Positive interventions for training employed adults must be at the heart of UK economic renewal.
Tom Stannard: Leave areas must prepare for the fourth industrial revolution
Since the EU referendum, councils have grappled with the meaning of the result, worrying about the impact of withdrawing from the EU on their communities. Two of the biggest worries are inward investment and the impact on local labour markets.
I spend a lot of time talking to businesses across Wakefield about their concerns as we approach the looming withdrawal date. Their biggest concerns are uncertainty, the role tariffs may play in managing their cashflow, R&D and investment plans over the medium term, and workforce issues. The latter is particularly true for companies with many EU nationals in a stable workforce, and those with a lot of seasonal migrant labour.
Many of us live and work in leave-voting areas of the UK. Across Yorkshire & the Humber, the electorate voted to leave by a clear margin (1.58 million to 1.16 million votes). Leeds is well known as a core remain city, whereas in Wakefield 58,877 voted to remain and 116,165 to leave. This pattern largely followed patterns of historic economic disadvantage and deprivation.
The dynamics within our labour markets are tricky to pin down, but exhibit some common characteristics. Currently, they enjoy close to full employment. Typically, they have similar skills profiles when viewed at the extremes: much higher proportions of locals with low level or no qualifications at all than national or regional averages, and much lower proportions of residents with level 4+ or higher-level skills qualifications.
The major challenge is to improve labour market mobility and ability to progress their careers and earn higher wages in areas of post-industrial decline with a lot of low skill, low wage employment replacing traditional industries.
But it’s also vital to bust certain myths about the types of employment that now characterise these regional economies. In Wakefield though we do have a well-connected regional economy with a lot of employment in logistics, it is not necessarily the case that it is a low skill, low wage sector.
Several of our large international logistics firms increasingly run fully-automated facilities. While they may employ fewer staff, they are hiring predominantly high-skilled machine operatives and robotics engineers to design, operate and maintain the increasingly complex machinery of the future. This is true ‘fourth industrial revolution’ labour market dynamics.
As the World Economic Forum recently showed, we must challenge the idea that robotics and automation will destroy employment. The forum’s 2018 Future of Jobs report estimates that among large, non-agricultural firms, 75 million jobs may be “displaced” by technology, but 133 million will emerge across the globe.
If sectors are diversifying, and automation sees a net positive outlook for employment growth over the medium term, how can we also create a net positive outlook for our residents and local communities in hard pressed, leave-voting areas? The answer lies in interventions to assist skills and progression for people already working.
Many of our residents seem to government or national employment programmes to be enjoying life under near-full employment, but really are struggling to make ends meet. My teams engage with thousands who work but are underemployed, have few or no qualifications, and frequently have more than one job to make ends meet.
We must provide productive labour market interventions to help these residents build their skills and progress their careers, ensuring they stop forming the great ‘missing middle’ that feels forgotten by many national programmes.
In Wakefield we are now designing the in-work progression services of the future, helping working age adults to train, improving their career prospects, earnings and family and community wellbeing. This is tough given the impact of austerity across many skills provider budgets, but it’s critical to ensure communities are properly supported for the fourth industrial revolution.
Above all, we must ensure these residents are not simply forgotten due to being employed, and left to blame the nearest available scapegoat – perhaps the multiple institutions of the EU – for being stuck in low wage, low skill employment. Positive interventions for training employed adults must be at the heart of UK economic renewal.
Tom Stannard, corporate director of regeneration and economic growth, Wakefield MDC, and deputy spokesperson, economic growth and housing, Solace