One oft-stated goal of this government is to make the UK a global science and technology superpower; another is to “level up” the economy across the country, as set out in its recent levelling up white paper.
In many spheres, these two goals are linked, not least through the government’s plan for growth, with its three pillars of investment – infrastructure, skills and innovation. Key to achieving progress in these areas is people: do we have the right individuals, in the right place and with the right skills?
A new Royal Society report explores “absorptive capacity” – a term used to describe the ability of people to understand and apply new ideas and approaches – with a particular focus on differences between and within UK regions. Sufficient absorptive capacity is crucial if ideas, developed within the research community, are to be brought to bear on problems associated with, for instance, manufacturing to create novel products or to improve efficiency in production.
Levelling up will only be successfully achieved if the right people are in the right places to deliver the benefits of innovation wherever it may be found. Similarly, the UK will only get the most from promised increases in public and private R&D investment up to 2027 if we have a sufficient volume and proportion of appropriately skilled people to absorb the uplifts in funding effectively.
The link between prosperity and absorptive capacity
Between 2010 and 2020, the largest growth in jobs in the UK took place in the professional, scientific, and technical activities sector – a sector with above average gross earnings in 2020. These openings were both for graduates and for those with intermediate/level four and five skills. The latter have previously been identified in reports for the Gatsby Foundation and Royal Society as being in short supply, and challenged further by an ageing workforce.
Most of the current report analyses data at the NUTS1 level (English regions, Scotland, Wales and Northern Ireland). Our report focuses on six NUTS3 (local authority) regions for closer analysis, using local quotient analysis, to explore the differences in divergences and needs at this more granular level. This analysis suggests that, at both regional and local level, there is a link between economic prosperity and higher than average concentrations of occupations relevant to the concept of absorptive capacity.
Even in comparatively thriving regions, such as London and the south east, there is considerable heterogeneity in levels of absorptive capacity, as well as economic strength. To put it another way, the challenge of levelling up is not limited to narrowing a north-south skills divide or the gap between the greater south east and the rest. A coherent, holistic policy response is needed which supports all parts of the education system, in all parts of the country.
It is clear that the systemic failures that discourage mobility between sectors – notably between research institutions and industry – hinder the diffusion of ideas for all levels of experience. Improved interactions between local industry and educational establishments would be beneficial in ensuring that regional absorptive capacity is increased. Given the ongoing UK Research and Innovation consultation on the shape of postgraduate training, there is a chance to encourage, even mandate, more exposure of PhD students to industrial and commercial environments.
At intermediate skill levels, the lack of workers with level four or five qualifications points to the problems in the education system, with a confused landscape of funding and courses – which the recent response to the Augar Review has not resolved – and the immediate issue of the discontinuation of the well-established and well-regarded BTECs. These qualifications are being replaced by the unproven T Levels, with their requirement of approximately 45 days working in industry, and for which placements seem to be in short supply.
However, there is not only an issue regarding those entering the workforce; there is also a crucial need to ensure ongoing adult upskilling, as the needs of industry evolve. The proposed Lifelong Loan Entitlement offers one route whereby this may become possible for many adults, but the details of the scheme, as well as the source of its funding, remain sparse. Again, this will require a locally coherent approach between those who deliver the training, and industry.
Fundamental to the success of our economy is ensuring sufficient people obtain the right skills. Our schools have significant problems in providing high quality STEM education, due to an inadequate supply of qualified teachers in some disciplines – most notably in physics, core for those wanting to enter an engineering discipline or trade – and severe problems in teacher retention, meaning a particular shortage of experienced teachers. There is a need for the funded provision of ongoing subject-focused CPD during a teacher’s lifetime, and encouragement of interactions between them and local industries to help inform what the future needs are for their students.
This country will not fulfil the aims of the government without an improved, and coherent, landscape of technical and scientific education at all levels. Ideas developed in universities or other industries will not be able to be picked up if the workforce lacks the relevant skills to absorb new developments to enable them to introduce these into their own workplace. The government must act to ensure that the UK’s absorptive capacity is optimised to achieve these ends.