Forecasting Future Skills Needs in Ireland

1. Forecasting Future Skills Needs in Ireland Presentation to Ministry of Education Ministry of Industry and Commerce And Delegation Colombia Dr. Catherine Kavanagh Department of Economics University College Cork, Ireland and Former Manager Expert Group on Future Skills Needs Forfas, Ireland

2. Background to skills forecasting in Ireland Expert Group on Future Skills Needs - today Skills forecasting at the economy level and some results for Ireland Skills forecasting at the sectoral level Overview

3. Irish education system served Ireland well and played a critical role in helping to drive economic growth – Celtic Tiger, skills met by qualified workforce, returning emigrants and expansion of higher education graduate numbers About 1995/96, evident there was shortage of skills, especially in some key sectors, (ICT) 1997 sees the establishment of the Expert Group on Future Skills Needs as part of a Business, Education and Training Partnership (BETP) It is an independent advisory body appointed by government Chair of Group is Dr. Danny O’Hare, Former President of DCU Key focus – partnership approach Group comprises representatives from education, employees, enterprise, government and State agencies Background

4. Initial objectives of the Group were as follows: Identify, in a systematic way, the skill needs of different sectors and to advise on the actions needed to address them Develop estimating techniques that will assist in anticipating future skill needs and requirements of the economy and the associated resource requirements Advise on the promotion of education and continuous training links with business at national and local levels Consider strategic issues in developing partnerships between the business and the education and training sectors in meeting the skills needs of business (Skillnets arose from this) Advise on how to improve the awareness of job seekers in sectors where there are demands for skills, of the qualifications required, and how they can be obtained Background

5. The Expert Group on Future Skills Needs - today • The Expert Group on Future Skills Needs is the central national resource on skills and labour supply issues for the enterprise sector • It is now chaired by a leading entrepreneur and business person – Ms. Anne Heraty • The membership consists of representatives from education, training, business, employees, state agencies and government departments • Crucially, the Department of Finance is represented on the Group, and there is international representation (OECD). Also, senior members from the two key government departments (DES and DETE)

6. The Expert Group on Future Skills Needs - today • The Objectives now of the Group are as follows: • Advise Government on projected skills requirements at national and sectoral levels and make recommendations on how best to address these needs • Advise Government on associated priority training requirements and the most cost effective ways of responding to them • Advise on any skills requirements that cannot be met internally at a given time and so must be met through inward migration • Advise on development on content and delivery systems that support excellence in training quality elsewhere and on adaptions necessary to incorporate such developments into training provision in Ireland • Respond to any request for advice from the Minister for Enterprise, Trade and Employment on training programmes that are supported through the National Training Fund • Ensure that recommendations made are adequately assessed by the relevant responsible authorities and periodically inform members of the EGFSN of progress made in the implementation of such recommendations.

7. The Expert Group on Future Skills Needs - today • The Group operates under the auspices of Forfás – the national policy and advisory board for enterprise, trade, science, technology and innovation • The Group reports make recommendations to the Minister for Enterprise, Trade and Employment andthe Minister for Education and Science • The work of the Group is supported by a number of state agencies and government departments including Forfás, FÁS – (the national training and employment agency), Higher Education Authority, Department of Enterprise, Trade and Employment, Department of Education and Science, Industrial Development Agency and Enterprise Ireland

8. Map of Institutional Interaction

9. EGFSN Development 5th Report Tomorrow’s Skills: Toward a National Skills Strategy Output Merger with NTAC 4th Report 5 Key Reports 34 Reports SLMRU/National Skills Database Established Sector Skills Focus 3rd Report 2nd Report 1st Report (ICT Focus) Established 1997 1998 2000 2001 2003 2004 2007

10. National Skills Database – circa 2001 • Operated by FÁS – the employment and training agency on behalf of the EGFSN • It is the central data gathering and data analysis unit for the EGFSN • Contains the following data Demand for skills • Employment data – from CSO, by sector, occupation and education • Notified vacancies – from FAS, Irish Times (newspapers) and www.irishjobs.ie • Immigration data (economic) – from DETE on work permits, work visas, etc. Supply of skills • Education and training data – from all educational and training providers (HEA for First Destination of Graduates report; HETAC and FETAC for graduation awards, all universities, institutes of technology, VECS, private colleges, FAS (for training info) • Job seekers data - FAS

11. Summary of Key Points on EGFSN • Independent body – with wide representation • Well integrated into wider policy system through Forfás • Grounded in evidence base provided by the National Skills Database • Strong link to enterprise development policy • Underpinned by social and economic theory • Practical and workable solutions

12. Skills Forecasting • Undertaken at two levels: • Economy wide – recent development • Sector specific – will continue to be important • There is a recognition that we need to understand all aspects of the labour/skills market: • Public and Private • Traded and Non-Traded

13. Tomorrow’s Skills Towards a National Skills Strategy in Ireland – 2020

14. Tomorrow’s Skills • So, what is it? • This was a major economy wide skills forecasting exercise undertaken by the EGFSN over 2005/2006 which led to the publication of the National Skills Strategy in March 2007 – first of its kind in Ireland • Sets out clear long-term objectives for Ireland’s education and training requirements to develop Ireland as a knowledge-based, innovation-driven, participative and inclusive economy with a highly skilled workforce by 2020

15. The Policy Context Source: Enterprise Strategy Group World-class Skills, Education & Training

16. The Overall Conceptual Framework Used

17. HOW? • Adoption of economic scenario for Ireland to 2020 based on econometric forecasting model • Quantitative projections of labour/skills needs based on sectoral profile, occupational profile and educational profile (DEMAND – analysis conducted for EGFSN by ESRI)) • Quantitative projections of labour/skills supply based on demographic projections, output from formal education system, net migration etc. – based on no policy change scenario (SUPPLY) • Qualitative projections on types of generic skills required in future based on a sample of occupations • The skills gap that would exist based on no policy change (DIFFERENCE BETWEEN DEMAND AND SUPPLY) • The desired outcome – a VISION that will drive enterprise development

18. Findings: the Current Situation • High percentage of labour force with 3rd level qualifications (27%) • High percentage of labour force with lower secondary education or below (37% - above OECD average of 30%) • Low levels of adult literacy, expected to decline • Poor participation in ongoing education and training (14% relative to EU average of 16.5%) • Skill shortages in a number of sectors • Strong educational profile of immigrant population – not being availed of

19. Findings: Changing Needs of Enterprise • Shifting sectoral profiles • Shifting occupational level profile • Increasing emphasis on generic skills • Occupational specific skills

20. Findings: Employment by Sector Source: EGFSN, ESRI

21. Findings: Change in Absolute and Relative Employment by Occupation from 2005 to 2020 Source: EGFSN, ESRI

22. Findings: Increasing Emphasis on Generic Skills • Basic or fundamental skills such as literacy, using numbers, using technology; • People-related skills such as communication, interpersonal, team working, customer-service skills; and • Conceptual skills such as collecting and organising information, problem-solving, planning and organising, learning-to-learn skills, innovation and creativity, systems thinking

23. Findings: Increasing Emphasis on Generic Skills Within Occupations There is likely to be demand for an: • Increasing Breadth of Knowledge • Increased Share of Knowledge Work / Reduced Share of Routine Work • Rising Qualification and Technical Skill Requirements • Importance of Continuing Learning • Significance of Regulation • Skills for Dealing with Others • Management Level Skills • Sales and Marketing Skills • Language Skills • R&D Enterprise Skills

24. Findings: Labour Market in 2020 • Labour Market 2020 – based on No Policy Change Scenario • 2.4m in labour force • 1.4m of current workforce still in labour force in 2020 • 640,000 extra young people from formal education • 310,000 = shortfall, demand outstrips supply • Must be met from immigration and increased participation • NOTE: Science, engineering, ICT, R&D skills integral to knowledge-based economy!!

25. The Gap • No policy change scenario, the demand and supply analysis in 2020 shows the following: • 5% of the labour force will have no formal/primary level qualifications • 19% will have below upper secondary education • 29% will have upper secondary education • 24% will have post-leaving certificates and higher certificate (certificate/diploma level) • 28% will have tertiary education as their highest level of education (honours degrees, masters, Phds)

26. Vision 2020 The Expert Group proposes a vision of a competitive, innovation-driven, knowledge-based, participative and inclusive economy with a highly skilled labour force by 2020

27. Findings: Supply and Demand in 2020

28. Objective Setting and NFQ • National Qualifications Framework (NFQ) is an agreed framework by which educational qualifications are classified • Classifications based on standards and on learning outcomes. Includes recognition of previous learning and work experience • 10 Levels: • 1 and 2 = Level 1 and 2 Certificate • 3 = Level 3 Certificate and Junior Certificate • 4 = Leaving Certificate • 5 = Leaving Certificate • 6 = Advanced/Higher Certificate (FETAC or HETAC • 7 = Ordinary Batchelors Degree • 8 = Honours Batchelors Degree or Higher Diploma • 9 = Masters Degree • 10 = Doctoral Degree

29. Specific Objectives for 2020 • 48% of the labour force should have qualifications at National Framework of Qualifications (NFQ) level 6-10 – from national certificate to Phd • 45% should have qualifications at NFQ levels 4-5 – awards equivalent to Leaving Certificate • Remaining 7% are likely to have qualifications at NFQ levels 1-3 (below junior certificate, while aiming to achieve higher levels

30. Achieving the Vision • Upskilling existing workforce: An additional 500,000 individuals in the workforce need to progress by at least one level of educational attainment above their current highest level • Second level completion rate: (the leaving certificate, level 4 & 5) retention should reach 90% by 2020 • Educational Attainment of population: Ireland should aspire to have 94% of the population aged 20-24 with upper secondary education (level 4 & 5) • Third level: The progression rate to third level to increase from 55% to 72% over the period 2020

31. Achieving the Vision • Report also highlights the following • Integration of immigrants into the education and training system at all levels • Career guidance and mentoring for those at work • Assistance for individuals and companies in identifying their skills needs • More awareness programmes that highlight the benefit of education and training • Education and training provision needs to be flexible and responsive to the needs of employers and employees

32. Sectoral Skills Forecasting • EGFSN identifies sectors of strategic importance – high growth and/or high employment (e.g tourism), those in decline, high value added etc. Also: enterprise can express a particular concern for a sector which it wishes the EGFSN to look at • Research methodology may change depending on enterprise sector. A lot depends on how defined the sector is and how unique the skills are to that sector

33. Sectoral Skills Forecasting • How? • Sectoral profile – is there a sectoral plan? • Analysis of skills/labour demand • Analysis of skills/labour supply • Normally, an international benchmarking element looking at how skills are being developed elsewhere or what are the emerging skills in leading countries in this sector? • Technology and market trends – goes beyond demand and supply • Recommendations in relation to education and training systems • Consultative process/sector expertise – helps information flows

34. Sectoral Studies Sectors which the EGFSN has examined include: • High Skilled Needs of the ICT Sector • The International Digital Media Industry: Implications for Skills in Ireland • The Skills Needs of the Medical Devices Sector • The Skills Needs of the International Financial Services Sector • The Demand and Supply of Skills in the Biotechnology Sector • The Demand and Supply of Skills in the Food Processing Sector • The Demand and Suppply of Skills in the Construction Sector

35. Horizontal Skills Studies • Skills Needs of the Irish Economy: The Role of Migration • Careers and Labour Market Information • SME Management Development Skills • The Demand and Supply of Language Skills • The Supply and Demand for Researchers and Research Personnel • National Skills Bulletin (Annual) • Education and Training Supply Bulletin (Annual)

36. Skills Bulletin Reports • Objectives • To provide the most comprehensive source of info on education outputs in Ireland • Raise awareness of current and possible skills shortages • Share information with all interested parties

37. Other Studies that Inform Skills Forecasting • Other studies that complement the work of the Expert Skills Group include: • FAS: Quarterly Labour Market Commentary – analyses data from CSO’s Quarterly National Household Survey once released • FAS: Irish Labour Market Review – annual review of labour market with some projections for employment, unemployment, and key economic indicators in the short term

38. For more information: Visit the following: www.skillsireland.ie www.skillsstrategy.ie www.forfas.ie www.fas.ie