving qualificationOne half of adults have difficulty with numbersOne seventh are not functionally literate
13The Leitch Vision and Ambition –The Opportunity UK to commit to becoming a world leader in skills by 202095% adults achieve functional literacy & numeracyExceeding 90% of adult population qualified to atleast Level 2 (currently 70%)Shifting the balance of intermediate skills from Level2 to Level 3(doubling the number of apprentices to500K, most of growth from adults)Exceeding 40% of adult population qualified to Level4 and above
14The Leitch Vision and Ambition –The Opportunity continued We all need to embrace itHasn’t sunk in yetIt actually means at least a doubling of the level of attainment (employers to change behaviours)i.e. Every 2nd person in the NE needs to attain another level qualification than has now – Just to stand stillWHY:Skilled workers are better able to adapt to new technologies and market opportunitiesHigher levels of skills drive innovation, facilitate investment and improve leadership and managementWithout world class skills, UK businesses will find it increasingly difficult to compete and innovate.The Global playing field is changing fast – the biggest restructuring of the world economy since the rise of the USA e.g. over the next 10 years China & India will double in economic size – the UK will only be 25% bigger??
15The problem as we see itFewer school children taking science plus 16 to 18 year old population going into decline from 2007Insufficient technicians coming through via apprenticeshipsNot enough engineering and science graduates – viewed as difficultDifficulty recruiting engineers & scientists and demand is very highPoor reputation of the industryLack of engagement over past 5 years from industryNew investment and technology is driving the need for recruitment and enhancing skills – both for construction and operationNew technologies require a new higher level of employee skillsDemographics –aging workforce 15% are over 55Industry regionally has now more Global ownership and regionally need to be more productive/competitive –the forces of globalisation are not going to fade away, they are only getting stronger
16Process Industries: The Skills Gap! Growth is currently constrained by the lack of suitably qualified employeesAgeing workforce and shortage of new entrantsInadequate training and development infrastructureLimited transferable qualifications for individualsComplicated funding mechanismsFailure to keep pace with innovationWe in industry must take the initiative to solve our problem
17So our Challenge TO DO SOMETHING ABOUT IT! I cannot get involved, I have not got the time.UK Training and Education is not my concern, we are Singaporean owned.I am only concerned when I cannot recruit.It is a waste of time getting involved, it makes no difference.We are expanding and in a high tech area, we have no problems.We can hide our heads in the sand and pretend we won’t be affected – but the consequences will be disastrous – a slow but inevitable economic declineDoes it have an Effect?Two multinational companies have stopped validation of training (not the training) as they lost too many people to the North Sea.Question: How much should an employer be involved ?Prime directive: Profit Key Question: Over what timescale?: is it a cost ? Or is it a value?
18Skills, Education and Engagement Team Organisation Workforce development, and retentionStrategyChair: George RitchieSecretariat: CogentKey Members: NEPIC, Industry, ONE,SEMTA, LSC, Business LinkAttracting and engaging talentSkillsChair: George RitchieSecretariat : SEMTAKey Members: NEPIC, Industry, Training providers, Cogent, LSC, HE/FE, NEHSNEducation & EngagementChair: Kevin ThrowerSecretariat: CIECKey Members: NEPIC, Industry,Educationalists, SLC, FE/HECore purposeDefine the number, type and level of resources needed to support the growth plans within the Process industry in the North East of England.Ensure that skills gaps and shortages are effectively addressed through improved utilisation, coordination and development of regional training provision.Core purposeDevelop and implement the strategy to present the Process Industry in the North East of England as being an attractive place to work.
19Skills, Education & Engagement Strategy Strategy TeamPriorities to Support the Delivery of the GDP StrategySkills, Education and EngagementLeader:George RitchiePurpose:To upskill the existing workforce and to attract and retain new entrants.SkillsDefine the number, type and level of resources to support the growth plans within the Process industry in the North East of England.Ensure that skill gaps and shortages within the industry are prioritised and addressed through appropriate project identification and implementation.Improve productivity in the Process Industry through better coordination, utilisation and development of regional training provision.2. Education & EngagementDevelop the strategy to present the Process Industry in the North East of England as being an attractive place to work.Attract and retain young people in general to the science-based industries & reverse the trend of reduced number of entrants to science & engineering courses in FE / HE, and increasing closure of science & engineering faculties.Encourage more entrants in general to the industry to combat the ‘demographic time-bomb’ of an ageing workforce, particularly in the base sector, and to improve the perception of the industry with the general public, a block to recruitment.Develop working partnerships with a wide range of science education programmes at sub-regional, regional and national levels, encouraging all member organisations to commit time and resources to establish such links with local schools, colleges & universities.
21Key issues Business Plan submission to ONE. Skills, Education & Engagement Action Plan.Business Plan submission to ONE.DVD’s produced for graduate recruitment/ Careers in Science – Choose your own adventure.Closer working with Schools and universitiesIMechE Great Skills Debate.Careers Fairs.Skills Survey – analysis by ONE.National Skills Conference – York 16th to 17th July.NE Skills & Education Conference – 8th November.NSAPI.
22NEPIC – Business Plan for Science Education Industry Attractiveness Programme 2008 – 2011 to extend current programmes to reach over 1500 schools, 55K pupils and work with 6K teachersA Business Plan that is central to the Process Industry’s need to attract 16,000 people into careers in the sector in the North East of England over the next 10 years.The Business Plan has been endorsed by the Leadership Team and Member Companies and submitted to ONE.Need to support our Science Education Units in the region along with SETPOINT (part of STEMNET) promoting Science, Technology, Engineering and Mathematics subjects to 5 – 19 year olds
23NEPIC Skills Survey – further analysis by ONE Skills Survey has been issued.Need 400 apprentices per year.Need 8,000 new technicians by 2015.Need 8,000 new graduates by 2015.Data have been supplied to NSAPI.Data have been further analysed by ONE – meeting held to review this and action plan being drawn up for 2008 implementation.Agreed with ONE that this will be an annual survey from NEPIC.
25Why the NorthEast Universities? Students already here, so positively disposed to regionEasier to build a relationshipPlacements and projects easier logisticallyStudents’ partners may also to be localWork with Universities re curriculum what the industry is looking for
26What we should focus on to attract new graduates Building a positive image for the industryStress careers at forefront of technologyOpportunity to travel, within multinationals, anchored locallyCPD
27Process IndustriesBusiness Plan submitted to Learning & Skills Council National Office on 31/5/07.£1m has been pledged by employers and there is still a need for more demonstrable financial support from the employer base as over 50% of this has been raised by NEPIC (£575k), to-date.Ministerial authority was made on 7th November 2007 to operate the academy.
28The VisionThe vision of the Academy is that it will lead the UK Process Industries in ‘Creating a World-Class Workforce’NSAPI will lead the drive to ensure that employers within the Process Industries have sufficient skilled people to achieve their business objectives, thereby enabling them to continue to contribute significantly to regional and national economic growth. It will do this by:Deploying StandardsDeveloping Training ProvisionDirecting FundingSupporting EmployersThe aim of the Academy is to reach a state where skills drive the UK Process Industries rather than constrain them.
29Upskilling to the Gold Standard HSEQFunctionalCompetenceTechnical
30Challenges for industry Image - This is outdated and inaccurate and not understood by many people outside the industry. It is up to the industry to go out and sell itselfProcess industry needs to be perceived as an exciting place to workProcess industry needs to be seen as solving climate change and other environmental issuesProcess industry needs to market the benefits of its products and show that it takes product safety concerns seriouslyProcess industry needs to be attractive to women and all sections of societyResources - Industry needs to commit management and employee time and expenditure to meeting the skills issueTraining and development as a priorityNurturing new employeesCommitting effort to publicise the issue generally and support sector as a whole as well as examining own company needs
31Challenges for industry Development and upskilling of existing workforce - this is a key resource - it is not just about new recruitsSetting high standards and expectationsCommitting necessary resource to deliver development and trainingIndustry needs to have increased involvement with education providers at all levels especially in recognised programmes which are mutually beneficialPrimary schoolsSecondary schoolsFurther educationIndustry needs to take a longer term viewSkills shortage issue will not go awayShort term effort for longer term gainSupport NSAPI
32Challenges for education Have an up to date view of roles and opportunities available in process industryUnderstand breadth of opportunities - not just science and engineering based but also in finance, supply chain, procurement, sales and marketing ,IT etcSponsor science and technical subjects - show how they can be used to provide benefits to society. Many examples right here on our doorstepFollow integrated and recognised programmes when interacting with industry e.g. children challenging industry and don’t have too many vehicles - keep it simpleShow a simple roadmap to industry of how everything fits together. Understand that everyone in industry is extremely busy and working with education needs to be made as efficient as possible.
33The Crusade IT’S OUR REGION, IT’S OUR FUTURE, IT’S IN OUR HANDS Process industry in North East is a success storyWe all need to ensure this continues and the industry becomes even more successfulThis will not happen without a highly skilled and educated workforce which is ready to face the challenges of global competitionIndustry and education must commit significant time and resources to ensure this occursIT’S OUR REGION,IT’S OUR FUTURE,IT’S IN OUR HANDS
34To sum up – something is happening! Don’t forget the Primary & Secondary SchoolsShort termAccept need for some greater employer engagement in workforce development (more apprentices & graduates) and MANAGE ITProvide clear leadership to supply the future, encouraging as many of our youngsters to do down this particular career pathEducationVocationalAND emotionalLong termDeliver NEPIC S&EE Action PlanWork with others to achieve The Leitch Implementation PlanNSAPIWe have no choice, it is merely a question of how well we work together and collaborate to make it happen.I believe in the NE we have made a start building on a strong foundation and viewed as best practice too.We have had success and we expect it to be repeated and praised.National Skills Academy Process IndustriesTalk up our achievementsTalk up our futureTalk up our importanceTalk up our people