Revised

Members present

Baroness Morgan of Huyton (Chairman)

Lord Aberdare

Earl of Courtown

Baroness Garden of Frognal

Lord Giddens

Lord Haskel

Lord Holmes of Richmond

Lord Janvrin

Lord Kirkwood of Kirkhope

Baroness O’Cathain

________________

Examination of Witnesses

Professor Judy Wajcman, Department of Sociology, London School of Economics, Professor Alan Manning, Department of Economics, London School of Economics, and Professor Phillip Brown, School of Social Sciences, Cardiff University

The Chairman: We are ready to move on. Welcome to our next set of witnesses. Thank you for joining us at our first session today. You have the list of interests from Committee Members in front of you. A couple of people will put them on the record orally, who did not in the previous session. This is a formal evidence-taking session of the Committee, so that means we will take a full shorthand note, it will be put on the public record in printed form and on the parliamentary website. You will be sent a copy of the transcript and you can revise it in terms of any minor errors. The session is on the record—it is being audio broadcast live and will subsequently be accessible by the parliamentary website. Perhaps you would not mind speaking up quite clearly, as there is a bit of noise outside today and we want to make sure we capture your words well as we go on. I should also say that anything else you want to send in addition after this session we would be very pleased to receive, so please do so if you wish. Do you want to say anything briefly by way of introduction or shall we kick straight into the questions? It is entirely up to you.

Professor Wajcman: Can I, please? I have the advantage of having been to the previous session so I cannot wait to get in. What I did want to say is that I think the future is unpredictable. We all agree there is great change, but it seems to me that one thing we agree on is that there is a very profound shortage of skills in IT, in computing and in engineering. It seems to me that in that context the fact that we have the worst record in Europe for the number of women employed in professional engineering—it is 8%—is really shocking. That is very important for three reasons. I will be brief. One is an issue of equity. Girls and women should have half the good jobs and the interesting jobs, now and in the future.

The second thing, which is much less remarked on, is that the kind of innovation we are getting relies on the whole on young men with narrow engineering degrees thinking about the future. I go around to these companies and they say, “Will it not be a wonderful future with the Internet of Things, where we can use the smartphone and turn all the lights off in the house immediately?” I say, “If we had a more diverse workforce, would we not be able to think of and tap talent for lots of different things?” If we want a creative industry, we need a diverse workforce.

The third thing is that all the reports I read say that there is a real public thirst for having more citizens involved in decisions about science and engineering. How are we going to do that with such a small proportion of women and girls in STEM subjects? I feel like there have been lots of fabulous reports, lots done, there is a wonderful report by the Royal Society on Visions for teaching maths and science. The Royal Academy of Engineering has a lot of initiatives. There are wonderful sets of initiatives; they all have targets in them. What we really need now, rather than thinking more about these problems, which I can talk to at great length, is some leadership. We need some targets and we need to have some kind of national force behind these things. We have now 30 years of reports about these problems. I think we understand them well but we need a bit of political will.

The Chairman: I am going to come back to you on the last question. If you can give us a specific recommendation that we can take forward on that, that would be extremely helpful. So you have notice that I will be coming to you. Does anybody else want to make a general opening remark?

Professor Brown: Not really. I am sure it will come up in discussion anyway.

Q15 The Chairman: We will kick straight into the questions. Mine, in a sense, follows on from what you heard in the previous session, which is: can you help sketch out for us the big picture on the level of change that is happening? How enormous is it? How positive or negative should we be about it? What are the broad implications? So if can you set the landscape, in a sense, at this stage for us that would be very helpful.

Professor Brown: Shall I start? Three points: one is that new technologies in many respects have changed the nature of global competition and one of the things that has been quite surprising is that we assumed that the knowledge economy, especially the global knowledge economy, would mean that the world would be divided between head and body nations. We being one of the head nations, we would do the thinking for the rest of the world and it would take China and India a very long time to catch up. But what we see is the way in which new technologies have allowed China and India to leapfrog decades of development and come into key areas of competition with western economies, which I do not think we have been prepared for. One of the real dangers of that is that we have more of the workforce in high-skill but relatively low-wage employment. That is a fundamental challenge for us in the UK and elsewhere in terms of this sort of agenda.

The second point is that we have made the assumption that we need many more people with creative skills. We need some for sure. But what this fails to understand is the nature of capitalism and the nature of productivity. If you look at the early 20th century, what you see is the rise of mechanical Taylorism—in other words, it is the capturing of that craft knowledge that was converted into the production line of Ford and others that was the driving force of productive change during quite a lot of the 20th century. What we are now seeing is what might be called the rise of digital Taylorism, whereby this is the fundamental change to office and professional work because what new technologies allow companies to do is to align their business practices globally. What they were trying to do is to understand how they engage in their business: what they are actually doing. If they can capture that, they can describe it. If they can describe it, they can standardise it. If they can standardise it, they can digitalise it. If they can digitalise it, they can put it into software and if they do that they can transport it anywhere in the world in terms of work. I would argue that we are seeing increasing segmentation of the knowledge workplace, if you like, where you have this cadre of talent at the top who will have permission to think, who will be doing the kinds of jobs we would normally associate with the knowledge economy, but many others will not be in that situation.

The third point I want to make is quite different. That is the possibility—and this is kind of blue skies—of the democratisation of the means of production, by which I am talking about the implications of 3D printing. What are the implications of technologies being used on the ground—the digital commons idea, the shared economy ideas? What that does is suggest that we need to think about the kinds of mindsets and skill sets that are required throughout the population. In other words, technologies are the tools of citizenship as well as in terms of what is needed for the economy itself. So there is something interesting going on. We do not know the answer but it is something that is worth exploring alongside these other broader points.

Professor Manning: Lord Chairman, you raised one issue of how fast or slow it is going to be. Clearly since the Industrial Revolution there have been massive, massive changes and there will continue to be those changes. I do not have any particular reason to think this will necessarily be faster now than in the past or slower. I know there are the techno-optimists and the techno-pessimists and there are people who feel confident, but I am not sure I feel so confident. If you look at productivity growth at the moment, it does not look so fast. If you look at some people describing some of the new innovations, you think, “Wow, that might be a bit more dramatic”. But my best guess would be that it is going to be steady as it has been in the past but continued. It is a wave that you have to ride; it is not a wave that you can hope to stand up against—you will just be swept away with it. So that is the challenge.

I think you also asked the question: is this good or bad? The thing is that new technology has the power to be good because it allows us to do everything that we could do before and some new stuff. New technology has been the source of all increases in prosperity since the start of the Industrial Revolution. It is primarily the only driver of increases in prosperity but it is not inevitable that technology is a force for good. People can use it to do bad things: in an extreme form invent new weapons to kill each other in more horrible and more efficient ways than before. Or they can use it to make gains at the expense of other people—for example, the high frequency traders that were described in Flash Boys. It is the job of people like yourselves I guess to make sure we have a system in which new technology is used for good, and the distribution of that is inclusive so that everybody generally benefits from it. There is the opportunity for that, and to make sure that opportunity is seized is the challenge.

Professor Wajcman: I agree with what has been said. I think what people are worried about is the power of a small number of big corporations and the sense that they are setting the agenda, so that there is daily discussion of Big Data and the Internet of Things as I go around these companies—there is an agenda being set, whether it is self-driving cars or whatever, and there is a sense that the public and citizens do not have the skills and competency to be driving the direction of research and development. It seems to me that is a big concern. I feel quite optimistic, but I am worried about the extent to which we are in the driver’s seat in terms of these changes.

The Chairman: Yes, that makes sense, thank you.

Q16 Lord Haskel: First of all, I have to declare my interest as a board member of the Parliamentary Office of Science and Technology and the honorary president of the Materials Knowledge Transfer Network of the Technology Strategy Board. My question follows on from what you have been saying. You have described what changes we have and the transitions that are taking place. How do we adapt to it? How do we adapt so that we can continue earning our living?

Professor Brown: I think there is a rather big difference between talking about digital skills and skills for the digital economy.

The Chairman: Could you define that for us?

Professor Brown: Digital skills, for me, conjure the idea of a high-tech toolbox. How do you use the internet? How do you use wi-fi? How do you use basic video editing and such things? It is all rather important but it strikes me that the agenda that has to be addressed is much wider than that. The skills for the digital economy or the knowledge economy, or whatever you want to call it, have to be much broader. I have interviewed many multinational companies’ HR but also operations directors and what always strikes me anywhere in the world is the same thing. They say there is no real shortage of technical skills. It is not their issue. They feel that if they want scientists or mathematicians, they can go to Russia—there are many places that they can access them. But the problem they always state is the problem of mindsets: the problem of people who are proactive, who can work in interdisciplinary and cross-cultural teams and who have international experience of that. It is those sorts of issues that are really important. So when we talk about the skill sets required to adapt for the future, we have to have a broad-ranging understanding of both the hard currencies and the soft currencies. Language skill is a major problem for the UK. If you talk to virtually any of these people in these organisations, they all have at least two or three languages. So we are at an immediate disadvantage as far as that is concerned at that level.

Lower down—I get to one of the points I was probably going to make later but I might as well say it now—it strikes me that the whole way in which we structure the educational system completely undermines the development of those mindsets, that risk-taking behaviour, that we need in this country. You are encouraged to play it safe. The reason is that we have such a high-stakes competition. I have kids who are 17, 19 and 21. They are in the system. You can see how you respond to them about risk-taking, about the need to jump through the next hurdle, to make sure you get the appropriate grade. I think a lot of the kids, by the time they get to university, are totally turned off. They do not know what the purpose is apart from going through the hoops. There is a real issue of how we deal with the high-stakes system and of course that high-stakes system, going back to what has been said, is based on inequality. When the stakes in terms of labour market are so huge at the top end, as opposed to the others, then everybody wants the same thing. That increases competition right at the top end and basically it means that more and more people are struggling to find a way of reaching those top jobs, whereas if we could do something about the state of inequality within society, the state of inequality within the labour market, then what you will find is that more people will want to do apprenticeships. More people would want to go into technical areas because the labour-market signals out there are not the ones we really need to adapt to this world in which we are now entering.

Professor Manning: I would just say that increasingly our prosperity depends on the skills that we have. Those are the resources that we have in the UK. So we have to make sure that we have people with the skills to produce things that other people want to buy. I go back to the point that Phil made about digital skills versus skills for the digital economy. When you get technological advance in some areas, that becomes a declining share of employment. So ironically employment moves to areas where digital skills are used less rather than more. So we would see, because of lower productivity growth in things like caring jobs, we are going to need to more people there, more professional care and so on and so forth, which will involve some element of digital skills but not a huge element. I just caught Martin Wolf at the end talking about the education system. Our biggest failing has just been giving people basic skills—numeracy and literacy—over many, many years and I think that will remain the case. Of course we need people to have digital skills but we should not get too preoccupied by that or divert too many resources towards that at the expense of this other big problem just because it has been there for so very long.

The Chairman: By the way, you do not all need to answer every question. Professor Wajcman, do you have anything to add?

Professor Wajcman: I was just going to say that the Royal Society report, like most of these reports, really does argue, as a lot of us have been arguing for years, for a very broad-based education. The issue of the Baccalaureate has been going on for as long as I know. I think there is a sense that a broad education is the most flexible education and there has been agreement about that. The issue is how to get on with it.

Q17 Lord Aberdare: I was just going to ask about how the UK compares internationally. Professor Brown has already mentioned some of the contrast between us and China and India, but are there countries we should be looking at? Are there case studies of countries that have been more successful than we have in these areas? What can we learn from what other countries are successfully doing in this whole area?

Professor Brown: I think one of the places to look might well be Singapore and I say that because I am doing some research in Singapore at the moment, funded by their Government, because they are worried about precisely what you are talking about here. The reason I have been interested in Singapore is that they have probably the most sophisticated skill-formation system in the world and so I have been trying to understand how that works. But because they are so dependent upon multinational companies, they are worried about those companies now hollowing out employment in Singapore. They keep the top echelons that are high-cost and require high skills in Singapore, but the other jobs might disappear or there is a lot of cost pressure on those employees. Their real problem is that right at the top end the companies see a talent deficit in Singapore. In other words, the locals do not seem to have the kinds of skills we have been talking about in order to take those global jobs and so they are dependent upon foreign talent. That is a real issue for them and one for us. What is quite interesting, of course, is that Singapore has those issues and yet in PISA it is right at the top. If you look at all the league tables, it is almost always right at the top and yet underlying it there are these same sorts of issues that are concerning them. We are not alone, if that is any help.

The Chairman: That has cheered us up.

Professor Brown: It makes us feel a bit better, I suppose. What I would throw in, just because I find it intriguing rather than anything else, is that South Korea is digitalising its entire school curriculum and it will be complete by next year. All their education will be based around tablets and what have you, rather than pens and paper, and the question is whether we have reached a stage where we would be willing to give up our pens and paper for the same kind of initiative and what the benefits and downside of that might be.

The Chairman: That is the interesting question, is it not?

Professor Brown: Yes, the downside as well. It is always the thing to explore. The unintended consequences are always as important as the things you are trying to achieve.

Professor Manning: The Singapore economy is based around a very liberal low-skill immigration regime that I do not think is relevant for the UK economy. They do not have to worry too much about the skill of who is doing the low-skilled jobs in their economy, the skills that those people have and how much they earn, but in the UK we have to worry an awful lot about those because they are going to be our citizens. Again, that is going back to saying I think that the issue is down there, which is on things like PISA where we perform extremely badly, in the lower tier, and it is just basic skills.

Professor Wajcman: If I can disagree—

Professor Manning: Yes, please.

The Chairman: It is unusual with a group of academics.

Professor Wajcman: My impression in terms of the high skills is that, certainly from what I read, there is a shortage of engineers, which is why there is a visa problem in Britain in terms of bringing in engineers. That is why in America there is a lot of discussion in Silicon Valley about the visa issue. It does seem to me that there are shortages of skills in places. I have looked at the figures recently and one of the things is that quite a lot of very good British-trained engineers end up in Silicon Valley. One of our concerns is this moving workforce and how we keep those. How do we make an environment here so that we keep the very best of our own rather than everyone shifting along with this importing?

The Chairman: What is your view of why that happens? We know the visa issue, but what is the issue of us losing our engineers to other places?

Professor Wajcman: Unfortunately, it is to do with scale. I have just been at Georgia Tech. The scale of Caltech and Georgia Tech and MIT is just phenomenal compared to what we are able to do here. I am sorry. I was absolutely going to be positive, but I think that is true.

Q18 Lord Giddens: Can I ask you just to elaborate on a few aspects of implications for the labour market of the technological changes that are happening? Judy, I think you were here, but we talked about this issue with Martin Wolf and there are two things that arise. One is the issue of productivity: what it means that productivity seems relatively stagnant in an era of what appears to be very high technological change. I was quite taken with what you said originally about the emergence of a new kind of economy, because in a digital economy things are basically free and they can be shared across the world and they can be produced locally for a global marketplace for the first time. When we were talking with Martin I mentioned the Jeremy Rifkin book. If you pick up a book by Jeremy Rifkin you tend to think, “Oh, this is going to be exaggerated,” but I think it is interesting. There is something different going on here that could be quite transformative and I would like to hear what your opinion is. I think the issue of inequality needs teasing out a bit more for us because it is clear that there are big structural inequalities. Are they primarily winner take all, as seems to be indicated? Surely not. There must be several sources of the emerging pattern of inequality in the labour market and it would be useful to hear any comments that anyone wants to make on those two issues.

Professor Brown: I would be a bit more positive about your first point than the second one in the sense that I have also been looking at Rifkin’s book. There are a couple of others out there. There is Brynjolfsson’s book as well—The Second Machine Age, I think it is called. That seems to me to be a positive. I think the way in which new technology enables things to be driven down to the ground level and then allows for initiative at that level is very important. The issue then is how that leads to new forms of employment and what kinds of skill sets you have around that, but also who is likely to engage. There are likely to be major inequalities even at that level about who engages, who has the networks and who is able to use that initiative at that ground level. I would suggest that this is something that is worth exploring. I disagree with Rifkin. I think he is overly optimistic about the possibilities of all this because he is basically ignoring the underlying inequalities and I cannot see them shifting that much as a result of the collaborative commons. We already know about crowd sourcing and the way in which that is being used by companies to basically get free labour a lot of the time. You have a competition. The winner wins and everybody else’s labour is free. That is how it sometimes works, so I think we have to be realistic about what might emerge from that.

Q19 Lord Haskel: Could you comment on the fact that this destroys whole industries, the fact that things become free and available to everybody? If you look at the recording industry or the music industry and so on you have fantastic—

Professor Brown: Yes. I think the problem with this zero-marginal-cost argument is that it works in some areas but not in others. What is intriguing about companies is the way in which they use branding and other forms of identification of quality and need and desire that prevent that zero-sum outcome for them, but it will vary by sector. I think that is an important thing to say about all our discussions. The sectoral level and the cross-sectoral level and the new areas of interdisciplinary activity are the points of opportunity because they are the points where you can lock in, for example, to global value chains. Companies are constantly looking for new ideas and it is those points of doing different things in different ways that they are particularly interested in. If we have the technical skills along with some kind of embedded capability within some of those key fields, that will certainly work to our advantage.

Professor Manning: If we look at the way the structure of employment has been changing, we have seen big growth in employment in occupations that are traditionally well paid and smaller growth, but still growth right at the bottom and big falls in jobs in the middle, typically jobs in manufacturing that were reasonably well paid and mid-level clerical jobs and so on. I think the explanation for the way in which the inequality has been evolving is just simple demand and supply. There is a little bit of winner takes all in some areas at the top, but there is nothing else mysterious. Well-paid occupations have seen faster growth in the demand for their services than other people.

As I said, I think that weak productivity growth at the moment in the UK is a cyclical phenomenon connected to the crisis more than any statement about the impact of technology. Through the crisis, productivity growth in the US was extremely rapid and the discussion there is entirely inverted, but obviously the underlying technological changes that are happening are essentially the same. As I have said before, I think we would go back to productivity growth of 2% to 2.5% as we have had for a very long period of time. That very steady cumulative change will destroy whole industries over 30 or 40 years, but it always has done. Although there are always losers from that and the losers are often very visible, there are also the gainers. The gainers in the past, who have been much more diffuse and much less visible, have always outnumbered the losers. That goes back to what I said before. New technology has been the only source of our increased prosperity over 200 years.

The Chairman: Yes. Professor Wajcman, anything to add?

Professor Wajcman: Only that I think pay inequality is not literally connected with technical skills. I think we all feel, after the banking crisis, that there are lots of ways in which, where people are rewarded for pay, it is not clear that the pay should be at that rate. In a future society where there are even more people in the service sector, it is partly a cultural decision about whether we will revalue caring labour and other forms of work and how we think about what we pay for particular things. It may be that, if we are in a different future with a different service sector, we will value skills in a different way and pay for them accordingly.

Q20 Baroness O'Cathain: How do practices such as offshoring impact on the labour market? I think we know, but I am of the view that onshoring can begin again if we get the proper skills here because there are social problems in terms of offshoring, particularly the point you made about our language skills. Will innovations such as cloud computing and automation negate the need for offshoring?

Professor Brown: I wish I could agree with you all the way. There is no doubt that one of the aspects of the rise of some of the emerging economies—China, India and elsewhere—is that as they look for access to European markets there is an opportunity for places like Britain to be a centre for research, development and so on. Tata, in terms of Jaguar, is a very interesting example of that process. Having said that, however, I think we always have to remember that from a corporate perspective this is always going to be a quality/cost equation. The price issue is always going to matter. They will only move here if they want access to the regional market or they think that the quality standards cannot be achieved elsewhere or there is less of a price differential. The costing of these things seems to be critical for companies. One of the dangers is that we might see some of the call centres come back—they do not work very well—but we might see more high-skill work being offshored. As the quality standards and benchmarking of quality become increasingly globalised and spread well beyond China and India, companies are already looking to follow the sun in terms of their design, because basically they need to speed up the process of innovation. How do you do that? Well, you just have teams working the three areas of the world who are basically working on the same project and their digital skills are vitally important.

Baroness O'Cathain: That is the point. Does it hinge on digital skills? Certainly one of the reasons why I think we are looking at it is the fact that we are really concerned about being uncompetitive internationally because our digital skills do not match up with south-east Asia and South Korea and places like that. If we could improve digital skills here, would we get back the business?

Professor Brown: My view is you can get back some but certainly not all because a lot of this is based on cost and access to markets. You have this concentration in one or two parts of America, Silicon Valley for example, and the reproduction of that elsewhere is less likely. One of things we probably need to explore is the nature of global value chains. If they have high-skilled labour around the world, it does give these companies more choice about where they move to. The question then is: can we create clusters of embedded capability in key areas of digital activity that would allow these companies to recognise that this is a really good place to go? One thing is for sure: these companies are constantly looking out—for example, elite universities where the ideas are. So if they hear about ideas in Cambridge or Cardiff—LSE, to include everybody—then this is basically how they begin to develop these kinds of connections.

Professor Manning: I think offshoring is driven primarily by differences in labour costs and as China and these other places come up you expect to see less of it. But another important point is that offshoring is just trade, really, and it is just trade in things that we are not used to being tradable. That is facilitated by the improvements in ICT. But there is a long-run historical trend towards economies being more open and trading a higher fraction of what they produce. I do not think the response to offshoring is to think, “We want to do that here and not trade”. It is more that we have to have things that we can sell to other countries. Trade is based around specialisation and this goes to back to what the skills are that we need to have to make things that other people are going to want to buy.

The Chairman: We want to go on to that now and what I suggest, because we are quite tight on time, is that Lord Holmes and Lord Janvrin take their questions as a collection and we will get you to answer at one go on all those. Then we will come back to question of immigration.

Q21 Lord Holmes of Richmond: Thank you. Good afternoon. I think we skated around this a lot so feel free to answer in bullet points. What do you think the future workforce needs to look like to ensure UK global competitiveness?

Lord Janvrin: I also have to declare my interests, having not done so the last time round. I am Deputy Chairman of HSBC Private Bank UK; trade envoy to Turkey; member of the advisory board of the UK India Business Council; Chair of the Royal Foundation and the Entente Cordiale scholarship scheme; and a trustee of the National Portrait Gallery and the Gurkha Welfare Trust. I want to come back to Professor Brown. You mentioned the distinction between digital skills and skills for the digital economy. I think we will keep coming back to this. You mention mindset. What kind of education system do we need, or how do we adapt the education system, to get into that mindset change that you were talking about? I know that is a very broad issue but I think we have to get into it.

The Chairman: Yes, that is a clear theme here.

Lord Janvrin: It is part of what Lord Holmes is asking.

Professor Brown: I go back to what I began to mention earlier. Our current education system is simply not up to the challenge of what we are talking about. I see my own children go through this process where the teaching for the test, the encouragement of acquisitive rather than inquisitive learning, seems to be what defines the system. There is no space to think. There is very little permission to think within our current education system. There is no permission, in a sense, allowed within our society for people to think because basically the competition is too intense. For example, if one of the kids comes home and says, “I got a B”, you hear, “Oh, that’s a bit disappointing”. I would have been delighted with a B in my day. It is like that: unless you get A*s you are not really achieving. What we need to think about is how we move towards challenge-based learning, for example. So you start if you like with social problems and you start with problems and issues that are of interest to the students. Then you use whatever kinds of resources you need—you might bring in different disciplines—in order to examine a particular issue. The teacher might later on in the educational experience, in the process, recognise their own limitations in not fully understanding these issues and that is really important for students to learn as well as how you work in a team and how you seek out knowledge. I would suggest we need a fundamental root and branch rethink and it goes back to something that was said before. Ultimately International Baccalaureate, scrapping A-levels, has to be the way to go. We must have a broader curriculum. We must change our forms of assessment to allow a different kind of mindset to develop so that when, for example, they get to university they are fully engaged whereas what you have to do is find a way of turning them back on to education when they get into university. There is something fundamentally wrong.

Professor Wajcman: I completely agree with that but I think there are a lot of initiatives going on that we could learn from. I was reading yesterday about an American college called Harvey Mudd College in California, where the woman Dean turned round the number of young women studying computer science in an incredibly short space of time, doing all the things you suggest: making them do problems; taking different approaches. Young people are on their social media all the time. They have skills at some level or other and the issue is how to translate the everyday usage of those screens into more creative ways and to make them realise that these are skills that can translate. Jessica mentioned the example of art and design schools. I think we should have more initiatives at that level, saying, “Let’s look at art and design”. Lots of people there will not have maths A-levels or whatever, but there are loads of conversion courses we could do with adults. I am rather frustrated with the notion that we are going back to eight year-olds and I am going to have to wait again for what happens with the eight year-olds. I think we could have a lot of conversion courses with graduates, like we have law conversion courses now. Lots of my graduates do that. Why can we not have those? I have talked to people about this. It is true that you cannot in a year learn electrical engineering, but you can learn a lot of software programming. There are lots of things you can learn if you are bright and able. We would get not just more young women, but young men who did not do maths and engineering. We would get different sorts of people with more rounded skills. I think there are lots of industries we could explore.

The Chairman: So you have two recommendations.

Q22 Earl of Courtown: I think you have covered much of this question. Professor Brown, at one point you said there is no real shortage of digital skills but I think you were talking about it on a worldwide basis. Bringing this back into the UK, we are going to have a short-term need of increased high-skill immigration. Would you all agree on that? What will be the effects of this over the medium term and long term? Before I finish, I have a comment on what Professor Wajcman said in her opening remarks on a totally different area from my question but particularly on the gender imbalance: I thought that was really interesting and shows a way to sell this gender imbalance and how we can improve it in some way.

Professor Manning: On high-skill immigration I think we have to be careful. The problem is that we have had a longstanding problem with providing specific skills in the UK economy because individual companies do not want to pay for the training themselves and they cannot get their act together well enough to agree on a system. So then it is very attractive option to say we are going to take someone whose training has been paid for by somebody else. But I think it is a dangerous route to go down. The failing is really with the training system and these are typically skills that are quite specific to particular industries.

Earl of Courtown: This is where conversion issue you were talking about comes in.

Professor Manning: Yes and it is used quite a lot, particularly in the case of IT people. I know the visa regimes are not meant to be a source of cheaper labour but I think in practice they are. I think they are meant to pay what is the prevailing wage but I think in the practice that is very hard to enforce and is not done. So I think companies tend to lobby for it because it is a very attractive option for them, but I am not sure whether for the wider society it is such a great option, although I concede there are going to be short-term bottlenecks sometimes.

Professor Brown: I completely agree with that. Microsoft is now getting desperate and is suggesting that it will offer, I think, $10,000 for a STEM visa in the States to be used for training for STEM for Americans and $15,000 for a Green Card. So it is still good value for them in terms of being able to do this. But when you think about it, we have so much graduate underemployment in this country. In terms of conversion courses, come on: there must be thousands of graduates out there willing to go on these conversion courses if there was some kind of loan system that would allow that. They do not want to add to their current debts, but some way to give them a chance to do this would be a worthwhile thing, I would say.

Q23 Lord Kirkwood of Kirkhope: Could I turn briefly to inclusion and exclusion? I listened with interest to Professor Wajcman’s very positive contribution towards the gender question. Even at this early stage in the inquiry I think the Committee has been struck by the need to do something about that. I was completely ignorant of the scale of the imbalance and I think you have made a powerful contribution. But there are also the perhaps more developed arguments about the unequal impacts to which Martin Wolf referred in the last session on people with disabilities, people who are older and the other protected characteristics under the 2010 Equality Act. Do you have any view about that? Another dimension I began to pick up on in the course of this session is that an unequal impact might, as Tony was saying, be about the scale of unemployment to an extent. We may have to consider it by way of dealing with unequal impacts. I think we can bang the bit about the gender imbalance rather strongly but in terms of these other lists of characteristics that we have to pay attention to, and maths skills and inequality on a large scale, do you have anything that you can add—help us to suggest what we should be thinking about—by way of recommendations?

Professor Brown: In the digital divide that we have already talked about, that is one thing that is real. That is one thing that is really real and in a sense it is just repeating what we know, have known for a very long time, and that is that we have to do something to narrow the inequalities that we have in access to education and opportunities and—crucially—access to technologies. Sorry, but I might as well use my own kids again. If I think about the access they have as opposed to kids who are 100, 200 yards down the road, there is no comparison. There is a massive divide in access to that kind of knowledge and that sort of usage. So we have to do something at that level—there is absolutely no doubt about it—in terms of those social inequalities. One other inequality in relation to this that I think is also important is age. When you think about the older kind of population in terms of access to basic amenities—banking is an obvious example—this is where for example digital literacy really works, certainly for that older population. That is really important. The other thing in relation to age that intrigues me is I remember sitting in a group discussion of IT professionals and there was a massive difference between the old ones and the young ones. The young ones were saying, quietly, “They haven’t got a clue about new technologies. They don’t know what’s going on”. So I think it is one of those areas where the older managers, senior managers, have a huge amount to learn from their junior colleagues. Most of this is top-down but there should almost be a day where there is a complete role reversal where the older managers and staff learn from their junior colleagues because they are the ones who really understand where these technologies are going.

Professor Manning: On age, it is very hard to reskill older workers whose skills have been reduced in value by technical change. I think it is much more about making sure that when they suffer from the loss of demand for their work the consequences for their lifestyle are not as great as they are. But I think there is also a danger in the fact that our eye is drawn to those sorts of examples; they are very visible. But if you look at the way the labour market has been changing, it has entirely been to the benefit of older relative to younger workers. The ONS last week produced this statistic that said in 1975 earnings peaked at the age of 28; now they peak at the age of 38 and it is younger workers who are the ones who have been finding it harder to do well in the labour market, as a whole, not older workers. This goes back to the point that education cannot stop at 18. We have to find a way of giving young people, particularly at the lower end, skills that are valuable.

Lord Kirkwood of Kirkhope: In terms of people with disabilities, do you think we would be safe to draw on the point that was made earlier in the afternoon about the intuitive nature of the devices overcoming inaccessibility in different ways? Obviously there are different aspects, different categories of disability. But can Governments and policy-makers start insisting on this and threatening people perhaps with the Equality Act if they do not do some of this stuff properly, otherwise people with disabilities are going to be inevitably left unable to take advantage of the opportunities?

Professor Manning: I think so with physical disability. I think the big challenge is going to be mental disability, which is completely different.

Q24 Baroness Garden of Frognal: We are in a sense back where we started now. I think this is a key issue that even the younger generation still seems to see certain subjects at school as being ones for boys and ones for girls. How do we break through that? There are some tremendous role models of women and girls in STEM subjects and in ICT. How do we engage girls more in these critical subjects, which you set out so clearly?

Professor Wajcman: There are lots of fantastic examples and I can see I should send some of them to you.

Baroness Garden of Frognal: That would be helpful.

Professor Wajcman: It is a range of strategies and I would also like to say that there are different kinds of engineering and computing and software and IT. So there is not one solution for all of them because we are talking about different skills and it is the whole range of things, from teaching in different ways, changing the curriculum, role models, shifting the culture and teaching at different places in a more interdisciplinary way. I know I have spoken mainly about gender, but I was really trying to make the point about the narrowness of engineering and computing skills. What I do not want is what happens in India, which is that boys at the age of eight are just put through an education system where they do nothing but hard science, go to those big tech schools, then the best of them end up in California. It seems to me that that is not a model we want to follow. We want to have a different kind of education system that will include different kinds of boys and girls and give us different kinds of technologies so that we can make the world in a rather different way than it is being made currently by these big corporations.

Q25 The Chairman: Thank you very much. Final question: we have already had Professor Wajcman’s recommendation, I think, so maybe this is to our other two witnesses today. Can you give us a specific recommendation you think we ought to be considering for our report? We are going to ask that of all our witnesses because obviously there is no point in just producing reports without clear recommendations for action, particularly at government level. So is there anything specific you would like to put on record for us today?

Professor Brown: I would expect to have said something about the labour market but I am not, I am going to say something about the education system. I think we should look to digitalise some of the school curriculum and to go for much more challenge-based approach education of blended learning at all levels, because I think it is going to come in anyway and we need to embrace it. And I think we should scrap A-levels and move to an International Baccalaureate to allow this kind of development and to avoid that narrowness of education that we have been describing.

Professor Manning: I am not sure that I am going to be very helpful because I feel I want to say something about skills and delete the word “digital”.

The Chairman: That is fine.

Professor Manning: I just go back to saying that the biggest weakness over generations of our education system is in basic literacy and numeracy among a sizeable fraction of the population and we should not lose sight of that. It is our single biggest problem.

The Chairman: Thank you very much indeed. That has been incredibly helpful. Thank you very much for coming. Anything else you can send us would be very gratefully received, so thank you very much. As for Professor Wajcman’s point, she answered our first question. In fact she has given us two points, I think, because she has given the stuff on women but also the conversion courses. So we have four for the price of three, I think. So thank you very much indeed.