Written evidence submitted by Dr Aleksandra Webb, Senior Lecturer, School of Business and Creative Industries at University of the West of Scotland (ITS0011)

Industrial transition in Scotland

 Summary

This written evidence draws on research undertaken by Dr Aleksandra Webb, Senior Lecturer at University of the West of Scotland, and Emeritus Professor Ronald McQuaid, University of Stirling, and includes content relevant to Question 1 and Question 2.[i]

Decarbonisation and the transition to a green economy have become central to policy agendas globally, including in Scotland, where there has been a shift from coal extraction to renewable energy production. This transition involves decarbonising domestic transport, heat industries, and incorporating carbon capture and storage. A green economy requires a shift from carbon-intensive sectors to sustainable, clean production and a circular economy, creating new green jobs while transforming existing ones.

The United Nations has highlighted the many employment and economic opportunities arising from a low-carbon society, particularly in renewable energy, energy efficiency, public transport, and food production. While green job creation has so far been limited, the focus in Scotland is on maintaining employment in green energy as part of a ‘Just Transition’. However, the green shift requires significant structural change, and lessons from past de-industrialisation can inform the transition to a green, digital economy. Developing the appropriate skills to meet the demands of this shift will be key.

The response provides illustrative case studies describing the demise of the mining sector in Scotland and the challenges following deindustrialisation. It also sets out learning from deindustrialisation of the energy sector, and the potential of a ‘skills escalator’ model as a tool in mapping opportunities for upskilling and reskilling for green and/or digital skills development.

Question 1. Which industries in Scotland have previously experienced industrial transition, and to what extent were these transitions effectively managed? In what ways did these historic transitions in Scotland differ in their causes, impacts and results? Relevant examples could include (but may not be limited to) coal, steel, heavy engineering, textiles, and shipbuilding.

The coal mining industry in Scotland expanded massively during the 19th and 20th centuries bringing work opportunities and life to towns and villages in Scotland, which become densely populated with the mining workforce coming from various parts of the British Isles. Thriving coalfield communities developed over time. Research estimates that at the peak of the industry in 1920s, there were more than 100,000 workers employed in the Scottish coal sector.[ii] The industry restructuring in the late 1950s shrunk this population to around 80,000.[iii] Progressively, and in parallel to a steep decline across manufacturing and heavy industry (including steel production and shipbuilding) in the 1970s to 1980s, a slow, almost complete deindustrialisation of the Scottish coalfields happened. By the early 1990s this was accelerated by the increasing competition from cheaper coal from abroad and falling domestic demand. In addition to globalisation, systematic disinvestment by the UK Government led to privatisation of the national coal industry, which subsequently collapsed with a closure of the last Scottish coalmine in 2002.

This event marked the end of a significant period of long-term economic development and employment security for a large number of workers causing devastating economic and social implications[iv]:

• Significant job losses shattered livelihoods and identity of workers and their communities.[v] This was particularly acute due to multi-generational households’ reliance of wok in the sectors, with entire villages locked into deep poverty, and people stripped from financial independence and life opportunities.
• Reduced employment prospects due to factors such as: long-term sickness; primarily limited to manual skills; poor public transport; and no access to alternative job opportunities.
• Reluctance, lack of experience and poor pay reduced re-employment opportunities. For example, this was seen particularly in the service sectors with greater job opportunities, and in areas with significant alternative job opportunities.
• Long-term sickness and social effects led to high economic inactivity rates, with an increase in alcoholism, substance abuse and addictions, anti-social behaviours, community decline, physical and mental health problems.
• Long-term employment effects in areas impacted. Research highlights that employment rates in coalfields areas are over two percentage points lower than the national average and five percentage points lower than in southeast England.[vi] Similarly, figures from the Office of National Statistics indicates that the percentage of employees per 100 working age residents is 55% in former coal field areas, compared to a UK national average of 73 %.  Additionally, manual workers are more likely to come from former coalfield areas (53%), compared to the rest of the UK (44%). Employees with degree-level qualifications are less likely to come from former coalfield areas (30%), compared to the rest of the UK (39%) and London (53%).
• The impact of the destruction of work, social spaces, housing, and local institutions continues to be felt by communities in these regions partly through poverty, health, and social problems and cultural stigmatisation, all bearing effects on employment.
• The long-term effects of deindustrialisation appear to have manifested a slow community decline long after the events, and continue to harm its vulnerable populations, albeit in indirect ways.

This illustrates how an uncoordinated change to industry and employment structures can lock the regions into relative decline for decades. Given the cost of this painful transformation, the current Scottish energy strategy explicitly states that Scotland wishes to avoid repeating the damage done by the deindustrialisation of central belt and wider Scottish communities around the 1980s through creation of employment opportunities through the development of the green economy offers. Government policy must actively lead industrial transition, with a clear strategy to divert the existing workforce to a new employment, or to pathways for reskilling and upskilling opportunities.

These lessons should be considered in a range of contexts, but particularly in relation to the oil industry in Scotland today. Further detail on the current oil industry in Scotland and threat of industrial decline is outlined in the response to Question 2.

Question 2. Which industries in Scotland today are likely to experience industrial transition or decline in the near future? The Committee is interested to hear from a wide range of industries including, but not limited to, oil and gas and manufacturing, as well as growth-sectors in Scotland such as space and data technology.

The transition of the UK energy sector to a green economy creates significant job opportunities. However, the sector requires support and investment in its transition.

It is estimated that the UK offshore energy workforce can increase by up to 50%, from 150,000 in 2023 to 225,000 by 2030 with new renewable jobs outnumbering oil and gas roles if a successful transition is achieved.

However, this opportunity faces significant challenges due to a predicted large-scale jobs loss resulting from the transition to a new production system. If the renewable energy sector does not expand substantially, while oil and gas activities are in rapid decline, up to 95,000 potential offshore energy jobs could be at risk. In Scotland, the offshore energy workforce could either grow by 25%, increasing from 79,000 to nearly 100,000, or shrink by approximately 40%, dropping below 50,000 by 2030 (Figures 1 and 2). 

The priority in the next five years must be focused on facilitating workforce transferability and training. This involves retaining the offshore oil and gas supply chain, its workforce and associated skills, while removing barriers that prevent workers from transitioning to clean energy jobs.

Figure 1 - UK offshore energy workforce, 2023 characteristics - Source: Energy Transition Institute (2023) Powering up the Workforce, RGU: Aberdeen

Skills Escalator Models

Developing relevant skills is crucial to supporting the UK and Scottish Government’s green ambitions, while also focusing on retaining or transitioning the maximum number of workers affected by job losses to new employment. There are various models that can accelerate skills development to meet employer needs. However, since industrial transitions often impact specific regions and demographics disproportionally, local and regional skills and training strategies are likely to be most effective in building a skilled workforce for new sectors and jobs.

A skills escalator model[1] has two main goals:

• Ensure a region has enough skilled workers in critical sectors for economic success.  
• Ensure that the skills and training needed to enter or progress in these sectors are available locally, at all levels.  

This model maps a pathway of skills progression, from basic to highly specialised and expert levels, and outlines educational stages from school to higher education and industry-based learning.  Learners can enter or exit at different stages of their career (for example, moving from school or college to work, or returning to formal education after industry experience, or transitioning to a new career). The skills escalator aims to map out the landscape of available options in a region, co-produced by multiple stakeholders including public policy experts, local governments, higher education institutions, vocational education and training providers, and industry professionals.

The skills escalator is a helpful model to:

• Visualise the progression of skills and different entry paths for individual development and upskilling. It is most accurate and useful when skills levels are accredited and matched with appropriate qualifications or industry accreditation (recognised nationally and internationally).
• Promote productive stakeholders’ discussion, engagement, and coordinated partnership activities centred on developing a highly skilled workforce while addressing the needs of specific industry and employers.
• Address current and forecasted skills gaps, guide workforce development and training strategies.
• Enhance funding-related and operational decisions for skills development programmes, particularly when skills gaps at certain level of experience and competency are acute, or when large groups of workers need to transition into new sectors due to industry or firm closures (for example, caused by the industrial transitions). 

The skills escalator has been successfully applied internationally across various sectors, such as, cybersecurity skills, software development, data analytics, and the circular economy. These examples of escalator models can be accessed at: https://escalate.projects.uvt.ro/results/reports-and-results/.

Below are three visual examples from Scotland, the Basque countries, and England:

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