Upskilling is crucial for the successful digital transformation of business
Within 20 years, 90% of all jobs will require digital skills but two-thirds of the workforce will already have left the education system. If an industrial sector that employs around three million workers is to survive, some two million people will need to be upskilled or reskilled in the workplace
A lack of digital skills is the most significant barrier preventing the UK achieving its goal of being a world leader in industrial digital technologies. Yet employers are continuing to under-invest in training in a sector where the skills shortage is particularly acute, says a report by the Made Smarter Review.
About 16.5 million people in the UK need to be skilled to become ‘digital workers’ and ‘digital makers’ but there are 10.5 million people currently lacking basic online skills, the majority of whom are aged over 55, and many of whom are working in sectors where digitalisation will be crucial to keep the UK competitive internationally.
The pace of change unleashed by digitalisation means that around two-thirds of children in primary school today will work in jobs which do not even exist yet, according to the report. Added to this is the fact that individuals will have a number of careers over their working lives and will need to continually reskill to be relevant in the marketplace.
But UK employers spend half as much on continuing vocational training as the EU average and employer investment per employee in training declined by 13.6% for each employee in real terms between 2007 and 2015. Meanwhile, the adult skills budget was cut by 41% between 2010/11 and 2015/16 and the criteria for access to funding have been tightened.
A recent study on the impact of digital change on skills and employment in Germany suggests that the “ability to plan and organise, to act autonomously”, combined with company-specific and occupation-specific working experience, are crucial for the successful digital transformation of businesses. Last year a report by PwC found that the biggest challenges for UK firms in adopting industrial digital technologies remained a lack of digital culture, talent and a clear digital operations vision.
Businesses involved in the review identified the problem of inadequate skills in all the core areas of industrial digital technology. For example, in artificial intelligence (AI) there is a perceived lack of the skills necessary to understand, develop and deploy AI solutions while a potentially larger concern is the ability of the existing workforce to work alongside AI technologies.
Similarly, in the field of robots a shortage of skills is seen as one of five core issues slowing the uptake of manufacturing automation (the others being public perception, lack of ambition, adversity to risk and finance). The UK has only 33 robots per 10,000 employees (compared with 93 in the US and 170 in Germany) and the gap is widening. Germany invests 6.6 times more than the UK in automation, although its manufacturing sector is only 2.7 times the UK’s in size.
In light of this, the Made Smarter Review has recommended that one million industrial workers are upskilled in the next five years to enable digital technologies to be deployed and successfully exploited.
“The existing skills system and the training provided is focused on job requirements for today, not for the future. There is a lack of expertise within higher education, further education and schools to support employer needs,” the review says. “The immediate priority is thus for industry and government to work together to increase the level of industrial digital technology skills in the existing workforce.”
This will be achieved through the following:
- Increasing investment and uptake in skills acquisition
- Better identifying future skills requirements
- Improving the provision of and access to quality training to support those future skills
- Creating an agile skills development system able to respond to rapidly changing market needs
- Creating a culture of lifelong learning and more visible career pathways for adults
The review proposes a number of recommendations to reskill and upskill workers, with a particular focus on small and medium sized businesses (which represent a third of industrial sector employees). These include the establishment of a central coordinating body for industrial digital skills, in the form of a Made Smarter Skills Strategy and Implementation Group (SSIG), to promote good practice and innovation in skills development through an open partnership of employers, universities, private training providers, experts in online learning delivery and professional bodies.
Andrew Churchill, managing director of precision engineering business JJ Churchill and a review contributor, says that to stand in the way of automation and industrial digitisation would be a “singular disservice to employees” as other competing economies are already highly active in this area.
“Instead we need to retain existing employees’ skills and experience while augmenting with relevant industrial digitisation knowledge. Without a central coordinating body for skills and some targeted retraining and reskilling incentives, many of our supply-chain SME will inevitably be left behind – this would be to the detriment of the larger supply-networks in which they operate and to the economy as a whole,” he says.
The biggest challenges for UK firms in adopting industrial digital technologies remain a lack of digital culture, talent and a clear digital operations vision