Viewpoint: Shonaig Macpherson

Viewpoint: We must optimise the economic return on our huge investment in education

A midst the debate about Scotland’s economy and our place in the world, it is all too often overlooked that a world-class education system is one of the fundamental building blocks that the Government must put in place if it is to meet its goal of increasing Scotland’s rate of sustainable economic growth.

Whilst investment in skills and education is not sufficient to guarantee economic success, it is absolutely necessary to compete in the modern world. The big challenge for us all is to ensure that Scotland’s wonderfully strong record on education, training and employment translates into stronger productivity and more robust economic growth.

To do this we need to deliver a closer match between the supply of certain skills and qualifications and the demands of the economy. FutureSkills research shows that the number of vacancies that employers are struggling to fill is low - just under 2% of the number of employees. But, this equates to more than half of all vacancies at any one ime being ‘difficult to fill’.

Perhaps this is not much of a problem if your organisation is standing still or shrinking, but imagine the impact on a growing business that needs to recruit to increase sales or access new markets.

Shortages are highest among professional and technical grade staff, and concentrated in sectors such as financial services, construction and tourism - all priority industries for Scotland, with huge potential to grow. Scotland will only succeed in these sectors if there is a supply of people with the kills they need, and this requires funding and training resources to follow industry demand.

Make the match

The Modern Apprenticeship programme is one example of where more could be done. It’s unclear to me why we have the current target of 30,000 Modern Apprenticeships in Scotland. Is this the optimal investment for the needs of the economy?

I think we would find similar questions about other qualifications difficult to answer, despite the growing body of data on skills needs and provision. I know that there will never be a perfect match between demands of learners, education resources and the requirements of employers, but we must try to rise to the challenge of optimising the economic return on the huge investment this country makes in education and skills each year, especially as we become an ever greater knowledge-based economy.

And we must at all times plan ahead for future threats and opportunities. For example, we have seen a huge decline in the numbers of students in maths, science and engineering. But manufacturing is still Scotland’s biggest industry sector, and will create over 24,000 jobs in the next 10 years.

Oil and gas services, food and drink and chemicals are three of our biggest exports and are all predicted to see strong growth in the coming years. Carbon capture and renewable energy offer powerful ways of meeting our commitment to tackling climate change and could be huge worldwide exports for Scotland in years to come. But we will only exploit these opportunities if we provide the right FE and HE courses to attract bright young people into these areas.

Skilled workforce

Employers too have a huge responsibility to rise to the challenge of training their workforce. If McDonald’s can develop its own NVQ Level 4 diploma, then there is no reason why other large employers can’t do the same. With 70% of the 2020 workforce already in the labour market, it is vital that employers play their part in up-skilling and renewing the workforce.

Despite the constraints on college places and funding in different parts of Scotland, it seems that the main block to increasing apprenticeships is that too many employers are unwilling to invest in the future. One SCDI member in construction received 2,400 applications for 70 apprenticeship laces, with most of the unsuccessful pplicants unlikely to get a training place with another company, as so many firms in the sector do not take on significant numbers of apprentices. If employers don’t start doing more, it is only a matter of time before the UK government introduces a compulsory levy and framework for training.

And at the top end of the labour market we need to end ‘over-recruiting’, where big firms ‘hoover’ up the best graduates but then fail to really stretch them or allow them to fully utilise their skills. How can we ever hope to match the productivity of the very best, when many of our own top graduates are only employed at 80% capacity?

Planning ahead and ensuring that employers are really utilising the skills of their workforce are the only ways in which we will ensure that all Scots young and old - indeed, new and old - will share in our growing prosperity, and the only way that we will make Scotland an even greater and more productive place to live, work and do business in.

CV

Shonaig Macpherson CBE FRSE practised as an intellectual property lawyer for over 20 years. She retired as Senior Partner of McGrigors in 2004. A leading public figure, Shonaig is Chairman of the Scottish Council for Development and Industry (SCDI), the National Trust for Scotland and ITI Scotland Limited, and a Fellow of the Royal Society of Edinburgh. Shonaig is married with two sons and a stepson.

Posted on 16 June 2008 under careers education, issue 21, viewpoint.
Tagged as skills development, apprenticeships.