Few people reading this won’t be aware that the UK’s productivity gap with other developed countries is a longstanding threat to our international competitiveness in highly uncertain, volatile times.
Stubbornly propping up the G7 performance table, the deficit with comparable nations is around 30%. While they have recovered from the financial crisis, the UK has virtually flatlined. Indeed, had robust pre-crisis productivity improvement rates continued, our economy would be 25% more efficient than it is.
Productivity gaps exist in many sectors, including retail, distribution, hospitality, information and communications (ICT), financial services, insurance, construction, mining, utilities and manufacturing. In addition, there are considerable regional differences. The low productivity regions are East of England, East Midlands, North East, North West, South West, Wales and Yorkshire & Humber.
While there may be many root causes, the simple overriding problem is that we don’t skill sufficient numbers of workers sufficiently enough for them to give their counterparts in Germany, France or China a run for their money. Nor do we see to it that these skills are constantly updated with fresh learning and development programmes that keep pace with fast changing workplaces and emerging markets.
This means that the problem is as true for those who have career years under their belts as it is for new starters.
Digital skills in the UK
Nowhere is it more apparent than our preparations to seize the opportunities offered by the technological revolution that is transforming how we live and work at an accelerating rate. Never before has a driver for change been so rapid. Digital and AI advances will fundamentally change jobs and working patterns, with many consigned to history. No sector will be unaffected; indeed, they are already overhauling the very character of entire industries, how they operate and the behaviours and expectations of those who spend money with them.
A perfect example is retail, which is undergoing a dramatic, far from painless, shift from bricks to clicks, as sales and marketing leave the high street for the online space. Customers’ migration to the convenience of screen browsing and home delivery is driving mounting store closures and, of course, jobs are being lost in the process. Or, rather, they are migrating and changing too; people are needed in different roles in different places and there is nothing to stop former shop workers fulfilling them – IF they can acquire the digital competencies needed to do so.
They are not alone. There are predictions that up to 37% of all current jobs will be automated in the coming decade. Workers will need to be trained up to handle the array of entirely new roles yet to be created. Many of these have not even been thought of today – who would have imagined just a decade ago that hundreds of thousands would be employed in social media, online retail, gaming and artificial intelligence (AI)?
It all means that they must have the new skills that will enable them to navigate the changes or even more employers will struggle with talent shortages and the productivity gap will widen even further.
And yet we are currently unprepared to capitalise on the fourth industrial revolution - to survive, never mind thrive and gain competitive advantage. The government’s industrial strategy predicts that “within two decades, 90% of jobs will require some digital proficiency, yet nearly a quarter of adults lack basic digital skills.”
With two thirds of 2030’s workforce already in the labour pool, we don’t have to look into the future to find the signs of trouble. The UK is already in the grips of a digital skills crisis, with over a third of employers reporting problems when trying to recruit those with them in the last year.
It is already hitting our performance on the international stage. The 2018 World Economic Forum data reported that the UK slipped two places in the ranking of the world’s most competitive economies, with communication technology identified as our greatest area of weakness.
A report by global consulting firm, Accenture, late last year, predicted that if the digital skills gap continues, our economy could lose £141.5 bn of the potential GDP growth that intelligent technologies will present over the next ten years.
How are we tackling this?
NOCN is launching dynamic new Digital Productivity qualifications, in partnership with leading Microsoft training and certification provider, Prodigy Learning. The relevant end-to-end courses (L2 and L3) will give the workforce the key skills needed to improve IT efficiencies.
With employees, learners and new work entrants gaining recognised, marketable certification and validation, employers will benefit from a pipeline of highly productive people with vital Office and related digital skills.
Local economies will attract inward investment and be able to grow their inclusive, technologically skilled workforces, who will be supported into employment and in their career progression, thus enjoying accelerated upward social mobility as a result.
And with the work-based schemes set to help SMEs’ grow and boost exports, they will help the engine house of the UK economy move up a gear and steam ahead with enhanced in-house skills pools and raised productivity rates.
Graham Hasting-Evans, Managing Director, NOCN