THE BLOG

The UK Skills Crisis Coverage Fails to See the Big Picture - A Changing World of Work

08/08/2014 15:24 BST | Updated 07/10/2014 10:59 BST

There is a new skills crisis in the UK. Over 600 business leaders were interviewed by The Prince's Trust and HSBC for a report that suggests that a skills crunch will hit the UK within the next three years.

Worryingly 35% of business leaders believe that their business may go under if they can't find the right people and 68% believe that British economic growth will be affected by this problem.

The UK employment market is taking on a strange new dimension since the economic crash of 2008 - economist David Blanchflower has suggested that this is the slowest recovery from recession since the South Sea Bubble. That was three centuries ago.

Companies like Balfour Beatty have found that they need to cast the net far wider when looking for new employees - taking on people with the right attitude and then training them on the job, with a focus on helping the unemployed back into work.

But there is a strange parallel universe where thousands of young graduates cannot get any job at all, because they have no work experience, alongside a desperate search for skilled people in the mid-level of management.

What is the answer? Unfortunately it is not simple. The aim of the UK government a decade ago was to ensure at least half of all young people complete higher education and this aim has broadly persisted even as education has become far more expensive since the last election. What is actually needed is a focus on the skills and education that are required for this modern labour market - rather than psychologically pleasing education targets.

Apprenticeships that are more than just shelf stacking will need to return, and in the short term it is likely that businesses can find the people they need from across the EU labour pool - though this will stoke the flames of the anti-migrant movement.

But beneath all these issues, the skilled graduates without experience, the need for mid-career workers with both skills and experience, the need to reintroduce better vocational training, there is a broader and even more important issue; what kind of country will the UK be in future and therefore what kind of workers will be required?

The present coalition government tripled the cost of higher education in the UK, yet anyone taking a wider view of where the UK sits in the world might suggest that this small European nation needs as many highly skilled people as possible. Nations such as China and India are no longer just focusing on churning out plastic toys and offering cheap computer programming skills - they have an enormous (and young) population that is becoming extremely skilled.

How does the UK compete when other countries offer workers with better skills and generally at a lower price? And this argument about the effect of large developing countries becoming developed and educated is playing out alongside technological innovation.

Google is already driving autonomous cars around in California. Audi is aggressively pursuing self-driving cars as the future of motor vehicles and Nissan has promised this to customers by 2020. That's less than six years away. What's going to happen to truck drivers, bus drivers, and cabbies when vehicles can drive themselves?

Technological innovation is destroying many lower level jobs - as it always has done. The Internet has created a platform where any job that only involves intellectual processes can be done anywhere in the world - and delivered by email or by some other electronic transfer. And people all over the world are getting more educated and are now readier than ever to migrate to where the opportunities are located.

This is a perfect storm scenario. Countries such as the UK, with a history of dominance and empire and educational excellence, need to look beyond the obvious. The world is going to be a very different place in just a couple of decades. Economic and cultural hegemony is not a birthright and can easily shift to the east throughout this century.

It is important to talk about the skills crisis in the UK, but to focus on the next three years with the assumption that some more training and work experience is the answer misses the point. What Britain needs is a focus on the next thirty years and how industry, government, and education will need to work together to ensure that the nation as a whole remains relevant and important in a world where China - and others with better human and natural resources - will dominate the global political and economic agenda.