Ambition 2020: World Class Skills and Jobs

1. Ambition 2020: World Class Skills and Jobs ANNUAL IED CONFERENCE Bournemouth7-8th October 2009 Michael DavisDirector of Strategy & Performance UK Commission for Employment and Skills

2. In a nutshell • Role • Our role is to provide independent advice to the highest levels of Government on steps required to achieve world class standing in employment and skills by 2020. • Remit to • Assess annually UK progress towards becoming a world class leader in employment and skills by 2020, consistent with the aims and priorities of the four nations • Advise the highest levels of Government on policies and delivery that will contribute to increased jobs, skills and productivity • Monitor the contribution and challenge the performance of each part of the UK employment and skills systems in meeting the needs of employers and individuals, and recommend improvements in policy, delivery and innovation • Promote greater employer engagement, influence and investment in workforce development • Fund and manage the performance of the Sector Skills Councils as key industry leaders in skills and employment.

3. Ambition 2020: Contents and Structure Progress: How Are We Doing? Raising Employer Ambition Jobs: Today and Tomorrow The Agenda: Prosperity, Jobs and Skills Prospects to 2020: Where Are We Going? The Ambition: Skills and Jobs Mismatches Between Jobs and Skills Skills and Employment Policy Other Measures of Skill Development

4. The Agenda and the Ambition Productivity: UK 11th place High employment/ high productivity High employment/ low productivity Employment: UK 10th place SETTING A WORLD CLASS AMBITION: SUSTAINABLE ECONOMIC COMPETITIVENESS & SOCIAL COHESION 2020 Goal: World Class Productivity Levels - in top 8 OECD countries 2020 Goal: World Class Employment Levels - in top 8 OECD countries 2020 Goal: World Class Skill Levels - in top 8 OECD countries Employment: Employment populations ratio 2007, all persons 15-64 Low employment/ high productivity Low employment/ low productivity Productivity: GDP per hour worked (US$ at current prices), 2007 Source: UKCES, Ambition 2020: World Class Skills and Jobs for the UK, 2009, pp 21-22

5. The Agenda: Productivity and employment in the Nations and Regions of the UK 5

6. The Agenda : Routes to Prosperity • Employment – the UK ranks 10th • Productivity – the UK ranks 11th • Inequality – the UK ranks 14th • National, Regional and Sectoral variations are critical • Skills are central to raising employment and productivity and reducing inequality

7. Skills and Employment The Low Skilled experience low and declining employment rates – the only disadvantaged group to do so Source: UKCES, Ambition 2020: World Class Skills and Jobs for the UK, 2009, Chart 1.5, p 29 – DWP using Labour Force Survey

8. Skills: the route to Prosperity Gross earnings (£000s) 21 24 27 30 33 36 39 42 45 48 51 54 57 AGE Source: Cabinet Office, Getting On, Getting Ahead: A Discussion Paper: Analysing the Trends and Drivers of Social Mobility, 2008

9. The UK Qualifications Profile 1997-2007: good progress over last decade +44% -26% Source: Labour Force Survey, 2008 – Note: Working age population 19 – 59/64

10. Progress towards 2020 Ambitions Sir John Rose, CEO Rolls-Royce (May 2006) There are only three ways of creating wealth. You dig it up, grow it, or convert it to add value, anything else is merely moving it about. In a high-wage economy you must focus on high converted-value activities. To achieve high converted value you need good education and differentiating skills

11. Our Prospects Basic Skills • We will achieve our basic literacy objective of 95% • We will not achieve our basic numeracy objective of 95%

12. Demand: jobs mismatch and employer ambition • growth of skilled jobs and decline of low skill jobs stalled; • no real evidence of deep seated shortages; • over qualification … or underemployment; • evidence that the UK’s excess demand over supply is low relative to other countries; • slowest positive growth in skilled jobs, yet fast growth in skilled workers

13. Employer Ambition • We need to go beyond: • raising skill levels; and • a better match between skill requirements and skills availability • Skills as a ‘derived’demand • Economic Policy • Skill Utilisation • Management and Leadership • The ‘virtuous circle’ of raising skills demand and supply

14. Key Messages to Government: a new Policy Framework Positive Economic and Social Outcomes Economic Performance Employment Reduced Inequality Productivity Supply of Skills Employment Demand Learning provision Skills Attainment Potential Workforce Required Workforce Business Strategy Economy – level/structure MatchMismatch Accredited (Qualification) Informal (Training) Management & Leadership Skills Utilisation • Shortages and skills gaps • Unemployment and Inactivity • ‘Over-skilled’ / ‘Under-employed • Migration Negative Economic and Social Outcomes Industrial Policy Economic Policy Skills Investment Individual, Employer, Government Other Drivers Guidance – firms & people Supply Demand Jobs

15. Moving forward If we keep on doing what we’ve always done, we’ll keep on getting what we’ve always got!” W.L. Bateman “The world we have created is a product of our thinking. If we want to change the world we first have to change our thinking” A Einstein

16. Skills, Jobs Growth – emerging thoughts Actively signal For the journey Focus on outcomes Empower Customers HPW Personal Accounts

17. Empowering customers at point of purchase