This article was first published in Western Mail
If the Welsh economy wants to seize the opportunities ahead, we have to stop looking at the future of skills and employment from a position of what we know today, or worse, still looking back on what we used to do. We need a sharp, cross-sector focus on the future and the kind of workers and environment tomorrow’s companies will need.
We already know that there will be a move away from physical, technical and resource- based skills towards cognitive, systems and problem solving skills. This presents a significant change to the traditional industry base in Wales. However, the nation is well placed to benefit: experiencing the rise of the creative and media industry; hosting the UK’s largest cyber cluster; and rapid evolution as all things digital impact significant skills in aviation and aerospace, medical device development and engineering - all of which will be important in the future economy.
However, these existing skills are changing. The next generation of engineers will need to know not only how to design industrial scale manufacturing processes but also how to deploy them through high-end robotics and use data analytics and increasing level of machine learning to advance their use and productivity. Wales may be known for its manufacturing and engineering, but is it ready to manage the robot workforce and respond to the rise of automated and artificial intelligence?
Indeed, should Wales set a national priority of becoming a high-skilled, quality jobs nation in the same way that South Asian countries have fine-tuned their learning to prioritise digital developments over all other skills.
We have an advantage in that our SME-based economy is increasingly focused on agility, responsiveness and innovation. This just makes us better SMEs – we have to build on that base so that we become a nation of innovative and enterprising entrepreneurs. Those who are starting up small businesses must have access to the full gambit of support which will help them develop, grow and sustain their business success. In particular, business support must avoid creating dependency by just providing funding and administrative support and move to investing in the policy, skills and incentives that enable sustainable business growth.
Another challenge facing Wales is that key sectors such as life science, computational, digital and cyber simply cannot get enough of the capabilities they need. That raises the question of whether as a nation are we doing enough to encourage the next generation to consider roles that we ourselves have little connection with or cannot envisage.
All this underlines a need to urgently engage with and retain our best and brightest as they come out of our schools, colleges, universities and apprenticeships. There is little point winning investment in the semi-conductor catapult if we cannot feed its need for workers within our own economy. Creating greater synergy between business needs with the ambitions of young people today is not an easy task but policy surely needs to be developed to lock in the virtuous cycle of skills investment that brings social benefits in the form of good quality and well rewarded jobs.
This brings us to the question of who should be responsible for providing those future skills? The march of devolved powers, and the spending that goes with it, places this challenge fairly and squarely with the City Regions. Within South Wales skills are already at the door of the bodies governing the Cardiff Capital City Region and the Swansea Bay City Growth Deal. Between them they hold the purse strings on access to over £3bn of spending over two decades, which sounds a lot, but in real terms is a drop in the ocean every budget year. That means they will have to work out how to prioritise what money should be spent and what outcomes they are looking for.
The advantage City Regions have is that they are well-placed to design the systems across sectors. They could support joint commissioning across colleges and sixth forms, commercial apprenticeships and enabling services that get people back into the right sort of work. This effort, though, needs to be properly targeted and avoid simply training workers for sectors that are going to be in decline. A range of jobs from call centres to accountants are likely to be replaced by machine learning and AI and those changes need to be reflected in the training provided to the next generation of workers.
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In the long-term, the ambition has to be to set industry and employment alongside education and skills so that one is seen as a natural progression from the other. In the mid-term the aim could be to develop primary connections with industrial and new businesses whether through placements, exploration or competition. In the short-term there is a need to ensure that companies receiving Welsh investment repay that investment, not simply with numbers of jobs created or retained (age old measures that create arguments over definitions) but with measures of economic value generated. This should include levels of social and economic investment in the nation’s future, and the active support of links with education, colleges and universities. Too many businesses do not make time for this or look to get away with not doing so.
As we face the prospect of a new political leadership for Wales decisions will need to be made about whether to prioritise the needs of business and the voice of industry and put them, and the skills they need, at the heart of our economic future. That will require courageous new thinking and an understanding that by generating wealth through business success the social needs of the country can be met.
Karen Cherrett is an economic development and local public services specialist at PA Consulting