Skills for economic growth - An overview of priority sectors
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Acknowledgements The Learning and Skills Improvement Service (LSIS) would like to thank Birmingham Metropolitan College for providing the photographs of learners that appear throughout this publication. Publisher Published by the Learning and Skills Improvement Service (LSIS). © LSIS 2010 Publication reference: LSIS239 This document is available to download at www.lsis.org.uk 2 Skills for economic growth – An overview of priority sectors
Contents 1. Introduction 5 1.1 Terms of reference 5 1.2 Background 5 1.3 Scope and purpose 6 1.4 Methodology 6 2. What are the priority sectors? 7 2.1 Developing skills to support growth in the priority sectors 8 2.2 The impact of new job growth and replacement demand on skills need 9 2.3 The regional picture 10 3. Priority sectors 14 3.1 Advanced manufacturing 15 3.2 Low carbon 25 3.3 Life sciences 36 3.4 Digital economy and creative industries 42 3.5 Engineering construction 46 3.6 Business and professional services 50 3.7 Care 54 3.8 Retailing 56 3.9 Tourism, hospitality and leisure 60 4. The role of providers 64 4.1 Actions for providers 64 Annex A 72 Annex B 77 Annex C 78 Annex D 79 Annex E 80 Skills for economic growth – An overview of priority sectors 3
1. Introduction 1.1 Terms of reference This research study aims to inform the Learning and Skills Improvement Service (LSIS) and providers in the learning and skills sector about the priority for future economic growth and future job growth in England, and how the opportunities arising for training and business services could be exploited. The research was conducted in March 2010, prior to the May general election. 1.2 Background This report reflects the outcome of interviews with a sample of stakeholders in the learning and skills sector, with sector skills councils and with training providers. It describes at a high level, the priority sectors in England for future economic growth. It considers how far these are common across the nine regions in England, and how well these priorities are communicated and understood by providers and other stakeholders working to develop a skilled workforce. The priority sectors on which this report focuses were selected using a range of documents produced prior to March 2010. Those sectors were: Advanced manufacturing; Digital economy and creative industries; Engineering construction; Financial and business services; Life sciences; Low carbon energy; Care; Retail; and Tourism, hospitality and leisure. Skills for economic growth – An overview of priority sectors 5
1.3 Scope and purpose This report sets out: The national and regional priority sectors for growth and overarching skills requirements; A summary of the current and future skills requirements for each of the priority sectors identified; What providers are currently doing with respect to the priority sectors, how they can improve and suggestions for the support required. For the purpose of this research, the learning and skills sector comprises all providers who access employer responsive funding provided through the Skills Funding Agency (formerly, the Learning and Skills Council). This report looks in some detail at the first six of the priority sectors identified above and in less depth at the final three. It considers who are the key stakeholders associated with each sector. In particular, it considers which of the nine regional development agencies (RDAs) have included these nine priority sectors in their own regional strategy. Based on the research undertaken, it identifies actions to help providers respond to the needs of businesses, and build and strengthen their capacity in the priority sectors for growth. Possible support activities to help providers are also identified. The report is structured around these nine priority areas and considers each in turn. 1.4 Methodology The research conducted in March 2010 has included: Desk research of existing policies, strategies, research and labour market information about current and future skills and employment requirements; and Interviews with 33 stakeholders, including RDAs, sector skills councils (SSCs), the Skills Funding Agency (The Agency), National Apprenticeship Service (NAS) and providers and colleges from the learning and skills sector. Over 68 stakeholders were invited to participate in an interview as part of the research. 6 Skills for economic growth – An overview of priority sectors
2. What are the priority sectors? A variety of approaches can be used to identify priority sectors, including identification of: Those sectors with highest forecast employment growth as identified in Working futures (UKCES, 2007) and Skills for Jobs, Today and Tomorrow (UKCES, 2010) Economically significant sectors potentially constrained by skill deficits, as identified in Skills for Jobs, Today and Tomorrow (UKCES, 2010) Emerging sectors expected to deliver sustainable economic growth and jobs across England, and secure a competitive advantage for the country in the global economy, as identified in New Industry, New Jobs (BERR, 2009) and Jobs of the Future (BIS, 2009). Table 1 shows a summary of the priority sectors identified using the three approaches highlighted above. Table 1: Priority sectors Sectors with highest Economically significant sectors potentially Sectors identified Sectors identified in forecast employment constrained by skill deficits in New Industry, Jobs of the Future growth (from New Jobs Working futures) Current Future Business services Computing Business services Advanced Advanced Health and social Construction Education manufacturing manufacturing care Hospitality Financial services Digital and Business and Hotels and Retailing Health and social creative economy professional catering Transport care Engineering services Retailing. equipment Retailing construction Care manufacture Wholesale Financial and Digital economy Utilities. distribution. business services and creative Life sciences and industries pharmaceuticals Engineering Low carbon. construction Life sciences Low carbon Retailing Tourism, hospitality and leisure. Skills for economic growth – An overview of priority sectors 7
2.1 Developing skills to support growth in the priority sectors Skills are a crucial component of future economic success in any sector. Ensuring that the nation is equipped with the skills employers need in the future will maximise the amount it benefits from the opportunities for economic growth that lie ahead. To fully maximise economic performance, to generate real opportunity for individuals and for business success, it is imperative to supply economically valuable skills which effectively meet the changing needs and requirements of the labour market. Skills for Jobs, Today and Tomorrow (UKCES, 2010) highlights the predicted long-term structural changes in occupational structure across a variety of the sectors listed in Table 1. Substantial growth is forecast in managerial, professional and associate professional/ technical occupations. Such growth raises the need for high, intermediate and generic skills to secure future economic prosperity. In doing so it places an emphasis on strengthening training pathways, including intermediate vocational career pathways, to ensure skills requirements are met, and that people can progress into intermediate and higher level skills. Important skills areas for growth include: management and leadership skills, especially for corporate managers across a wide range of sectors to ensure successful growth and full exploitation of the potential of emerging technologies; professional skills, particularly in teaching and research occupations and in the following sectors: the computing and software sector, parts of health and social care, pharmaceutical and medical technology and manufacturing (i.e. traditional and advanced) technician and equivalent skills across many sectors, such as health and social care, utilities, chemicals, life sciences and pharmaceuticals, automotive engineering and broadcasting; intermediate and higher level vocational skills within sectors such as manufacturing, engineering, processing and construction associated with skilled trades as the current ageing workforce retires and emerging opportunities develop in some sectors and to support future demand; customer service and employability skills including customer handling, problem solving and team working will be of growing importance, particularly for the service industries, including retailing, as well as for after-service and maintenance roles in manufacturing and the digital economy. Skills for Jobs, Today and Tomorrow (UKCES, 2010) also notes the ageing population will lead to increased demand for care services with particularly significant increased volumes of staff in care assistant roles, who will need greater understanding of ICT to support care users with assisted living technologies. 8 Skills for economic growth – An overview of priority sectors
Low-skilled jobs are expected to persist. Despite the continued growth of highly skilled work within the labour market, and a substantial overall decline in recent years in lower skilled jobs, in the future significant employment is expected to remain in sectors traditionally requiring low skilled jobs. Skills for Jobs, Today and Tomorrow (UKCES, 2010) reports that employment opportunities in sectors traditionally requiring low skilled jobs will still be significant. These jobs are important as a labour market entry point for many groups, such as those seeking to move out of unemployment. However, many of these jobs will subsequently be in need of upskilling in order to make improvements in service/ product quality and to meet changes in consumer demand. Other developments in skills policy will also affect the demand for skills in priority sectors. These include: The effect of the imminent cap on non-European Economic Area migration on skills and training needs The intention to create a more spatially balanced economy The results of the new government skills consultation in shaping policy to create an internationally competitive workforce (see Annex A for details.) 2.2 The impact of new job growth and replacement demand on skills need Skills for Jobs, Today and Tomorrow (UKCES, 2010) identified a net requirement for more than 13 million job openings in the next ten years, of which only 1.9 million relate to new demand. These job openings will arise as a result of structural change across occupations. In contrast, over 11.5 million will arise due to replacement demand as a result of staff turnover, including retirement. The two occupational groups with the largest volumes of replacement demand are corporate managers and caring personal service occupations. Occupations for which replacement demand is predicted to be significant will require skill replacement, including upskilling. The volume and types of new versus existing skills required to support both “new” job growth and replacement demand, remains unclear at present. However, the change in demand for skills is likely to include: the application of existing skills to new technologies in existing jobs; the application of existing skills to new technologies in new jobs; and/or the development of new skills for new occupations. The balance between the drivers of change in the demand for skills will vary across different occupational sectors. Skills for economic growth – An overview of priority sectors 9
2.3 The regional picture A variety of factors impact on which of the sectors reported in Table 1 will be important for economic and job growth at a regional level, including: the strategic priorities for a region and the supporting policies; the distribution of the sectoral employment across the region; existing national and international competitive advantage and regional distinctiveness, particularly with respect to research and development assets and business; and the structure of sub-regional economies. These factors provide regions with a stronger or weaker existing platform on which to develop growth in the priority sectors. Figure 1 shows which sectors have been identified as priorities by most regional development agencies (RDAs) within their Regional Priority Statements.1 Figure 1. Sector priorities for regional development Number of regional development agencies (RDAs) that prioritised the sector Food and drink Creative industries Customer services Tourism, hospitality and leisure Financial, business and professional services Life sciences Digital and creative Low carbon Advanced manufacturing 0 1 2 3 4 5 6 7 In defining the high-growth opportunities, each region has begun to differentiate subsectors within the broadly defined New Industry, New Jobs sectors. The main regional dimensions for economic and job growth are summarised on page 12 in Table 2. 1 Links to the Regional Priority Statements can be found in Annex B. 10 Skills for economic growth – An overview of priority sectors
While the precise skills required to support high growth in the sectors identified will depend on the regional context and the current geographical distribution of skills, the Regional Priority Statements produced by the RDAs reveal several key themes which align with the important skills areas highlighted on page 6. These key themes include: Increased demand for: – Management and leadership skills; – Science, technology, engineering and mathematics (STEM) related occupations at all levels; and – Multidisciplinary knowledge and multi-skilling in management and technical occupations in order to meet the need for improved IT, business development and improvement, and customer service skills within occupations. Skills inflation resulting in an increased demand for level 3 and 4 qualifications across many occupational areas, including technicians and managers, identifying a need to support progression to higher levels through promotion of level 2 and 3 pathways. A need for improved business and entrepreneurial skills to increase innovation and drive up enterprise. Close to labour market interventions for unemployed people, incorporating programmes that enable progressive skills development and employability skills. Skills for economic growth – An overview of priority sectors 11
Table 2: Priority sectors for the nine regional development agencies in England2 3 Priority sector East of England East Midlands London3 North East North-west Advanced Micro and Aerospace, Plastic electronics Aerospace manufacturing nanotechnology automotive and Micro-technology Plastic rail manufacture Advanced electronics engineering Composites Industrial Industrial biotechnology biotechnology Business and Relating to professional key sectors for services growth Digital and Digital Transport IT creative Creative technologies, infrastructure industries including space and global navigation satellite systems Life sciences Life sciences Low carbon Offshore wind Sustainable Construction Low-carbon Nuclear Nuclear energy construction vehicles technologies Low-carbon Application of Offshore wind Renewable vehicles current strength Decarbonising energy Low-carbon in energy the industries Low-carbon buildings and building Energy from products and Environmental technologies to waste services technologies low carbon Carbon capture Retrofitting and storage buildings Marine energy Ultra Green low-carbon/ construction electronic vehicles Other Customer Food and drink Retailing services preparation, Tourism, (especially in the packaging and hospitality retail sectors) innovation and leisure Tourism, production hospitality and science leisure Health and care 2 These priorities have been identified from the Regional Priority statements (please see Annex B for links to the Regional Priority Statements). Draft Regional Priority Statements for 2010–11 have been produced by all regional development agencies, with the exception of the London Development Agency, and scheduled to be refreshed by October 2010. For 2010–11, the London Development Agency priorities are aligned to those defined in the London Skills and Employment Board Strategy. 3 For 2010-11, the London Development Agency priorities are aligned to those defined in the London Skills and Employment Board Strategy. The LDA is currently undertaking research to identify employment forecasts across sectors and occupations specific to London. 12 Skills for economic growth – An overview of priority sectors
Priority sector South-east South-west West Midlands Yorkshire and the Humber Advanced Advanced Composites High technology Industrial manufacturing engineering and Micro and manufacturing biotechnology marine nontechnology Micro and Aerospace and Advanced nano-technology defence engineering Additive manufacturing Industrial biotechnology Business and Financial and Financial services professional professional services Business services services (public and private) Digital and ICT and digital Informatics ICT, including creative technologies ICT security, informatics, photonics and radio frequency identification Life sciences Life science Medical Health technologies technologies Low carbon Environmental and Renewable Environmental Carbon capture and energy technologies technologies technologies, storage Machine energy including building Civil nuclear Offshore wind technologies Offshore wind Civil nuclear Environmental technologies Other Food and drink Retailing Tourism, hospitality Construction and leisure Wholesaling Health and care Tourism Distribution and logistics Skills for economic growth – An overview of priority sectors 13
3. Priority sectors In order to increase the supply of skills, providers must engage with employers, and should understand how their curriculum offer is meeting the needs of employers. This section of the report considers each of the priority sectors identified above. It is intended to help providers understand the scope of each sector and the opportunities that may exist for the development of new provision, or the expansion of existing provision. Sections 3.1 to 3.9 contain a summary of the current and predicted future demand for skills in the following sectors: Advanced manufacturing; Low carbon; Life sciences; Digital economy and creative industries; Engineering construction; Business and professional services; Care; Retailing; and Tourism, hospitality and leisure. A table showing a summary of the nine sectors and their subsectors is at Annex E. 14 Skills for economic growth – An overview of priority sectors
3.1 Advanced manufacturing 3.1.1 Definition and associated subsectors Advanced manufacturing describes industries and businesses that use a high level of design or scientific skills to produce technologically complex products and processes. The specialist requirements involved in Advanced manufacturing technologies are associated with goods and services of high value. The Advanced Manufacturing Cluster Report (www.semta.org.uk/public_bodies/research/ advanced_manufacturing_cluster.aspx) identifies six major subsectors for the advanced manufacturing sector: Aerospace; Plastic/printed electronics; Silicon electronics; Industrial biotechnology; Composites; and Nanotechnology; The most important element of current and future skills demand is high-level technical skills including science, technology, engineering and mathematics (STEM) graduates, postgraduates and technicians with an understanding of the specific technology or of the underlying sciences. To ensure the effective exploitation of the advanced manufacturing technologies, expertise in the technology itself is required but, this needs to be augmented by capable and competent technical support staff and also personnel skilled in the areas of intellectual property (IP) management, new product and process development and implementation, production and manufacturing engineering, and also marketing. Whilst the advanced manufacturing sector activity is primarily focused on research and development, advances in the technology associated with this sector will require an increase in skilled technicians capable of running complex equipment. The requirement for technicians will increase as the technology is applied to production, along with management and commercialisation skills. For each of the six advanced manufacturing subsectors, the current and future skills requirements are summarised below.4 4 Unless otherwise stated, all figures and statistics quoted are taken from The Advanced Manufacturing Cluster Report (www.semta.org.uk/public_bodies/research/advanced_manufacturing_cluster.aspx) and the references contained therein. Skills for economic growth – An overview of priority sectors 15
3.1.2 Aerospace industry Aerospace supplies three main markets: civil, defence and space. Each product area is also at the centre of a set of service activities including maintenance, repair and overhaul. Table 4 summarises the current employment profile and skills requirements. Table 4: Summary of current employment profile and skills requirement for the aerospace industry Current employment profile and skills Current skills mismatches requirement Management, professional and Skills associated with: technician occupations now make up 54 per cent of the workforce, compared – Management and leadership to 41 per cent 10 years ago. – Productivity and competitiveness – Technical workforce development Demand remains consistently – Strategic workforce planning. positive for engineers in the satellite, defence, unmanned aerial vehicle and consultancy sectors, specifically for knowledge of composites. Electricians, radio frequency technicians and surface mount technology operators (aerospace electronics), are needed on a permanent and subcontract basis. An increase in the complexity of the electronic systems on modern aircraft, require a greater need for IT skills support development, build and maintenance activity. Likely future skills requirement The aerospace market is forecast to grow by 25 per cent in real terms over the next 20 years to $250 billion per year worldwide. Increasing fuel prices will also increase demand for orders for new fuel-efficient aircraft. However, overall, aerospace employment is likely to decrease in the future due to movement up the value chain, productivity improvements and supply chain rationalisation. Eight per cent of the current workforce is aged 60 plus. Taking into account the replacement demand due to retirement, over the next five years there will be a net requirement for 8,000 new entrants (1,600 people a year) in management and technical occupations into aerospace in England. Expected demand is for 1,600 managers, 1,900 professionals, 1,300 technicians, 1,600 craft workers and 1,500 operators. 16 Skills for economic growth – An overview of priority sectors
Table 5: Summary of future skills requirement for the aerospace industry Future skills requirement 41 per cent of the workforce qualified to NVQ level 4 plus but the sector target of 50 per cent by 2022 is not currently achievable by focusing on graduates alone. Increased need for improved technical skills achieved through alternative routes to higher education, including, for example higher apprenticeship in engineering. New skills associated with the introduction of new technologies or equipment, development of new products and services, new legislative or regulatory requirements and introduction of new working practices. Existing hard-to-fill vacancies and skills gaps, particularly within the licensed mechanic occupation will be further impacted by the loss of skills due to an ageing workforce. 3.1.3 Plastic electronics industry The term plastic electronics, also known as printed electronics, is used to describe electronics based on semiconducting organic polymer materials. Plastic electronics is a new sector, very much at the start of its development, but with recognised potential for growth, in which the UK could play a leading part. Table 6 shows the different types of plastic electronics and associated applications. Table 6: Examples of possible applications of plastic electronics Plastic electronics Examples of applications Energy efficient lighting Lighting, signage, displays Smart fabrics and intelligent textiles Illuminated safety clothing Flexible displays Roll-up displays Sensors Intelligent packaging for the pharmaceutical and food industries – labels that change colour if food items go outside their recommended sell-by date Photovoltaic cells Off-grid solutions including self-charging mobile phones Electronic circuitry Hand-held and mobile equipment Consistent with the early status of the development of the plastic electronics, the current skills required are mainly research and development skills at postgraduate and post-doctoral level. Skills for economic growth – An overview of priority sectors 17
Table 7: Summary of current employment profile and skills requirement for the plastic electronics industry Current employment profile and skills requirement Multidisciplinary skilled teams to lead development including expertise in: – Electronic engineering, optics and nanotechnology; – Printing and ink technology; – Materials science; – Chemistry; and – Physics. Support roles including: – Designers to work across the sectors of electronics, printing, textiles and other materials design to generate attractive products to develop the markets; – Materials scientists to develop the substrates for printing on, including polymers, and to develop the inks for use in plastic electronics and the methods by which the inks can be applied; and – Skills within the current manufacturers of printers, particularly in the development of inkjet printers, to print the electronic components more effectively. Likely future skills requirement Table 8: Summary of future skills requirement for the plastic electronics industry Future skills requirement As products are developed in the laboratory and go into production, there will be a greater need for technicians skilled in testing, prototyping, design implementation and optimisation of products and manufacturing processes. As the markets develop, these will be needed in increasing numbers within the next three to five years. New product development and implementation skills will be required to ensure the rapid transfer of technology to the market place. Quality control skills. Lean manufacturing techniques, particularly Six Sigma and quality, cost and delivery measurement. Development of printer technology and printer equipment manufacturing. 18 Skills for economic growth – An overview of priority sectors
3.1.4 Silicon electronics industry Silicon electronics is the design, development and manufacture of extremely small electronic devices on wafers of single-crystal silicon that consume very little power. The UK is a centre for global electronics development companies with major research and development or manufacturing bases. For example, 40 per cent of Europe’s semiconductor design houses are based in the UK, and almost 80 per cent of the activity relating to semiconductors comes from foreign inward investment. Table 9: Summary of current and future skills requirement for the silicon electronics industry Current and future employment profile and skills requirement Regular upskilling of employees to respond to rapidly changing technology. Technicians and craft level workers to be competent in fundamental electronics knowledge, which can be applied across a number of applications. Skills in circuit design, control systems, embedded software design, mathematical modelling and simulation, systems design and engineering skills for use in advanced manufacturing and quality control are most important. The Semta and Institute for Employment Research forecasting model shows that there will be a replacement demand for 16,400 employees between 2010 and 2014 in the electronics sector, which places a greater demand for STEM entrants, particularly within electronic and electrical engineering. 3.1.5 Industrial biotechnology industry The key market sectors for the application of industrial biotechnology (IB) are strongly linked to advances in life science research and development. The IB subsector includes the pharmaceuticals and other health care products sectors, including vaccine production. However, IB also lends itself to the manufacture of chemical products and in particular products which rely on the use of oil as their stock material. Skills for economic growth – An overview of priority sectors 19
Table 10: Summary of current employment profile and skills requirement for the industrial biotechnology industry Current employment profile and skills requirement As with other advanced technology areas, higher degree qualifications focused with a specialism in industrial biotechnology are required to meet the employment need. The Working Futures 2007-2017 (UKCES, 2008) projections suggest that intake to the chemicals sector is likely to be about 1,800 graduates a year. However, 25 per cent of graduates are initially employed in occupations below NVQ level 4. While the technology has become well established within both the pharmaceutical and biotechnology sectors, the use of the technology is still in its infancy in the chemicals sector, and as such there is a requirement for research and development personnel in these areas to develop new skill sets. Likely demand for skills in requirement The continued research and development focus of this industry requires higher level skills, at levels 4, 5 and 6 to meet the future needs, particularly to ensure translation of the technology to the chemical sector. Table 11 summarises the skills required to support the growth of the IB industry. Table 11: Summary of future skills requirement for the industrial biotechnology industry Future skills requirement Graduates and postgraduates with multidisciplinary experience wherever possible as IB crosses the boundaries between such areas as biology, genetics, microbiology, chemistry and chemical engineering. The applied nature of IB research and development activity will require more graduates and postgraduates with practical working skills, together with project management skills to drive business development of new products to generate products from the research being done in IB. Team working skills to ensure that researchers can work effectively with bioprocess engineers in the scaling up of benchtop products to commercial scales Technicians with the skills from level two to three will be required to run equipment associated with the development of the technology (for example, biofermentation pilot plants). Skills will also be needed to develop and control more efficient production operations. 20 Skills for economic growth – An overview of priority sectors
3.1.6 Composites Composites comprise a mixture of two or more discrete materials which, when physically combined, give a material with superior mechanical properties. The significant energy savings both in production and operation means composites find application in many manufacturing sectors, including: Automotive; Aerospace; Marine; Construction; Domestic appliances; Medical devices; and Wind turbines. Composites are receiving significant government research and development funding, with £64 million allocated over an eight-year period. However, public sector research and development is increasingly under pressure due to the recession and efficiency savings. Table 12: Summary of current employment profile and skills requirement for the composites industry Current employment profile and skills requirement The composites industries require researchers, innovators, technologists, designers and highly skilled processing technicians with skills in the areas of manufacture, assembly, disposal and maintenance, repair and overhaul. The skills required vary according to the specific industries: – Automotive: Greater competence in computer aided design engineering, ‘crash’ durability and cost modelling skills, prototype development, project management skills, and tooling and jigging skills. – Aerospace: Materials and process structures design, materials and process engineers, design and stress engineers for composite structures, and people with large scale processing experience. – Marine: Carbon fibre specialists, laminators and knowledge of product and process techniques. Skills for economic growth – An overview of priority sectors 21
Likely future skills requirement The UK has a strong postgraduate focus on composite materials. The industry will continue to need to recruit graduate chemists, physicists and biologists, to work closely with and alongside engineers and mathematicians. Short, medium and long-term skills requirements have been identified to meet future demand; these skills are summarised in Table 13. Table 13: Summary of future skills requirement for the composite industry Future skills requirement Short-term: Processing techniques of hand laminating, infusion (vacuum forming) and pre-preg lay-up require training support. Medium-term: The more advanced industries will have to be trained for automation whereas the lower tech companies will adopt infusion/pre-preg processing techniques. Long-term: All industries will have to adopt automation processes and the skills associated with them. The higher-skilled workforce will need to be supported by lower-level skills: In addition to postgraduate specialist skills, highly qualified technical support will be required to realise the benefits of composite industry. 3.1.7 Nanotechnology Nanotechnology is a collective term for a set of technologies, techniques and processes, rather than a specific area of science or engineering. It represents an entirely new manufacturing process, with the industry still largely based on research and development activity, requiring engineering and science-related higher levels skills at NQF levels 5 and 6. Table 14: Summary of current and future skills requirement for the nanotechnology industry Current and future employment profile and skills requirement Multidisciplinary experience is highly beneficial, both currently and in the future, as nanotechnology crosses the boundaries between such areas as natural sciences and engineering. Scientists and engineers will require management skills in areas such as finance, technology management and technology strategy, high-tech marketing, intellectual property strategy and in science and technology policy, if they are to successfully commercialise their research findings and establish high-performing companies. In the food industry, the skills requirements for nanotechnology will be focused on the need for higher skilled food scientists to develop anti-microbial activity to ensure food safety and security. 22 Skills for economic growth – An overview of priority sectors
3.1.8 Geographical context of the advanced manufacturing industry and associated subsectors Regional expertise and growth potential in the specialist industries included within the advanced manufacturing sector are distributed across a number of English regions. For example: Aerospace activity is regionally concentrated in the north-west, south-west, East Midlands and south-east. Silicon electronics employment is greatest in the east of England, the south-west and the south-east. The chemical production sector is distributed throughout the UK but has four major clusters found in the north-east, the north-west, and Yorkshire and the Humber and south-east regions. Industrial biotechnology tends to be distributed throughout the regions, clustered around the presence of higher education institutions to exploit and commercialise industry and innovation. Specific skills requirements associated with priorities identified within each region’s statement of priorities are summarised below: East of England While the skills requirement has yet to be defined, plastic electronics, micro and nanotechnology, industrial biotechnology and composites are all identified as high growth opportunities within the east of England Regional Priority Statement. East Midlands The chemical and polymer industries are characterised by small and medium-sized enterprises (SMEs) and form the largest employment base in the East Midlands employing 11,300 and 22,300 respectively. The pharmaceuticals industry accounts for approximately 3,300 employees in the region. North-east The north-east is home to the national plastics electronics prototyping centre (PETeC), although the extent and availability of skill sets required are currently unknown due to the early state of technology development. North-west The north-west is the largest manufacturing region in England. The regional priority statement identifies skills priorities above national average for technical, practical, job-specific skills, problem-solving, and customer handling and management skills. Skills for economic growth – An overview of priority sectors 23
The region’s chemicals manufacturing and processing industry accounts for 21 per cent of total UK employment in the sector. There are currently shortages of technical and engineering skills such as technicians, fitters and operators. An ageing workforce will mean more apprentices are required to meet replacement demand. The use of composite components in both civil and military aircraft is growing rapidly, particularly requiring systems engineering training and greater understanding of supply chain needs. South-west The national composites centre is based in the south-west of England and aims to develop internationally significant technology to support many sectors. Technical skills at level 3 and above are required to support the growth of the region’s composite industry. However, some level 2 skills are required, including skills in composite familiarisation. Yorkshire and the Humber The chemical and polymer industries form the largest employment base in the region employing 11,700 and 18,800 people respectively, and the pharmaceuticals industry accounts for approximately 4,100 employees in the region (Cogent 2009). www.sscalliance.org/nmsruntime/saveasdialog.aspx?lID=949&sID=1858) The regional statement of priorities identifies the requirement of skills at levels 3 and 4 to support regional growth in advanced manufacturing industry, coupled with a growth in level 2 to 4 learner starts in a range of technical NVQs. 24 Skills for economic growth – An overview of priority sectors
3.2 Low carbon 3.2.1 Definition and associated subsectors The low carbon agenda spans a range of sectors within the economy. The Low Carbon Cluster Report (2009)5 states that the low carbon agenda should be considered under four broad headings which represent significant sources of carbon production. These four headings are: Decarbonising the power industry; Decarbonising industry; Decarbonising transport; and Decarbonising buildings. Table 15 below summarises the sectors that are considered to be in scope under each of the four headings highlighted above. Table 15. A summary of the sectors that form the low-carbon agenda Decarbonising the Decarbonising industry Decarbonising the Decarbonising the power Industry transport sector buildings Large-scale Energy efficiency Low carbon Zero-carbon homes renewable management New nuclear energy Alternative energy Fuel efficiency Micro renewable Carbon capture and Reduced emissions Air traffic Retrofitting existing retrofitting and wastage management buildings Energy from waste Low-carbon Hybrid vehicles Retrofitting processing commercial buildings Land management Modal shift and natural environment Substantial opportunities for UK economic growth exist within this sector through more efficient use of energy within the economy but also developments in low carbon energy generation including wind, marine, micro generation, nuclear, and carbon capture and storage. These opportunities are, in part, due to a number of advantages that benefit the UK including abundant wind and marine resources as well as large potential sites for carbon capture and storage (CCS). There are some cross-cutting themes that emerge in relation to the skills requirements of the industries that form the low-carbon agenda. 5 Unless otherwise stated, all figures and statistics quoted are taken from The Low Carbon Cluster Report (www.sscalliance.org/nmsruntime/saveasdialog.aspx?lID=974&sID=1858) and the references contained therein. Skills for economic growth – An overview of priority sectors 25
Science, technology, engineering and mathematics (STEM) related skills feature heavily in terms of what is required by employers as well as the need for generic skills such as management and leadership, technology transfer skills, general business acumen and entrepreneurial skills. The ageing workforce will impact the sector and exacerbate current or future skills requirements. For example conventional, renewable and nuclear power generation are all forecasting large percentages of their workforce retiring over the course of the next 10 to 15 years. Summarised below are some of the key issues related to sectors defined as part of the low carbon agenda and also the current and future skills requirements (where this information was available). It is very difficult to anticipate future demand for skills in the low-carbon sector. The expansion of sectors (e.g. wind and marine) is linked to a range of unpredictable factors such as successful planning applications that make it difficult to accurately predict the extent and location of future skills needs. On 1 April 2010, BIS and the Department of Energy and Climate Change (DECC) launched a consultation on the skills needed to ensure UK businesses are equipped to take advantage of low carbon opportunities. This consultation set out the government’s key skills priorities, and the challenges which must be met if we are to: Enable British workers and businesses to take advantage of the opportunities in those sectors that are key to reducing our carbon emissions; and Embed the necessary skills across all sectors to move the UK to a low-carbon and resource-efficient economy. 26 Skills for economic growth – An overview of priority sectors
3.2.2 Decarbonising the power industry Decarbonising the power industry has been defined to include renewable power generation (including wind, hydroelectric, biomass and marine energy), nuclear energy, generating energy from waste, and carbon recapture and storage. The current employer profile and skills requirements for decarbonising the power industry are summarised in this section. Table 16: Summary of current employment profile and skills requirements related to decarbonisation of the power industry Current employment profile and skills requirement Wind industry: The wind industry involves utilising wind energy to drive turbines and generate electricity. This is a growing sector with skill requirements including turbine technicians, project managers and electrical engineers. There is a shortage of trainers and some difficulty recruiting staff to remote employment regions. Hydroelectric: Hydroelectric involves using the natural flow of inland water to drive turbines and generate electricity. The sector does not currently seem to have high levels of concern in terms of skills deficiencies. Biomass: Biomass uses various fuel sources (e.g. waste, crops and other sustainable natural sources) which are either incinerated in order to produce heat or power or they can be digested to produce biogas. The sector does not currently seem to have high levels of concern in terms of skills deficiencies. Marine energy: Marine energy utilises the natural motion of tides and waves to drive various technologies which result in the generation of electricity. The demand for skills is being driven largely by the need for skilled marine, mechanical and electrical engineers to assist in design and testing of the new technology. Nuclear Energy: The nuclear energy sector employs approximately 44,000 people and has a requirement to recruit in excess of 1,000 new workers each year, mainly as new apprentices and graduates in the following areas: project and programme managers, safety case authors, design engineers, control and instrumentation engineers and high integrity pipe welders. Energy from waste: Waste can be used to generate energy through combustion of solid fuels and via anaerobic digestion of wet food and agricultural waste which could significantly reduce the amount of waste that is land filled in the UK. The sector requires engineering, design and construction skills to develop the necessary infrastructure. Carbon capture and storage (CCS): CCS describes the technology and process whereby the carbon dioxide (CO2) emissions of power generating plants to generate electricity, are captured and prevented from being released into the atmosphere. This technology can be fitted to both new build and existing power generating plants. Experience in the oil and gas sectors is critical because storage of CO2 demands similar engineering skills. Skills for economic growth – An overview of priority sectors 27
Likely future skills requirement A summary of likely future skills requirements is presented below (where information was available). Table 17: Summary of future skills requirement related to decarbonisation of the power industry Future skills requirement Wind industry: The sector provides around 4,000 jobs with potential to create 40,000 by 2020. The skills required will be at level 3 and mostly level 4 including project managers, business development managers, electrical engineers, turbine technicians, geologists and aeronautical engineers. The government also announced recently the co-funding of up to 2,500 apprenticeships in the wind energy industry. Marine energy: The sector is small but has potential for long term economic growth and the creation of several thousand jobs. The marine sector is reliant on high level STEM including civil engineers, electrical engineers, mechanical engineers and structural engineers. Carbon capture and refitting: STEM skills and offshore engineering skills and knowledge of depleted oil and gas fields in the UK will be invaluable to the development of the CCS industry. There may also be a need, particularly within the carbon capture and storage subsector, for professional services advice such as legal and financial services and climate change economists. Nuclear energy: accounts for approximately 44,000 jobs (20,000 in the supply chain). Employment will fall as plants are decommissioned but this will be cushioned by the commissioning of new nuclear plants. The workforce is highly skilled with a significant proportion engaged in professional and technical roles. The sector is currently lacking one-third of the workforce it requires qualified to levels 2 and 3. The government has made a commitment to co-fund up to 1,000 apprentices in the nuclear sector if the demand from industry is confirmed. 28 Skills for economic growth – An overview of priority sectors
3.2.3 Decarbonising industry Decarbonising industry has been defined to include increasing energy efficiency, reducing carbon emissions and wastage, use of alternative fuels and low carbon processing. The current employer profile and skills requirements for decarbonising the industry is summarised in this section. Table 18: Summary of current employment profile and skills requirements related to decarbonising industry Current employment profile and skills requirement Energy efficiency: This is essentially about using less energy to produce the same level of service / output. Investment in research and development and global competition are driving the demand for skills. The sector requires technical skills such as mathematical modelling, rapid prototyping and computer simulation. In addition skills related to areas such as corporate social responsibility, environmental product analysis and legislative compliance are also needed. Reduced emissions and wastage: Reduced energy use, emissions and wastage is central to the development of a low carbon economy. Current skill requirements include leadership and management, process control and improvement, and materials, supply chain and product design which will require high level STEM skills. Alternative fuels: Alternative fuels are typically non-carbon (such as hydrogen). Primarily, skills are needed in the engineering construction aspect of the alternative fuel industry. This includes: project management, technological understanding, environmental compliance and design standards. The adaptation of skills is possible from existing installation and construction practices. Low-carbon processing: The emerging field of industrial biotechnology provides the possibility of developing original processes that reduce energy demand, typically in areas such as pharmaceuticals and high value, low volume speciality chemicals. Skills requirements are at all levels and include high level interdisciplinary skills, with the ability to integrate laboratory practice with industrial scale production. A wide range of specialisms are required, from the cultivation of feed stocks and land management to the operation, control and maintenance of industrial plants. Land management: Management of the natural environment can mitigate the impact of climate change. For example carbon sequestration involves capturing and storing carbon naturally in soils and vegetation. Skills related to the preparation of environmental impact assessments, sustainability, soil management and land management are required. Knowledge in areas such as soil science, organic chemistry and efficient resource management is also required. Likely future skills requirement Decarbonising industry will require the development of technical skills across a number of sectors, particularly manufacturing, to support the development of the UK as a global leader in low carbon technologies. Skills for economic growth – An overview of priority sectors 29
3.2.4 Decarbonising the transport sector Decarbonising transport includes the development of low carbon engines, fuel efficiency, air traffic management, hybrid vehicles and a modal shift to utilise forms of transport that reduce C02 emissions. With transport representing 21 per cent of the total UK domestic carbon emissions, decarbonising transport is expected to be an integral part of the low carbon solution. A summary of the current employer profile and skill requirements is presented over the page: Table 19: Summary of current employment profile and skills requirements related to decarbonising the transport sector Current employment profile and skills requirement Low carbon engines: The sector is driven at least in part by government investment including £400 million of support to encourage development and uptake of ultra-low emission vehicles. A range of skills are required including manufacturing, design, ICT, mathematical modelling and simulation, systems design and engineering skills for use in advanced manufacturing and quality control. Fuel efficiency: The sector relates to reducing the amount of fuel it takes to perform a specific task. In the logistics sector there are two main areas of skills needs. First, warehouse operatives need to ensure that goods are delivered efficiently and in good condition, reducing transport costs. Second, effective management skills are required to ensure that the practices are followed. Air traffic management: The government’s objective to lower CO2 levels and the desire of businesses to lower costs and improve efficiency has driven the demand for skills in this area. Employees with transport planning skills are required to help plan the most efficient routes for aircraft. Hybrid vehicles: Hybrid vehicles reduce the output of harmful pollutants. Different types of engineering and installation skills may be required when new vehicles enter service, as well as additional training and upskilling for maintenance and repair of hybrid vehicles. Modal shift: More research needs to be done on mode of transport and the related impact, including the impact of utilising multimodal transport, including rail and sea transport, as a solution for a lower carbon economy. With companies accessing revenue support from the government to embrace multimodal transport, strong management skills that involve putting together business plans for funding, and knowledge of sustainable solutions will be required. 30 Skills for economic growth – An overview of priority sectors
Likely future skills requirement This section also includes a summary of likely future skills requirements related to decarbonising the transport sector (where information is available). Table 20: Summary of future skills requirement related to decarbonising the transport sector Future skills requirement Low carbon engines: There are likely to be roles for people involved in developing and producing prototypes using software to virtually test and explore new vehicle designs. In addition, roles may emerge for people with a background in, and understanding of, alternative sources of power generation such as batteries and low carbon fuels. Fuel efficiency: With the Department for Transport’s suggestion of making eco-driving a mandatory part of the European Union driver certificate of professional competence (CPC), this would mean that 312,000 HGV drivers and up to 202,000 van drivers would need to complete the training. Further information can be found in the Low Carbon Cluster Report. Air traffic management: Carbon emission restrictions and higher flight prices have the potential to lead to fewer flights, which will have implications for skills and employment demand. Hybrid vehicles: Different types of engineering and installation skills may be required when new vehicles enter service, as well as additional training and upskilling for maintenance and repair of hybrid vehicles. Modal shift: Traffic congestion is set to rise considerably by 2025, costing the UK economy £22 billion every year and impacting on the environment and the logistics sector, where the majority (68 per cent) of freight is moved by road. Congestion can have serious consequences for businesses. Companies will look for alternative solutions like multimodal transport. Skills for economic growth – An overview of priority sectors 31
3.2.5 Decarbonising buildings Decarbonising buildings has been defined to include retrofitting existing buildings, developing zero-carbon homes, commercial buildings and the micro renewable sector. The current employer profile and skills requirements for decarbonising buildings is summarised in this section. Table 21: Summary of current employment profile and skills requirements related to decarbonising buildings Current employment profile and skills requirement Retrofitting existing buildings: Involves renovating existing homes and buildings to be more energy efficient. Legislation is an important driver here. Skill requirements are related to improving the building fabric, for example walls, windows, lofts etc. While the skills issues for loft and cavity wall insulation are addressed, there is a need to ramp up skills in relation to aspects of fabric such as solid wall insulation and hard to treat properties. Zero-carbon homes: Zero-carbon housing is a new concept and tends to relate to new builds. It is difficult to predict current skill needs as the ‘potential’ demand for firms to adopt skills and capacity building are not yet creating ‘effective’ demand from the market. Commercial buildings: Communities and Local government (CLG) introduced measures in England and Wales to improve the energy efficiency of our buildings which have created employment opportunities in aspects such as commercial energy assessors, air condition system inspectors and display energy certificate providers. Micro-renewable: Includes solar power technologies, micro turbines and heat generation techniques. The current skill requirements are graduates and postgraduates with a multidisciplinary experience in nanotechnology and effective research and development skills and technicians capable of running the complex equipment. Likely future skills requirement This section also includes a summary of likely future skills requirements related to decarbonising buildings (where information is available). 32 Skills for economic growth – An overview of priority sectors
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