South West Regional Skills Enterprise and Employment Analysis 2007/2008

Final Report

4.1 International and regional comparisons

4.1.1 International Comparisons

The first measure of the skill gap that the economy faces is based on how the skills of the workforce (and the population more generally) compare with other countries. Any existing gap (or widening thereof as other countries continue to invest in skills) is likely to weaken the competitive position of the economy.

Overall, Skills in England 2005 found that:

• the UK performs relatively well on higher-level qualifications compared to the OECD. Even so, a much higher proportion of the population in countries such as the US and Canada holds higher-level qualifications than in the UK;
• the UK has a smaller than average proportion of the population with intermediate skill levels, and is ranked 20th across the 30 countries of the OECD;
• the UK has more people with low qualification levels than many major comparators and is ranked 18th across the OECD;
• on average, people spend a relatively long period in the education system compared to the OECD average, with many people going on to gain a first degree (at least 16 years of education);
• the post-16 participation rate for those immediately continuing their secondary education is lower in the UK (at 75%, compared with the OECD average of 82%);
• according to the latest Skills Audit(14), around 64% of the UK workforce were qualified to Level 2 or better in 2003, lower than the USA (73%), France (77%) and Germany (85%).

The Leitch Interim Report, published in December 2005, found that the UK’s skills base lags behind that of many advanced countries, concluding that this is the product of historic failures in the education and training system.

Evidence from the Leitch Interim Report suggests that the Government’s targets for educational attainment will only be met if the rates of improvement and acquisition of qualifications observed over the last ten years are repeated. The implication is that other countries are likely to pull even further ahead unless these targets are achieved.

The Leitch Review has therefore concluded that the UK must commit itself to a world class skills base in order to secure prosperity and fairness in the new global economy. The Review has recommended moving the UK into the top eight in the world at each skill level by 2020, achieving the top quartile in the OECD.

This would represent a challenging target, even for a region as relatively well-skilled as the South West.

4.1.2 Regional Comparisons

If we look at the relative qualification levels across the regions, we find that the region is one of the more qualified regions of England. It has lower levels of people with no or low level skills, and a higher proportion of people with Level 3, 4 and higher level skills.

Figure 1: Qualifications of the working age population, by region, 2006 (Click image to open in new window)

Source: APS, ONS, NOMIS data service, 2006

Conclusions

The UK performs less well in terms of skills when compared to other countries. The Leitch Review proposes tough new targets for improving the UK’s international position. If adopted, these targets will be challenging even for regions as relatively well skilled as the South West.

The relatively strong position of the region when compared to other regions in the England should not be cause for complacency. When compared against the region’s productivity performance, this implies that the region is operating in a low-skills equilibrium and is underutilising the skills at its disposal (see Section 4.8). This argues for strategies to improve employer demand for skills and the application of those skills in the workplace.

(14) H Steedman et al, International Comparisons of Qualifications: Skills Audit Update, Research Report RR548, DTI and DfES, 2004