UK COMMISSION FOR EMPLOYMENT AND SKILLS Ambition 2020: World Class Skills and Jobs ANNUAL IED CONFERENCE Bournemouth 7-8 th October 2009 Michael Davis Director of Strategy & Performance UK Commission for Employment and Skills

2 UK COMMISSION FOR EMPLOYMENT AND SKILLS In a nutshell Role –Our role is to provide independent advice to the highest levels of Government on steps required to achieve world class standing in employment and skills by Remit to –Assess annually UK progress towards becoming a world class leader in employment and skills by 2020, consistent with the aims and priorities of the four nations –Advise the highest levels of Government on policies and delivery that will contribute to increased jobs, skills and productivity –Monitor the contribution and challenge the performance of each part of the UK employment and skills systems in meeting the needs of employers and individuals, and recommend improvements in policy, delivery and innovation –Promote greater employer engagement, influence and investment in workforce development –Fund and manage the performance of the Sector Skills Councils as key industry leaders in skills and employment.

3 UK COMMISSION FOR EMPLOYMENT AND SKILLS Ambition 2020: Contents and Structure The Agenda: Prosperity, Jobs and Skills The Ambition: Skills and Jobs Jobs: Today and Tomorrow Other Measures of Skill Development Progress: How Are We Doing? Prospects to 2020: Where Are We Going? Mismatches Between Jobs and Skills Raising Employer Ambition Skills and Employment Policy

4 UK COMMISSION FOR EMPLOYMENT AND SKILLS The Agenda and the Ambition High employment/ high productivity High employment/ low productivity Low employment/ low productivity Low employment/ high productivity Productivity: GDP per hour worked (US$ at current prices), 2007 Employment: Employment populations ratio 2007, all persons Employment: UK 10 th place Productivity: UK 11 th place SETTING A WORLD CLASS AMBITION: SUSTAINABLE ECONOMIC COMPETITIVENESS & SOCIAL COHESION 2020 Goal: World Class Productivity Levels - in top 8 OECD countries 2020 Goal: World Class Employment Levels - in top 8 OECD countries 2020 Goal: World Class Skill Levels - in top 8 OECD countries Source: UKCES, Ambition 2020: World Class Skills and Jobs for the UK, 2009, pp 21-22

5 UK COMMISSION FOR EMPLOYMENT AND SKILLS The Agenda: Productivity and employment in the Nations and Regions of the UK 5

6 UK COMMISSION FOR EMPLOYMENT AND SKILLS The Agenda : Routes to Prosperity  Employment – the UK ranks 10 th  Productivity – the UK ranks 11 th  Inequality – the UK ranks 14 th  National, Regional and Sectoral variations are critical  Skills are central to raising employment and productivity and reducing inequality

7 UK COMMISSION FOR EMPLOYMENT AND SKILLS Skills and Employment The Low Skilled experience low and declining employment rates – the only disadvantaged group to do so Source: UKCES, Ambition 2020: World Class Skills and Jobs for the UK, 2009, Chart 1.5, p 29 – DWP using Labour Force Survey

8 UK COMMISSION FOR EMPLOYMENT AND SKILLS Skills: the route to Prosperity AGE Source: Cabinet Office, Getting On, Getting Ahead: A Discussion Paper: Analysing the Trends and Drivers of Social Mobility, 2008 Gross earnings (£000s)

9 UK COMMISSION FOR EMPLOYMENT AND SKILLS The UK Qualifications Profile : good progress over last decade UK Qualification Achievements Change 1997 – 2007 %Nos (‘000s)% % Level Level Level Level Below Level No Qualifications % -26% Source: Labour Force Survey, 2008 – Note: Working age population 19 – 59/64

10 UK COMMISSION FOR EMPLOYMENT AND SKILLS Progress towards 2020 Ambitions Skill Level Low level skills Intermediate level skills High level skills Today (2006) Forecast Outcome Ambition Top 8 Sir John Rose, CEO Rolls-Royce (May 2006) There are only three ways of creating wealth. You dig it up, grow it, or convert it to add value, anything else is merely moving it about. In a high-wage economy you must focus on high converted-value activities. To achieve high converted value you need good education and differentiating skills

11 UK COMMISSION FOR EMPLOYMENT AND SKILLS Our Prospects Basic Skills We will achieve our basic literacy objective of 95% We will not achieve our basic numeracy objective of 95%

12 UK COMMISSION FOR EMPLOYMENT AND SKILLS Demand: jobs mismatch and employer ambition  growth of skilled jobs and decline of low skill jobs stalled;  no real evidence of deep seated shortages;  over qualification … or underemployment;  evidence that the UK’s excess demand over supply is low relative to other countries;  slowest positive growth in skilled jobs, yet fast growth in skilled workers

13 UK COMMISSION FOR EMPLOYMENT AND SKILLS Employer Ambition We need to go beyond: (i)raising skill levels; and (ii)a better match between skill requirements and skills availability  The ‘virtuous circle’ of raising skills demand and supply  Skills as a ‘derived’demand –Economic Policy –Skill Utilisation –Management and Leadership

14 UK COMMISSION FOR EMPLOYMENT AND SKILLS Key Messages to Government: a new Policy Framework Match Mismatch Positive Economic and Social Outcomes Supply of Skills Employment Demand Negative Economic and Social Outcomes Economic Performance EmploymentReduced InequalityProductivity Required Workforce Business Strategy Management & Leadership Skills Utilisation Economy – level/structure Industrial Policy Economic Policy Other Drivers Potential Workforce Skills Attainment Learning provision Accredited (Qualification) Informal (Training) Skills Investment Individual, Employer, Government Guidance – firms & people Demand Jobs Supply Shortages and skills gaps Unemployment and Inactivity ‘Over-skilled’ / ‘Under-employed Migration

15 UK COMMISSION FOR EMPLOYMENT AND SKILLS Moving forward If we keep on doing what we’ve always done, we’ll keep on getting what we’ve always got!” W.L. Bateman “The world we have created is a product of our thinking. If we want to change the world we first have to change our thinking” A Einstein

16 UK COMMISSION FOR EMPLOYMENT AND SKILLS Skills, Jobs Growth – emerging thoughts Raise employer ambition Motivate individuals Agile skills system World class jobs, skills and growth Actively signal HPW For the journey Personal Accounts Empower Customers Focus on outcomes Focus on outcomes

17 UK COMMISSION FOR EMPLOYMENT AND SKILLS Empowering customers at point of purchase