This report provides an overview of the Skills and Productivity Board’s work to document the skills needs of the economy now and in future, with a view to identifying skills mismatches and growing areas of skills needs, both across the economy as a whole and in a small number of priority areas (Health, Science and Technology, Managers, and Skilled Trades).
The analysis identifies a set of ‘core transferable skills’ that are currently in high demand across many occupations, including in the priority areas, and are likely to continue being in high demand in the future. These include communication skills, digital and data skills, application of knowledge skills, people skills, and mental processes. Because these skills are valuable across a wide range of jobs, firms have weaker incentives to invest in them than in firm-specific skills. Investing in the development of these core transferable skills is therefore likely to be worthwhile for government, as they equip people with skills that are important in many occupations, are transferable across occupations, and are at risk of under-investment from employers.
The policy report draws on analysis done by Skills and Productivity Board to: (1) determine the current and future skills needs of the economy; (2) look at skills mismatches; and (3) find growing areas of skills needs. The technical report focusses on the supply and demand for skills and outlines the: (1) approach and methodology adopted; (2) analysis done; (3) limitations identified with the analysis; and (4) main findings.
This analysis identifies skills that are in high and/or growing demand, and that may be in shortage. There is evidence that many of these skills are rewarded in the labour market and some evidence that improving skills more generally can raise productivity. In principle, therefore, this analysis can support the Department for Education – and other organisations, and indeed individuals, interested in skills development – to focus skills provision and investment on areas of greatest value to individuals and the economy.
However, we need a better understanding of the reasons why particular skills appear to be in shortage before concluding that trying to increase the supply of those skills is the right policy response. We need better evidence on the most effective ways to develop the skills we need, and a better understanding of the extent to which developing certain skills in isolation is sufficient, or whether the benefits of investment in skill development are only realised if several skills (a ‘bundle’ of skills) are developed at the same time. And while reducing skills mismatches should reap rewards in terms of increasing productivity, there are limits to the benefits of doing so if the jobs for which these skills are needed are primarily in low productivity occupations or sectors.
Core transferable skills
There are a set of core transferable skills which we identified as being important across many occupations in the economy today, including the priority areas we identified, and are also expected to be important in five years’ time. These include communication skills, digital and data skills, application of knowledge skills, people skills, and mental processes.
Investing in the development of these core transferable skills is likely to be worthwhile, in the sense that it will equip people with skills that are important in many occupations in the labour market, both now and in the future, offering greater resilience to unexpected future labour market shocks by giving workers the skills necessary to change jobs if or when the need arises.
Firms have weaker incentives to invest in these types of skills, because they may not realise the full benefits of their investment if workers use their new skills to change jobs (unless the pay-off is realised quickly). Consequently, these types of (unless the pay-off is realised quickly). Consequently, these types of skills are often under-invested in by firms in comparison to firm-specific skills. There may therefore be a stronger case for the government to invest in these types of skills directly, or a need to better incentivise firms to do so.
Chosen excerpts by Job Market Monitor. Read the whole story @ Understanding current and future skills needs – GOV.UK