SOLVING THE SKILLS GAP

On 30th October 2003, at a joint Forum of the Advanced Institute of Management Research (AIM) and the Councilfor Industry and Higher Education (CIHE) academics, practitioners and policy makers discussed dimensions of theUK’s skills challenge. This report, which summarises the discussions that took place at the Forum and grounds themin the academic literature, argues:1. The skills challenge in Britain has persisted over the last three decades despite a raft of policies, suggesting thatthere is an inherent cultural or systemic problem.• 8 million people in Britain lack basic skills, and nearly 7 million adults are functionally illiterate, with readingages below that of the average 11 year old.• International comparisons suggest that the UK is around the average for OECD countries with people qualifiedto NVQ level 2 and 3, but there are more older workers with these skills than younger workers (DTI, 2001;Campbell et al, 2001). The growth in the proportion of the workforce in the UK with level 2 or equivalent lagsalmost all the OECD countries (Campbell et al., 2001). The proportion of the 25-29 year olds who havecompleted secondary education is 64 percent compared to an OECD average of 72 percent. Out of the OECDcountries the UK is ranked 16 out of 26 (OECD, 2001). Campbell et al. (2001) suggest that the UK’s measurefor (NVQ2) is lower than the French (baccalaureat), hence the UK’s performance is even lower than it appears.Further, the UK performs poorly in terms of the literacy of those who have completed secondary education(OECD, 2001).• A disparity with the US exists in terms of high level skills (23 percent in US v 15 percent in UK) and withGermany in terms of intermediate skills (55 percent in Germany v 30 percent in UK).• This international disparity is particularly severe outside the South East of England – 21percent of employeesare graduates in the South East versus 9 percent in the North East in 2000. The gap is also increasing – growthrates in terms of numbers of graduates between 2000 and 1993 were 7 per