DWE0023

 

Written evidence submitted by the National Foundation for Educational Research (NFER)

 

  1. NFER is the UK’s leading independent provider of educational research.

 

  1. NFER is leading a five-year research programme, The Skills Imperative 2035, funded by the Nuffield Foundation, to identify the essential employment skills people will need for work by 2035. NFER has significant expertise in the post-16 education and training sector, which informs vocational and technical education policy discourse through research, conference presentations, consultations, contributions to policy and practice development, and knowledge exchange through networking.

 

  1. As outlined in the call for evidence, several megatrends are expected to shape the world of work in the coming decades. These include recent factors such as Brexit and the COVID-19 pandemic, as well as longer-term trends such as increasing adoption of technology in the labour market, and major demographic and environmental change. These are anticipated to change the role workers play in the labour market, both in terms of the jobs they do and the skills they need, with a greater demand for skills that complement the new technology.

 

  1. Understanding the types of skills needed most for work in the future, and how this demand will be met, is essential. However, currently, the nature of this transformation and its implications for education, employers and the workforce is not well understood and so these evidence gaps need to be filled.

 

  1. Without evidence-based long-term planning for an education that supports young people to develop the right skills, there is a real risk the current skills mismatch will be further exacerbated.

 

  1. This may lead to under-employment and unemployment in future, along with enduring social and economic problems. The consideration of this longer-term impact is essential.  We need to look at how this may affect different groups because commentators suggest those most likely to be impacted will be the lower paid, the less educated, the vulnerable and young people.

 

  1. Insights from our five-year research programme, The Skills Imperative 2035:  Essential Skills for Tomorrow’s workforce, funded by the Nuffield Foundation, and specifically our literature review, The Skills Imperative 2035: what does the literature tell us about essential skills most needed for work?[i] highlights that the Fourth Industrial Revolution is transforming the face of employment and reducing the shelf-life of employees’ existing skill sets, with potentially dramatic effects on the economy, society and individuals.

 

  1. Our review focused on what the world of work will look like in 2035; which essential employment skills will be in demand; and how do we prepare to meet this demand?  The review highlights that several areas will see growth – including natural and applied sciences, digital, information and communication, education and health and social care.  Declining sectors include manufacturing, production, retail and administrative/secretarial.

 

  1. The review of the literature identified a range of skills which will become more important in the face of technology.  These include analytical/creative skills (such as problem solving, decision making, critical thinking, analysis, and innovation/creativity), interpersonal skills, self-management skills and emotional intelligence skills.  Both the education system and the workplace play important roles in fostering these skills, but more focus is needed on developing these essential employment skills.

 

  1. Our second suite of reports (to be published on 13th October 2022)[ii] highlight the potential impact of these megatrends on the size and composition of the labour market. The findings outlined in these reports are a culmination of a series of future labour market projections run by The Institute for Employment Research at Warwick University, working in collaboration with Cambridge Econometrics.

 

  1. The projections provide the following insights:

              The economy is changing slowly, but steadily and inexorably. By 2035, the structure of the labour market will have changed substantially.

              Brexit and the pandemic caused the economy to contract sharply, but it will recover.

              Millions of jobs are likely to be lost due to the adoption of new technologies in the labour market by 2035, but new roles, particularly in education, health and care services, are likely to cancel this out.

              There are projected to be 2.6 million new jobs by 2035, the majority of which will be taken by females.

              Employment in the health sector is expected to increase the fastest, with around 369,000 new jobs by 2035.

              The sectors with the largest employment declines will be in manufacturing: metal products (-41,000) and other transport equipment (-22,000).

              Almost all the new jobs created by 2035 will be in Professional and Associate professional occupations.

              Job losses will be focussed among blue collar manual occupations, especially in areas where automation is possible, as well as among less skilled white-collar non manual occupations.

              Trends for young people acquiring more and higher-level qualifications (replacing those generally less qualified people who are leaving the labour market), will continue.

              The UK economy will see a substantial recovery in Gross Value Added (GVA) output by 2035, following the sharp decline in the pandemic. The Construction (+2.4 per cent pa) and Trade, accommodation, and transport (+2.1 per cent pa) sectors are expected to lead the way.

 

  1. Given the cross-cutting nature of the challenges presented by these projected labour market changes, we recommend that a cross-cutting body is established, which reports directly to the Cabinet Office. This body would be responsible for working effectively across Government departments, with employers and other relevant stakeholders to ensure that appropriate strategies are developed to (i) understand the implications of these changes in more detail and (ii) set out how the Government, employers, training providers and the education system should respond, drawing on views and expertise from across and outside Government.

 

  1. We also recommend that industry leaders and representative bodies work with regional and local partners, including Mayoral Combined Authorities and local authorities, to assess what these projections mean for employment and output growth in their sectors or industries. These groups will also need to consider the business-critical occupations they will need in future and start planning what actions they need to take.

 

  1. As our findings indicate there will be an increase in employment opportunities for highly skilled Professionals and Associate Professionals. Unless plans are put in place and action is taken soon, there will be a shortage of skilled professionals available to fill these new opportunities.

 

  1. This includes the government working closely with school and college leaders to understand how teacher recruitment and retention can be improved and maintained.

 

  1. Our research programme is now building on this work and the outcomes of the previous literature review, to examine how the demand for skills needed by employers will change over the next decade and identify which employment skills will be most needed. We are also assessing what the potential supply of these essential employment skills will be in future, where skills gaps are likely to arise, which groups are most at risk of not having the essential employment skills needed and consider what actions are needed to support such groups to transition to other opportunities.

 

  1. An important focus for the next phase of the research programme includes consideration of the extent to which current education provision in England can support the development of the essential employment skill set that will be needed in future and in preparing young people who will be entering the labour market in the next 15 years. The scope of this phase will include the different pathways (including routes and qualifications) through which skill sets are developed for 16–18-year-olds as well as examination of other factors (such as socio-economic background) which may impact on skill development.

 

October 2022

 

                                                                                                                                                                        4

October 22


[i] https://www.nfer.ac.uk/key-topics-expertise/education-to-employment/the-skills-imperative-2035/publications/

[ii] Ibid i