It is impossible not to be moved reading Alan Milburn’s report on young people and work.
It is a moral failing of a country that has deprioritised young people that nearly one million people aged 16-14 are not in education, employment, or training. It is a fantasy to believe that a country can be successful when 60 per cent of young people who are NEET are not just out of work but actively not looking for work. It is a catastrophe that six in ten young people who are NEET today have never had a job, up from 4 in 10 in 2005.
As Milburn says it is a “moral crisis.” It is an abandonment of the hopes, dreams and possibilities of young people to stew in the tepid retreat of letting the market and the market alone decide who deserves success in their most formative years. It is the basic stripping of dignity in labour for a mistaken belief that the role of government has not been, is not, and cannot be, to create the conditions for good work. And, perhaps worse of all, it is a political cowardice where measures for the politically enfranchised like the pension triple lock are treated as sacrosanct while there is an active debate on whether minimum wages for young people may be too high. This is despite the Low Pay Commission, the government’s own advisory body, finding no evidence linking the increase in youth minimum wage to youth unemployment.
It is not the national cost of unemployment, or the shaky hiring practice of employers, that is the most alarming. It is the sense that young people are just opting out. That things are so bad young people feel their future has been stolen from them. Opting out of looking for work isn’t a character failing but a rational response to a broken promise that adulthood equals work and work equals stability. The statements from young people in the report speak to a cumulative sense that the path of job, family, and stability, just does not exist for them. They speak of skills they have that aren’t appreciated. Low life expectancies that render their work life cruelly short. The stunting effects of COVID on their desires to go out. And families doing their best to support their children in conditions of unbelievable pressure.
There is no evidence this generation is any less talented, committed, driven or able than the ones before them. They have been dealt an unusually cruel hand of a slow-motion economic collapse, a tight labour market characterised by low-churn thus depriving them of employment opportunities, and an onslaught of technological advances that have both deprived them of connection to one another and access to jobs.
At a time where universities are seeking to redefine their purpose in an era of constrained budgets, what greater mission could there be than getting young people back into work?
Work
It is fine to believe this is not a university’s job but universities do lots of things that aren’t their jobs and that is because the price, and the social obligation, of receiving large amounts of tax-payers money is to deploy it in ways that address the most pressing issues the country faces. To say this is not our job is to say that there is no role for universities in addressing deep social inequalities. It is a fine line to take but one that falls apart next time there is any funding for anything which isn’t purely teaching and research.
This does mean being clear about where universities have a role as it can’t be to do everything. One of the ways in which universities inadvertently undermine their own arguments is by arguing that more money means they could address ever deeper social problems. Instead, universities should argue that more funding might mean that can address fewer things more deeply, but sometimes their roles are simply as part of a wider ecosystem not as the centre of it.
To take research. There are dozens of papers that argue that more research investment means more growth and more growth means a more prosperous country. At a macro-scale this is true. Clearly, improving productivity, making firms more efficient, and bringing investment into places is good. At a micro-scale it is less clear that research led growth is the right tool to address every malaise the country faces, and in particular it might have little to say for youth unemployment.
It’s fine to believe research led economic growth can fix some things. It is an error to argue that it can fix everything. It is the sector writing cheques it cannot cash which undermines its credibility in asking for funding for the things it can actually do.
Undoubtedly, research can catalyse business investment through the creation of novel assets. One of the reasons why London is a tech hub for the country is that it has access to some of the leading global research in technology. Liverpool’s strength and investment in life sciences is born out of research that has had commercial applications in population health. The reason why the infrastructure of the Oxford-Cambridge arc makes economic sense is the connection of two of the UK’s leading assets.
This kind of economic growth undoubtedly has significant benefits. It benefits investors that want new roads, rails, and buildings, to grow their capital. It benefits companies that can become more profitable through adopting new technologies. And there are some, if not often diffuse and exceptionally hard to quantify, benefits in the supply chain for jobs to service the new kinds of technologies and buildings.
Research led economic growth can also play a role in growing productivity and closing regional inequalities. One of the big challenges with research policy is that there is a lack of specialisation. This is to say that there is little incentive for places to develop place-based specialisms as research funding follows researchers, and the configuration of research funding is not place-sensitive. The innovation fund by UKRI is a direct attempt to build greater place-based specialisms (albeit it now covers 17 areas of the country so looks like a national fund with lots of parts). As research by the government shows this kind of public R&D investment can leverage further capital benefits.
Doing something
The connection between research led growth and addressing other areas of the economic crisis seem much weaker. Ultimately, the current research funding landscape rewards peer reviewed high quality research. Its impact, and particularly its local impact, is a secondary consideration. There is no reward for the institutions that do modest research with outsized economic benefits.
This is not to say universities won’t do things they aren’t paid for but there is an economic reality that they focus on the things that are more sustainable to do. In any case, the argument that research creates value, firms turn this into more value, and then this creates lots of jobs that meet the needs of those furthest away from the labour is hard to prove. The chain of diffusion feels too long and there is an inverse relationship between the amount of money the government is spending on R&D and the levels of chronic youth unemployment.
In any case, if the same quantum of funding were available to address the countries deepest economic challenges through research spending or something else there are many times where the government may, or maybe even should, choose something else. In some places the best intervention to grow economies is not more lab space but better bus, rail, and road infrastructure. There are places where the best way to induce new employment is not through R&D tax relief but through capital incentives. There is also a reality that the creation of new jobs in places with chronic underemployment relies on the macro economic conditions that research has little engagement in.
Research clearly, demonstrably, and effectively creates some kinds of growth. This growth does not address every economic issue and its impacts are most felt in the places that have strong business bases to deploy that innovation. It is exceptionally hard to start a new cluster with only a research asset with few ways to make use of it.
Universities have an opportunity to both play a greater role in the national youth unemployment crisis and grow the economy more generally through research. The key to doing it is being clear on the limitations of research-led growth, being brave in playing a role in the country’s national mission, and having a plausible theory of change where more investment will address the nation’s greatest challenges.
