The skills agenda is no longer nebulous to businesses, nor the preserve of a few sectors – this is something creeping up on all of us.
The situation is coming to a head because of the confluence of several long-term macro trends.
Scotland’s population is ageing to such an extent that it will affect our labour market. By 2041, our working age population is only expected to grow by a single percentage point, compared with 8% in the UK. Over the same period, our population of over 75s will nearly double, growing by 79%.
Even set against conservative estimates of GDP growth in the next two decades, this effectively means the jobs created in our economy will not realistically be served by those currently working in it.
And while that sounds abstract, some of the seismic changes taking place in the economy now mean the effects of these trends are being felt already. The right skills for newly created roles in growing businesses are in ever-shorter supply. Whether caused by Brexit or Covid-19, climate change or international conflict, short term disruptions serve to emphasise the long-term pain point.
It’s why there aren’t enough lorry drivers to serve the logistics industry; why there were nearly 30,000 vacant positions in the construction industry at the end of last year; and why law firms are competing for talent voraciously. From lorries to law, it’s the same problem – not enough talent to meet demand.
But it’s when you put this into a wider context that things look daunting.
There are pronounced issues in many sectors struggling to balance short term stop-gapping with long-term planning. One of the most common future requirements across sectors are so-called meta-skills, defined by Skills Development Scotland as “timeless, higher order skills that create adaptive learners and promote success in whatever context the future brings”.
A recent McKinsey report included quite a startling revelation about the long-term prospects for industries looking to upskill its workforce. It suggested that, if workers are to realise the full benefits of reskilling over the next decade, more than 90 percent of the UK workforce will need to be retrained.
This couldn’t be more pertinent to Scotland. Our workforce will need new skills to keep up with changing ways of working and the increasing involvement of technology in business.
And while some of the extra capacity in the labour market will undoubtedly be automated or reconfigured into artificial intelligence and machine learning, it leaves too much to chance to think that robots and algorithms can solve this issue alone.
Meta skills are themselves hard to envisage in the current labour market. Phrases like self-management, social intelligence, critical thinking and creativity do not pervade all sectors and are hardly commonplace in job specifications of today.
The point is, we must make it so. Skills Development Scotland suggests meta skills must be developed across the entire education and skills system in Scotland. While this is hard to argue against, there must surely be room for more pragmatic, business-led models that help our companies take decisions now that will serve them well in the future.
Lessons from overseas are hardly instructive, though there are examples of policy-driven thinking in this space. For example, the German government legislated to make it easier for those with vocational skills to migrate there. India, too, has taken to policy levers to change the game. India’s goal is to thrive in a knowledge economy, arming its huge working population with skills, education and qualifications to keep up with its growth.
The Edinburgh Futures Institute acknowledges the interconnections between the biggest challenges in society. The skills gap is a good example: whether the approach is education-led, business-led or driven by government policy, none will succeed in isolation.
Many business leaders have now refocused their attention to life after Covid-19. If we are to genuinely achieve the so-called “no regrets” recovery, it will be vital to find room in our thinking for meta skills, for reskilling staff and for embracing the benefits of technology - not just today, but for decades to come.