Skills for Business: A Sectoral Approach to the Identification of Skill Needs in the UK Dr Vicki Belt Senior Research Adviser, Sector Skills Development Agency Systems, Institutional Frameworks and Processes for Early Identification of Skill Needs International Conference 25th-26th November 2004, Dublin, Ireland

The Context The UK productivity gap GDP per hour worked is estimated to be: 9% points below the EU average 16% points below the USA (Source: O’Mahoney and van Ark, 2003) Sectoral differences in productivity and performance UK performing above average EU in 16 sectors But below average in 37 sectors (Source: Groningen database)

The Importance of Skills Skill deficiencies in the UK labour market Skills shortages and gaps Uneven distribution of skills Making the links between skills and performance Training rates/investment Higher level skills High performance workplaces Benefits for the individual as well as business/economy Economic change: the skills implications

The Skills for Business Approach Demand-led UK-wide remit Opportunities for all Employer engagement Sectoral focus A network of Sector Skills Councils (SSCs) The Sector Skills Development Agency (SSDA) The Skills for Business Network …Working together to improve learning supply and skill utilisation - ultimately impacting on UK economic performance

Identifying Skill Needs: Research Remit Clear, accurate articulation of employer’s skill needs by sector Collation and development of high quality sectoral labour market information Nationally Regionally Internationally Cross-sector/generic skills research Drawing effectively on existing data and research Working in partnership Evaluation or “what works”? Making the business case for investing in skills

Sector Skills Agreements (SSAs) Compacts between SSCs, employers, training providers Objective to ensure that ‘the skills the sector needs are the skills the sector gets’ Key aims: Bringing provision in line with employer demand Improving entry level and employability skills Raising employer commitment to skills Consists of 5 linked stages From initial skills needs assessment to final action plan

Sector Skills Agreements Stage 1: The Skills Needs Analysis The foundation stone of the SSA High quality, authoritative assessment of a sector’s skill needs Forward-looking To cover four key components: What drives skill demand? Current skill needs What lies ahead? Geography Drawing on mix of: Existing data sources SSC’s own primary research

Some Issues and Challenges Avoiding duplication of effort in research Ensuring consistency in the use of LMI Dealing with areas of shared interest or ‘overlap’ between sectors Representing the needs of sectors where there is no SSC Integration of Skills for Business within the existing institutional system within the UK Nationally Regionally