Skills in Wales – A focus on young people will not be enough, 81.5 per cent of the workforce of 2030 have already left compulsory education

Wales is at the centre of a number of significant disruptions likely to bring long-term changes for its people and economy. Some of these are global in nature, such as automation and technological change. Some affect the whole UK – most obviously, the uncertainty around Brexit. Others come from within Wales, such as the rapid increases in its older population, which we will see expand over the coming years.

Automation is likely to have a significant impact on Wales over the coming years. Looking at those roles with the highest potential for automation, we find that 6.5 per cent of jobs in Wales, or 130,000 roles, have among the highest potential for automation – a rate higher than the UK average (6.2 per cent).

Equally, the effects of automation are not likely to be felt evenly. A higher proportion of women than men are in the roles with the highest potential for automation. Whereas women make up 48 per cent of workers in Wales, just under two-thirds (65.1 per cent) of the jobs at the highest risk of automation in Wales are performed by women.

For the people and economy of Wales to be ready for these very 21st century changes, we will need to see a 21st century skills system ready to equip Wales for the future.

A focus on young people will not be enough. 81.5 per cent of the workforce of 2030 in Wales, and 60.8 per cent of the workforce of 2040, have already left compulsory education. The response to automation will need to meet the skills needs of people of all ages.

This report also outlines the economic and policy context facing Wales, and attempts to set out some of the key challenges and opportunities to build a successful 21st century skills system. Almost without exception, the key solutions to meeting these challenges and opportunities rely on developing a skills system that can prepare people and employers for the future, and be ready to respond when significant and rapid change takes place. If Wales is to shape the impacts of these disruptions it will need a skills system ready to do so.

A number of positive attempts from decision-makers in Wales, including the Welsh government and Welsh assembly, aim to tackle some of these changes. Firstly, there have been a number of policy reviews in Wales in recent years that have begun to set out a new policy direction, for at least some parts of the skills system. Recent reviews around apprenticeships, employability, governance across the post-compulsory education sector, and for higher education funding and student finance have attracted a great deal of support and set out new directions for the system as a whole. Equally, college mergers in particular seem to have provided for a stronger college sector than would otherwise have been the case. In addition, a number of reviews have considered the future for Wales’ economy, particularly in the light of automation and technological change.

However, while there has been a great deal of policy attention in some areas – particularly in-work learning policy and higher education funding and governance – there has been less attention in other areas. Given the cross-border nature of Wales’ skills system – particularly its higher education sector – policy changes in England are likely to lead to significant knock-on effects in Wales, and potentially vice versa. We have seen this with the trebling of tuition fees in 2012/13, the introduction of the UK-wide apprenticeship levy, and may see this again following the Auger Review of Post-18 education in England.

To prepare for these 21st century challenges and opportunities, we will need to see action beyond government alone. The economy in Wales is dominated by smaller employers, who are currently less likely to invest in developing the skills of their workforce than larger employers. Equally, across all employers in Wales, the overall number of days of training provided has been falling in recent years. In many ways, Wales has a cross-border economy, so attempts to use the skills system to shape its economy will need to be mindful of potential cross-border implications and interactions.

Wales goes into these changes with longstanding economic weaknesses – alongside some more recent positive news. Its economy performs below the UK average on a number of measures. Levels of pay and productivity growth, in particular, are far below many parts of the UK. Manufacturing has decreased in importance in Wales, as it has across the UK, dropping from 18 per cent to 10 per cent of all jobs in Wales (compared to a decrease across the UK from 14.7 per cent to 7.7 per cent) between 1998 and 2018.

With that said, Wales has performed well over the last 20 years in increasing
the proportion of high-skilled jobs in the country, with a 25-percentage point increase in the proportion of all jobs classed as high-skilled between 1998 and 2018. There are fewer mid-skilled roles, leading to questions over risks for reduced career progression. There have also been the beginnings of very positive trends on employment and economic inactivity rates in Wales, closing towards the UK average following decades of sustained underperformance in Wales. While these positives have occurred recently, and we should be cautious about pronouncing a trend, it shows that some of the objectives for improving the economy in Wales are possible and achievable.

This report marks the first of two for this project on Wales, and follows our previous reports on the skills systems in Scotland and Northern Ireland, each of which along with this one have been funded by the Further Education Trust for Leadership (FETL). The two projects are being undertaken from spring through to autumn 2019 with further impact work following publication. As a whole, the project aims to look at how to build a 21st century skills system in Wales, starting through this rst report with a focus on the challenges and opportunities facing the skills system in Wales, before moving on to look at what needs to change and what needs to stay the same to prepare the skills system in Wales for the future. We have been able to undertake desk-based research, and face-to-face research with several key contacts in Wales working within and with the skills system. Through this work we have identified ten key challenges and opportunities facing the skills system in Wales as we move onto our next phase of the project.

1. Automation and technology, causing significant change, redistributing tasks and reworking jobs in Wales.
2. An older population in Wales, ageing markedly from now through to the end of the 2030s.
3. The uncertainty surrounding Brexit, our future relationship with the European Union, and post-Brexit funding arrangements.
4. The changing nature of globalisation and its impact on Wales’ economy. Narrowing Wales’ existing economic inequalities and strengthening Wales’ economy for the future.
6. Providing a policy and funding environment that offers security, certainty and consistency, while ensuring the skills system is efficient and delivering the needs of learners and the economy.
7. Delivering on the opportunities created by the recent and forthcoming reform to the governance of parts of the skills system in Wales.
8. Developing stronger employer engagement in the skills system, from the classroom-level up.
9. Developing stronger learner engagement so that curricula are co-produced between learners, students, employers and providers.
10. Developing a skills system that delivers across Wales’ distinct geography, supporting the Welsh language and culture, and enabling people from across Wales fair access to its benefits.

Chosen excerpts by Job Market Monitor. Read the whole story at A 21st century skills system for Wales: Challenges and opportunities | IPPR


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