Belfast Telegraph

Economy watch: September start to term gives chance to ponder future skills needs

Economy Watch by Andrew Webb, Grant Thornton Chief Economist

There is a shortfall of maths, engineering and technology graduates from Northern Ireland’s universities
There is a shortfall of maths, engineering and technology graduates from Northern Ireland’s universities

Belfast commuters, put-upon residents of the Holyland and the city's hospitality sector can't have failed to notice that this past week saw the start of a new university year, marking the end of 'back to school' season across our education system.

Schools, colleges and universities are all now getting on with the serious business of preparing the next generation for the world of work. While it will be several years until the latest cohort of university entrants find themselves looking for a career, we already have a good insight into what skills the economy will be looking for when this current batch of students and school pupils graduate.

In all the local economic development work that we get involved in, there is a very clear message that comes forward from employers. They need a mechanism through which to communicate their immediate and future skills needs to people and education providers.

This also needs to be met with a 'rapid response' system that can deliver these skills. At the moment, the principal tool that our policymakers use to estimate future skills needs and skills gaps across our economy is the Ulster University Skills Barometer.

The 2019 edition has just been published and gives a comprehensive assessment of where we stand on the current skills in the economy and what skills will be in demand in the next decade.

The Skills Barometer shows that health and social work, retail and manufacturing will provide the most demand for people over the next decade. Much of this demand comes from replacing people as they move into retirement or into other occupations.

So what skills levels will the future demand require, and are we producing it? The Skills Barometer concludes that one third of future demand will require a degree, with 10% requiring skills below level 2 (ie, a basic level of education).

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There is a challenge on the horizon - there is expected to be an oversupply of people at the lower end of the skills spectrum and under-supplies of people at level three upwards (ie A-level and above). Over the next decade the largest subject area in demand is medical-related subjects at 1,180 persons per annum, representing 13% of the NQF level 6+ demand.

Other subjects with a high demand include business and administrative studies (1,150) and mathematical and computer sciences (1,020).

However, the issue is not so much where the demand lies but where the gaps between supply and demand are. Engineering and technology are the most under-supplied subjects at degree level. There is an expected shortfall of about 350 per annum coming through the local universities.

Maths and computer sciences is also reporting an under-supply of about 300 people per annum.

At the other end of the scale, the supply of teachers is outstripping demand by about 200 a year. The system is also producing more doctors, lawyers and social science graduates than the labour market is expected to require. For anyone thinking about what degree course to pick, you would be in demand as a graduate engineer or computer programmer. At the level below degree, there are significant under-supplies in nursing, science and engineering.

A highly educated workforce is unarguably a key requirement to achieve a competitive economy. One of the reasons for explaining our lower productivity levels is the fact that there are significant proportions of the workforce with low skills. Although the situation has improved markedly since 2001 when almost a third of employed people had the lowest skills classification, there are still one in four employed people with low-level qualifications. There are big differences between the skills profile of the workforce and those without employment, making it more challenging to solve economic inactivity and unemployment. More than half the people out of work have the lowest level of qualifications.

Surely the large proportion of people with low/no qualifications is a historical hangover that will ebb away through retirements, right? Unfortunately not. We have been brought up to believe that Northern Ireland has a world-class education system but the evidence doesn't really support that view. Sir Bob Salisbury, appearing before the Northern Ireland Affairs Committee at Westminster in March, commented that this it is an "enduring myth" that NI has a world-class education system.

The proportion of school leavers with at least 5 GCSEs at grades A*-C (including English and Maths) was 70% in 2016/17. While this is vastly improved since the 50% in the early part of the 2000s, there remains 30% of every school year that aren't achieving this basic standard of post-primary education. Over the next decade this could equate to about 70,000 people coming out of education without having reached a basic standard.

Are we delivering the skills the economy wants? There is definite room for improvement.

In next week's Economy Watch, we hear from Paul MacFlynn of Neri

Belfast Telegraph