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Solent Skills Advisory Panel Local Skills and Labour Market Analysis

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Solent Skills Advisory Panel Local Skills and Labour Market Analysis Solent Skills Advisory Panel Local Skills and Labour Market Analysis June 2020 1 2 Contents Foreword 1. Introduction 7 2. Economic & Labour Market Landscape in the Solent 10 2.1 Demographics 11 2.1.1 Population by Broad Age Group 11 2.1.2 Internal and International Migration 14 2.2 Labour Market 17 2.2.1 Economic Activity 17 2.2.2 Employment 20 2.2.3 Unemployment 21 2.2.4 Commuting 23 2.3 Solent Businesses 25 2.4 Economic Landscape 28 2.4.1 Gateway Economy 28 2.4.2 Economic Output 29 2.4.3 Economic Output by Sector 32 2.5 Productivity 35 3. The Demand for Skills in the Solent 39 3.1 Industrial Structure 41 3.2 Occupational Structure 46 3.3 Skills Demand by Industry and Occupation 49 3.4 Job Vacancies and Skills Demand 51 3.5 Future Skills Demand 52 3.5.1 Expansion Demand and Replacement Demand 53 3.5.2 Net Skills Requirement by Occupation & Qualification 54 3.6 4th Industrial Revolution and Skills 58 3.6.1 Automation and Future of Employment in Solent 60 3.7 Skills for the Future 64 3 4. The Supply of Skills in 66 Solent 4.1 Skills in the Workforce: 67 4.1.1 Advanced Skills 70 4.1.2 Intermediate Skills 73 4.1.3 Low Skills 76 4.2 Skills System 79 4.2.1 Secondary Education - Participation and Attainment 79 4.2.2 Further Education - Learning and Training 83 4.2.3 Further Education - Education and Training 85 4.2.4 Further Education - Apprenticeships 91 4.2.5 Higher Education 97 4.2.6 Employer Sponsored Training 103 4.3 Skills Deprivation and Inequality 105 4.3.1 Young People Not in Education, Employment or Training (NEETs) 105 4.3.2 Education and Skills Deprivation 106 5. Skills Mismatch in the Solent 108 5.1 Skills Shortages 109 5.2 Skills Gaps 112 5.3 Unmet Demand for Skills in Solent 116 5.4 Skills Underutilisation 117 Data Annex 119 A.1 Projected Net Job Requirement by Qualification 120 A.2 Education & Training Starts by Sector Subject Area and Qualification 121 A.3 Education & Training – Major FE and Sixth Form Colleges 124 A.4 Education & Training – Non-Nationals by Qualification 125 Glossary of Terms 126 4 Foreword As we publish this analysis, we are acutely aware that organisations and individuals are facing a number of challenges as a result of the global pandemic and many are looking to formulate actions or recovery plans as they seek to rise to such challenges. We are entering a new era where global challenges, technology advancements and remote platforms are changing the way people think about work and this will influence and shape the way businesses operate as they move forward with their recovery plans and look to the future. The work of the Solent Skills Advisory Panel (SAP), has never been more important, ensuring the Solent economy and our businesses have access to the skills and talent they need and also to ensure that our residents have the opportunities to develop skills for the future. The Solent Skills Advisory Panel (SAP) brings together local employers and skills providers to pool knowledge on skills and labour market needs, and to work together to understand and address key local challenges. This includes both immediate needs and challenges and looking at what is required to adapt to future labour market changes and to grasp future opportunities. This will help colleges, universities and other providers deliver the skills required by employers, now and in the future. This Local Skills and Labour Market Analysis is an important first step, providing a forensic understanding of the existing and future skills gaps and employment priorities. This analysis has already supported our wider evidence base for our new economic strategy - Solent 2050 - which will be published this summer, and will now feed into the development of a Skills Action Plan, which will be developed around identifying priorities and responding local skills needs, with each priority linked to specific actions which state how they will be addressed. The priorities this analysis points to are: the importance of the skills our world- leading maritime sector needs to remain at the vanguard of maritime innovation; the impact of autonomy on the demand for labour and the skills needed by businesses; the need to ensure a strong supply of labour to replace those that will be moving out of the labour market; and also the importance of softer skills, such as social skills and communication skills. Of course, we are publishing this Local Skills and Labour Market Analysis at time when the economy is in the throes of an economic shock unlike any other in living memory, brought about by the COVID-19 pandemic. This is having a devastating impact on many business and communities and moving forward it will be our people that drive this recovery through their resilience and ability to adapt, supported by major advances in the uptake of technology to afford new ways of working. This will have a lasting legacy on the way businesses operate, the way we work, and the skills businesses need and we need to pivot our skills and training to support the transition to this new world This Local Skills and Labour Market Analysis acknowledges the impacts of COVID-19, but we will update our analysis in the months to come as the data emerges so that we fully understand the impact of COVID- 19 on the skills ecosystem, and what this means for the skills our businesses need. 5 But in the immediate term, this Local Skills and Labour Market Analysis does identify the key priorities on which our Skills Action Plan will be developed, and, recognising the need to support economic recovery the SAP will develop an interim Skill Action Plan that will identify the key short-term actions to ensure the skills system plays a key role in supporting our businesses and communities to restart, restore and recover. 6 1 Introduction From the industrial revolution to the knowledge based digital economy of the 21st century, accumulation of knowledge and technological progress have played a central part in the process of economic development. Economic development is a matter of growth and growth depends on the productivity enhancing skills of the population. This implies that differences in economic growth can be largely explained by spatial disparities in the accumulation of human capital. In the new technologically driven age, human capital (knowledge and skills), rather than natural resources will be the main driver of regional and local competitiveness and productivity growth. Therefore, investment in skills is a strategic priority for the Solent Local Enterprise Partnership (LEP). As such, the long-term economic competitiveness and wellbeing of the Solent area will crucially depend on a steady supply of relevant skills and ability of its residents to compete in the local labour market. Failure to ensure the appropriate supply of skills that will be needed in the years to come would involve a greater reliance on in-commuters and/or migrant labour. This would also lead to an increase in inequality and a decline in competitiveness through for example, the business community seeing the area as a less attractive location for business investment and growth. The Solent Local Enterprise Partnership (LEP) The emerging Solent 2050 strategic framework has been developed and has been informed by a detailed evidence base and policy review as well as wide-ranging consultation, in which the LEP has consulted with over 1,600 people and over 500 businesses. The framework outlines that we want the Solent to be the best place to live, work and trade in the UK. Our vision is that the Solent in 2050 will be at the helm of coastal renaissance and pioneering approaches to climate change. Our mission to achieve this vision has five emerging principles: • A world-leading marine and maritime economy. • Pioneering approaches to climate change and decarbonisation. • The UK’s capital for coastal renaissance. • A thriving visitor and cultural economy • Developing a world-class talent base. In addition, there will be a sixth priority focusing on business environment and taking into account the economic impact of Covid-19. This will be captured in our dedicated economic recovery plan. The Solent 2050 Strategy is currently being finalised and the Skills Action Plan will be developed in accordance with the direction set by the Solent 2050 Strategy and this local skills and labour market analysis. 7 Skills Advisory Panels Skills Advisory Panels have been set up with the aim of bringing together employers and skills providers to pool knowledge on skills and labour market needs, and to work together to understand and address key local challenges. Solent’s Skills Advisory Panel is expected to provide a strong leadership role on skills in the Solent LEP area and to engage with local employers and training providers. In addition to this work and recognising the seismic impact of the Covid19 pandemic on our economy, the Solent LEP will be preparing a recovery plan for our economy through 2020 and beyond. This will include the provision of sustained support to our business community, skills enhancements through our Skills Advisory Panel to support our resident workforce, and a renewed emphasis on our capital investment programme for the area. This document provides the main evidence base on the existing local labour market and skills in the Solent and identifies key areas of future skill needs relating to projected employment and occupational needs, and the challenges facing the labour market and skills provision at the outset of the 4th industrial revolution.
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