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Diversity and the Economy DIVERSITY_Cover_FINAL 18/5/06 4:57 pm Page 1 diversity and the economy The Smith Institute The Smith Institute is an independent think tank that has been set up to look at issues which flow from the changing relationship between social values and economic imperatives. If you would like to know more about the Smith Institute please write to: diversity and the economy diversity By Tony Pilch The Director The Smith Institute 3rd Floor 52 Grosvenor Gardens London SW1W 0AW Telephone +44 (0)20 7823 4240 Fax +44 (0)20 7823 4823 Email [email protected] Website www.smith-institute.org.uk Designed and produced by Owen & Owen 2006 Diversity_Text_FINAL.qxd 18/5/06 4:41 pm Page 1 THE SMITH INSTITUTE diversity and the economy By Tony Pilch Published by the Smith Institute ISBN 1 905370 04 0 © The Smith Institute 2006 Diversity_Text_FINAL.qxd 18/5/06 4:41 pm Page 2 THE SMITH INSTITUTE Contents Preface By Wilf Stevenson, Director, Smith Institute 3 Foreword Meg Munn, MP for Sheffield Heeley and Under Secretary of State for 4 Women and Equality Part 1: Diversity and the economy 10 Part 2: A diverse regional population 18 Part 3: A diverse regional economy? 26 Part 4: Barriers to economic diversity 38 Part 5: The policy context 48 Part 6: Promoting economic diversity in the region 54 2 Diversity_Text_FINAL.qxd 18/5/06 4:41 pm Page 3 THE SMITH INSTITUTE Preface Wilf Stevenson, Director, Smith Institute The Smith Institute is an independent think-tank, which has been set up to undertake research and education in issues that flow from the changing relationship between social values and economic imperatives. In recent years the institute has centred its work on the policy implications arising from the interactions of equality, enterprise and equity. The Smith Institute has worked closely with the RDAs since they were established in 1998, holding national and regional events that have tracked the development of RDAs as well as helping to share best practice. We have also published a series of key pamphlets looking at the issues that affect the RDAs. As part of this agenda and because of the growing economic importance of diversity issues, the Smith Institute, in association with Yorkshire Forward, is delighted to be publishing Diversity and the economy. This pamphlet describes the economic importance of diversity and offers a series of recommendations to encourage the public and private sector to work together to ensure everyone has the opportunity, not just to access the labour market, but to help drive productivity by having higher levels of skills and being more innovative and entrepreneurial in the workplace. To encourage more employers to turn their equal opportunities policies into a reality, a multifaceted approach is required, involving public bodies becoming regional exemplars in taking measures to promote diversity within their own organisations; the establishment of more effective advice and assistance for employers; measures to encourage employers themselves to lead the way in raising awareness about the business and economic benefits of diversity; and an enhanced procurement strategy, using the purchasing power of public bodies to promote effective practice among employers. Just as private employers have a responsibility to do more to recruit from diverse pools, the public sector has a responsibility to develop effective services to help provide individuals with the skills and competencies employers need to succeed, involving general measures that apply to the full range of education, skills and employment. The Smith Institute gratefully acknowledges the support of Yorkshire Forward towards this publication. 3 Diversity_Text_FINAL.qxd 18/5/06 4:41 pm Page 4 THE SMITH INSTITUTE Foreword Meg Munn, MP for Sheffield Heeley and Undersecretary of State for Women and Equality In order to succeed in an ever more competitive and global economy we must use all the talents available – equality of opportunity and economic success really do go hand-in- hand. This important and timely report argues that future success for the Yorkshire & Humber region depends upon us using to the full the rich diversity of our local people. As member of parliament for a Yorkshire constituency, and minister for women and equality, I am delighted that Yorkshire Forward is championing the inclusion of all our population as we continue to create a successful regional economy. The role that Yorkshire Forward plays is crucial to our economic well-being – its goal is to transform our region through sustainable economic development. Diversity in the workforce appears to be a recent phenomenon. In fact our workforce has always been diverse; it is just that now some of the differences are more apparent. The growing number of women in the workforce over the past few years is evident, and in parts of the region in particular, the growth of the ethnic minority working population is significant. What is less readily obvious to most of us is the increasing number of people with disabilities who want to work. In addition to these changes, the age profile of the region’s workforce is beginning to shift substantially. One quote from the report highlights this: In two years’ time, the number of people over state pension age will overtake the number of children, across the country. In 10 years, only one in three of the British workforce will be a white man under the age of 45. In 20 years, more than half the population will be over 50. These demographic changes will happen whether we like it or not. Trying to ignore them will only ensure that our international competitors will succeed and we will fail. Understanding the implications of these changes to the workforce in the region gives us a chance to plan just how we adapt, to ensure we continue to enjoy a good standard of living. Only by taking a positive approach and using the opportunities these changes provide can we look confidently to the future. 4 Diversity_Text_FINAL.qxd 18/5/06 4:41 pm Page 5 THE SMITH INSTITUTE An increasingly important role for women In the area of economic activity, women have just as much to offer as men. Women are playing an increasingly important part in our economy – creating wealth and jobs. It is estimated that by 2010 there will be 2 million more jobs in the national economy, 80% of which will be filled by women. Ensuring economic gender equality is not just about what is right for women; it is in all our interests that we do so. Today more young women than young men gain degrees. However, that level of success is not carried through into work. Instead, many women work in lower-skilled, lower-paid jobs. Recent research by the Equal Opportunities Commission and Sheffield Hallam University found that more than 50% of women in part-time jobs were working below their skill level – talent squandered that could be increasing productivity and wealth. There is a clear association between sectors experiencing skills shortages and sectors in which women are underrepresented. An example is information technology, which accounts for almost 5% of the UK economy and will continue to increase in importance. In the next decade, employment in IT is set to grow at five to eight times the UK average. But the sector is at a disadvantage when only 20% of its workforce are women, compared with just under half of the UK’s national workforce. Around 70% of women who have science, engineering and technology qualifications are not working in sectors that use these skills. This is a significant loss to the economy; the country has paid for training that is not being used, businesses lose out by not having qualified women working for them, and many of the women lose out by not having a well-paid, interesting career in the sector. To remedy this situation, the government has launched the UK Resource Centre for Women in Science, Engineering & Technology. Based in Bradford, the centre works closely with business to help encourage the participation of more women in the science, engineering and technology sectors. The report outlines some of the barriers facing women, and concludes that business needs both to attract women into these areas of work, and then to retain them. The alarming statistics for these business sectors call for concerted efforts to tackle the masculine culture that drives women away and wastes their talent. The success of efforts to change this situation comes only where commitment permeates from the very top of an organisation downwards. 5 Diversity_Text_FINAL.qxd 18/5/06 4:41 pm Page 6 THE SMITH INSTITUTE Ethnic minorities Figures from the Ethnic Minority Task Force show that while the overall employment rate is 74.5%, for ethnic minorities it is only 59%. Over the next 10 years, ethnic minorities will account for more than half the growth in the working-age population. It is vital that we ensure that the skills and talents of all those from an ethnic minority background in our region are used. The report highlights the fact that not to do so – particularly in an area like Bradford, where over 20% of the population is from an ethnic minority – would be extremely foolish. As, on average, people from ethnic minority groups have fewer skills and qualifications than the population as a whole, a concerted effort is needed to ensure that they can take a full part in future prosperity. More than 40% of those of Asian or Asian British ethnicity hold only low-level qualifications or none at all, compared with around 30% of the white population. Some 50% of women from an ethnic minority are in employment, compared with 71% of white women.
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