South West Regional Skills Enterprise and Employment Analysis 2007/2008

Final Report

4 SKILLS IN THE SOUTH WEST – GAPS AND PRIORITIES

In this section, we examine the key skill gaps and priorities emerging within the region both now and in the mid-term future. Many government policy statements assert that skills are increasingly important and more are needed. But what is actually required in the South West? There is a need to be clear about the particular type, level or class of skills that are in demand. However, there are no simple answers and detailed, indicative planning of skill needs is not a practical possibility. Regular and detailed monitoring can help to identify general trends and the implications that these have for particular skill requirements.

Skills in England 2005 suggests that skill gaps can be viewed in a number of ways but perhaps the most significant are:

• Comparisons with other countries or regions;
• Various measures based on employers’ perceptions (as measured by the National Employer Skills Survey 2005);
• Those measured by comparing expected future changes with the current position (as measured by Working Futures);
• Indicators provided by market signals such as wages.

The most common ways of measuring skills remain with reference to occupation and qualification. But the importance of various generic as opposed to technical skills, and transferable as opposed to non-transferable skills, are increasingly being emphasised. Evidence emerging in relation to high-performance workplaces (HPWs) suggests some ways in which the concept of skill might need to be reviewed, within the wider context of workplace organisation and organisational performance. Research also highlights the role of leadership and management skills and the ways in which skills are utilised within the workplace. This is not just about what skills we have within the region but the extent to which they are applied in order to improve productivity. We have therefore reflected these issues in the analysis (see Section 4.9).

Skills needs also vary significantly by sector. A more in-depth analysis of sector needs is required if the regional response is to be effectively directed. As part of this Regional Analysis, SLIM has undertaken a detailed analysis of Sector Skills Agreements (SSAs) and the Skills Needs Assessments of SSCs where SSAs do not exist. From this we are able to identify sector priorities, cross-cutting issues and detailed skill requirements of the sectors (see Section 4.6).

This analysis also looks at future skill needs in the region, drawing on the Working Futures report and the Leitch Interim Review. Whilst employment growth will be important in terms of the demand for skills, replacement demand will be a far more significant factor in driving the demand for skills. This forecasting information may be a useful guide to future trends, but should be the start of a dialogue about future skills needs, rather than a definitive indicator for future needs.

It is also important to place current and future demand within the context of the supply of skills in the workforce and the extent to which appropriate investment in skills is taking place. Very little information exists about how employers invest in skills. Whilst various studies go some way to aiding our understanding of employer investment, knowledge remains scant. On the other hand, there is a lot of information about how public agencies are prioritising their resources and investing in skills and the skills infrastructure. This is presented in Section 7.

In this section we look at the key findings of this evidence and draw out some conclusions for regional policy.