Regional Delivery Plan for Employment and Skills for South West and Central Wales Fourth Version March 2015 2014-2024.
Contents Foreword 1. Introduction & Background...1 2. Regional Economic Profile & Priorities...6 3. Making the Plan Happen: Implementation...62 4. Skills Performance Measures...72 Appendices Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Appendix 11a Appendix 11b Appendix 12 Appendix 13 Employers Voice Report...74 Headlines of Data Evidence Review...79 Policy Context...84 Background Analysis...89 Skills Analysis...102 Building Skills in Education...114 Transition into Work...119 Raising Demand and Improving Skills...123 Pipeline of Higher Education Strategic Developments...128 List of Regionally Important and Anchor Companies...133 Major Regional Developments & Investments...134 Planned Regional Developments Extracted From the Top 100 Infrastructure Investments...139 Provision Mapping...141 Frameworks & Projects...154
Foreword Our ambition is that by 2024, south west & central Wales will be a confident, ambitious, resilient and skilled region recognised for its thriving, vibrant, knowledge-rich, creative economy supported by technical, academic and commercial expertise. The aim of the Regional Delivery Plan for Employment and Skills is to motivate growth in the economy by transforming the learning experience for individuals and employers to create a sustainable, dynamic, entrepreneurial and innovative culture, responsive to future business opportunities. As reflected in the region s regeneration strategies 1, utilising the potential of our assets, whilst promoting equality, diversity and the Welsh Language is key to responding to the challenges of the diverse economy, demographics and geography of the region. The potential of our people, natural environment, culture and heritage should be maximised to develop and grow markets for future technologies, products and services that exploit the opportunities presented by a global economy. It is essential to recognise the role that employers play in this process. To increase productivity and deliver economic success in the region, businesses need to invest in increasing the skills of the workforce and inspire young people to achieve by offering them real-world experiences and meaningful work-placements. For this to be achieved, we need to build on partnerships that capitalise on the passion and commitment of inspirational entrepreneurs, leaders, teachers and advisors across the region. In line with the objectives of the Regional Learning Partnership South West and Central Wales (RLPSW&CW), our vision is: To increase productivity and grow higher value jobs by addressing barriers, developing employability, skills and progression pathways. In order to transform our economy, we intend to deliver growth by: Increasing the proportion of the workforce with higher level skills. Ensuring future skills supply is flexible and responsive to the growth sectors identified in the economic data. Increasing the proportion of high value employment sectors. Exploiting the potential of global and knowledge-based economies. Addressing the low skills deficit evident in the attainment of qualifications, in particular those without formal qualifications. Developing the entrepreneurial culture. Increasing overall employment levels and addressing economic inactivity. By working together we can inspire and stretch the capabilities and aspirations of young people, employees and those currently unemployed to attain high levels of education and skills that contribute to a capable, flexible and competent workforce able to add value to the economy. This presents a real opportunity for the region to develop collective responses to its skills and employment challenges, through embracing strong partnership working. Barry Liles Principal Coleg Sir Gâr Chairperson of RLP Strategy Group 1 Ceredigion for All; One Powys Plan and Swansea Bay City Region Economic Regeneration Strategy
1.0 Introduction and Background 1.1 Purpose The Department for Education and Skills (DfES) has adopted a strategic approach to the delivery of employment and skills support for both individuals and businesses, which will provide a basis for the utilisation of European Structural Funds (ESF) and other sources of external funding. In response to the Welsh Government s strategic approach to the employment and skills agenda, the RLPSW&CW is facilitating the development of a Regional Delivery Plan for Employment and Skills for south west & central Wales (the plan) that is aligned strategically with what is outlined in the National Policy Statement on Skills (published January 2014), subsequent Implementation Plan (published July 2014) and the latest version of the DfES Footprint for ESF delivery. The plan is also being developed to support the work of the Swansea Bay City Region and the Growing Mid Wales Partnership to enable the provision of skills and learning to meet the needs of the region s economic and labour market over the next ten years and beyond. In October 2014, the Deputy Minister for Skills and Technology, Julie James AM, formally announced the regional skills partnership structures that will develop and publish annual regional employment and skills plans, which will identify investment priorities as well as local demands and opportunities. The three regional skills partnerships are the: Regional Learning Partnership South West and Central Wales; Employment & Skills Workstream of the North Wales Economic Ambition Board; South East Wales Learning Skills and Innovation Partnership. The Skills Implementation Plan 2 (SIP) sets out four key roles for regional skills partnerships. These are as follows: To produce and analyse labour market information aligned to economic intelligence, which informs the skills requirements of the regions and future funding priorities linked to the coinvestment policy; To provide a mechanism to advise Welsh Government on future prioritisation of skills funding in line with employment and skills needs; To act as a strategic body effectively representing regional interests to develop a demandled and sustainable skills system, which is informed by strong industry engagement and recognises the level of skills utilisation in the region; To act collectively and strategically to maximise the impact of future available funds recognising the likely reduction of public funds over the coming years. 2 http://wales.gov.uk/topics/educationandskills/skillsandtraining/policy-statement-on-skills/skills-implementation-plan/?lang=en 1
1.2 Process Work on the plan commenced in November 2013 and to date has involved the following strands of work: SQW Ltd 3 was commissioned in December 2013 to undertake a desk-review of relevant data and evidence review. The purpose of the work was to provide a synthesis of economic, labour market and skills data in south west and central Wales (SW&CW). It drew upon a range of documents and data, including RLP materials, projections from Cambridge Econometrics Ltd (CE), broader strategic, policy and socio-economic information. Data was drawn on from the six counties that comprise SW&CW: Powys; Ceredigion; Pembrokeshire; Carmarthenshire; Swansea; and Neath Port Talbot. A series of consultation briefing events, which provided the opportunity for stakeholders from the private, public and third sectors to review headlines from the evidence base that reflected the region s economic performance and skills challenges and share their views on what interventions are needed to improve the region s economy. Capturing the employer s view is essential to ensure the plan reflects the needs of the region. Feedback was captured from employers during a range of regional events supplemented by the commissioning of Employer Voice research, which identifies regional skills demand drivers by drawing on existing data, research of skills development and discussions with business, industry groups, skills providers and Welsh Government. Details can be found in Appendix 1. A call for Expressions of Interest (EoIs) to gather a clear picture of all discussions and activity ideas being developed, which aim to address the region s skills needs and transform or add value to the way services are delivered. An initial review of the 140 EoIs received by the Advisory Group in June 2014, following which, Brokerage group meetings between similar proposed activities were held during August and September 2014. Further collaboration and development of ideas facilitated through Thematic group meetings were held during October - January 2015 from which regional activities are emerging. The development of four frameworks as strategic tools to addressing a particular theme or cohort of participants under which a number of national, regional and local projects will sit. Namely, these are: Regional Young People s Framework; Regional Adult Employability Framework; Regional Skills for Growth Framework; Regional Entrepreneurship Framework. 3 A Leading independent provider of research, analysis, and advice in economic and social development. 2
The establishment of a Strategic Employer Reference Group, represented by key employers will focus on skills priorities for the region providing the employers voice to drive the competitiveness and growth of business. 1.3 Structure Chapter Two provides details on the region s workforce and its economic priorities. Chapter Three outlines the plan s implementation. Chapter Four outlines the plan s Skills Performance Measures. 1.4 Priorities The evidence base (attached in Appendices 2-8), consultation briefing events and employer feedback provide insight into the opportunities and challenges facing employment and skills in the region, resulting in the development of our vision: To increase productivity and grow higher value jobs by addressing barriers, developing employability, skills and progression pathways. To achieve our vision, our focus is on: Increasing the proportion of the workforce with higher level skills; Ensuring future skills supply is flexible and responsive to the growth sectors identified in the economic data; Increasing the proportion of high value employment sectors; Exploiting the potential of global and knowledge-based economies; Addressing the low skills deficit evident in the attainment of qualifications, in particular those without formal qualifications; Developing the entrepreneurial culture; Increasing overall employment levels and addressing economic inactivity; To support our vision for employment and skills and drawing on the intelligence gathered, 10 priorities for the Regional Delivery Plan for Employment and Skills for south west and central Wales have been identified. The priorities are listed in a table later in this chapter, which is illustrated to show how they align to four frameworks and grouped under the headings of Building Skills in Education, Transition in to Work, and Raising Demand and Improving Skills, from where key intelligence is derived, as provided in the Appendices. The groupings are not intended to be mutually exclusive, (for example, work readiness would also be applicable within Building Skills in Education) and you will find evidence to support each of the priorities throughout the plan, including the background analysis and headlines. The priorities inform the Regional Employment & Skills Framework to determine the activities required to support the employment and skills challenges, thus avoiding duplication. 3
1.5 Delivering Change The plan will identify the region s skills needs, articulate the collective response and then identify the interventions to be supported by the appropriate investment e.g. domestic or structural funds. It is not an ESF funding plan it is wider than European Structural Funds. This will be supported by the development of a regional supply plan, by September 2015. The success of Regional Delivery plan will be determined by measurable improvements in performance. Skills Performance Measures will be developed using a range of indicators to drive the commitment to improving the overall skills base in Wales. Of course, the Regional Delivery Plan for Employment & Skills for South West and Central Wales will not be the only determinant of whether, and on what scale, performance improvements occur. A host of other factors will also play a part, not least the ongoing work of the region s skills providers, the introduction of new policy and funding initiatives, and the evolving economic climate. Therefore, the plan must be a live document that can remain relevant within this changing context, accelerating the pace of change and maximising opportunity. 4
1.6 Employment and Skills Priorities Table 5
2.0 Regional Economic Profile and Priorities 2.1 Introduction As regions rely increasingly on attracting investment from and competing in a rapidly changing global economy, it is imperative that our approach to growing the regional economy is designed to ensure the workforce in south west and central Wales is recognised as having the skills required to respond to and exploit all the opportunities offered by both domestic and global investment. Big companies that operate across the world have more choice than ever before when deciding where their needs are best met therefore, the effects of technological advances and global markets on the economy must be considered alongside the effects of an increasingly older and more mobile global workforce. In line with feedback from employers in the region, the IPPR (Institute of Public Policy Research), in a briefing paper entitled, Winning the Global Race, reports that the growth in professional occupations will be eclipsed by the number of vacancies created by the retirement of the so called generation X baby-boomer generation, which will exacerbate skills gaps and shortages in medium and low-skilled occupations. Over the past decade, the region has benefitted from significant investments in its infrastructure, ranging from the Harbour Way Project linking Port Talbot and the Docks to the M4, to the development of Cross Hands East Strategic Employment Site in Carmarthenshire; the Pwllperian Upland Research Platform, delivering part of the UK Government s Agricultural Technology Strategy at Aberystwyth University s Innovation Campus; Swansea University s flagship new Science and Innovation Campus on Fabian Way and the wider SA1 development. Other important capital projects across the region include investments in integrated health and care e.g. Cylch Caron project; a new facility for communities in Builth Wells and improved access to energy and employment sites; e.g. the Tidal Lagoon Power development in Swansea Bay and the Haven Waterway Enterprise Zone in Pembrokeshire. These developments are reshaping the region s geography considerably, and provide important new opportunities for our economy, businesses, and communities. Developing a regional workforce that is recognised for a high level of skill and flexibility will support the regional strategies to attract inward investment and address the skills gaps and shortages identified by local employers. To become competitive in a global market, the region must build upon the vibrant and diverse knowledge economy that is driven by the presence of four higher education institutions and five further education colleges. These provide strong links with industry and are significant in developing the economy through collaborative working, a focus on industry needs and research and development. A skills system that provides an infrastructure in the region for individuals and companies to be able to access information, support and guidance and find the appropriate course or provider for them is essential. Bite-sized and full-time provision up to and including doctoral level must be part of this offer and people should be able to move through and progress this skills and qualification framework as advocated in the Skills Implementation Plan 4. 4 http://wales.gov.uk/topics/educationandskills/skillsandtraining/policy-statement-on-skills/skills-implementationplan/?lang=en 6
The skills implementation plan focuses on providing an integrated and accessible employment and skills offer across Wales (Ministerial foreword). The shifting emphasis from a government-led approach to skills investment to one that is influenced and led and co-invested in by employers is one of the key changes that will influence skills delivery in the region. Government and employers will be taking collective responsibility for investment in skills and the regional providers of education, skills and training will be operating in this new climate, where priorities are identified by the employers who will be investing directly in skills provision. There will be three types of investment: Government-led - which focuses on areas of economic and social return to support jobs, growth and tackling poverty; Joint action - focuses on delivering flexible and responsive solutions to skills needs, where government resources add value to the investment being made by employers; Employer-led - this investment focuses on skills priorities relevant to their business operations and future skills needs and complementing the action taken by government. The development of access and progression routes into skills for growth is equally important if we are to rebalance the region s over reliance on lower value occupations, reduce unemployment, economic inactivity and reliance on public sector expenditure in the region, to align with the Welsh Government s anti-poverty strategies and UK government aspirations. Responding to the needs of employers in the region and being aware of national, European and global contexts and economic trends is important when planning regional provision. However, in times of fast and often unpredictable change it must be remembered that the identification of demand drivers is useful for relatively short-term planning but the indications are that we have to prepare a workforce for the unpredictable. Having intrinsic skills that are adaptable, flexible, reflexive and responsive is as important in addressing future trends as technical skills and knowledge. To ensure investment from the latest round of European Structural Funds is utilised effectively in the region, the Economic Prioritisation Framework 5 (EPF) provides guidance on the European investment priorities that will increase productivity, skills and employment, improve transport and digital connectivity, drive the knowledge economy, and develop distinctive places and competitive infrastructures. Whilst the EPF guides the use of EU funding within a broader investment context, regional employers have also identified the need for improved employability skills in work entrants and the need to develop the existing workforce in order to adapt to and thrive in times of change. These elements and needs have all been considered in the development of the plan, along with the Wales Infrastructure Investment Plan 6 (WIIP) Project Pipeline. This helps to inform strategic investment decisions in the region across the public sector by providing a clear picture of infrastructure investment in Wales and thereby, will inform private sector investment and regional skills provision and planning. 5 http://wefo.wales.gov.uk/applyingforfunding/funding2014-2020/epf/?lang=en 6 http://wales.gov.uk/docs/caecd/publications/141211-pipeline-en.pdf 7
The Welsh Government has recognised that investment in infrastructure often creates or exacerbates skills challenges and has responded by supporting industry-led investment in 9 key sectors 7 : Energy & Environment; Construction; Creative Industries; Advanced Materials & Manufacturing; Financial & Professional Services; Food & Farming; Information & Communications Technologies (ICT); Life Sciences and; Tourism. It has also identified three enabling themes: Entrepreneurship & Business Information; Property and; Innovation. This approach aligns with the UK Commission for Employment and Skills (UKCES) UK Employer Skills Survey 2013 8, which indicates that skills gaps and shortages are becoming more prevalent in certain sectors in the region as the economic recovery gains momentum, particularly within those sectors that rely on a highly skilled workforce. The skills needs of some of the expanding sectors identified in the strategies and emerging global demand have become increasingly apparent with the establishment of the Haven Waterways Enterprise Zone; the Teifi Valley Local Growth Zone in Ceredigion; the Powys Local Growth Zones aligned with the action plan for Llandrindod Wells and the Sirolli model of community-based economic development in and around Newtown and the Severn Valley and the Tidal Lagoon Power project in Swansea Bay. The transformation of a broad range of knowledge orientated activities, in technological, service and more traditional manufacturing sectors will support these and other major developments in the region. The needs of the priority, growth and emerging sectors which have particular significance for the region have been identified within the sector profiles in the Future Skills Challenges section of the chapter. They are intended to provide more detail to inform the development of an effective skills and capacity response required to support a regional workforce that is sufficient, flexible and responsive to the needs of employers in order to maximise future opportunities and to sustain a vibrant knowledge economy. The collaborative approach developed by regional working and partnerships in further and higher education institutions has been utilised to develop the four frameworks that inform the implementation of the plan. As a result, skills supply chains have been developed in response to all of the demand drivers referenced that are relevant to the region, so that growth is not inhibited by skills shortages and gaps. Productivity levels need to increase in the region and focusing on driving up skills levels will contribute to this. The provision of accessible, relevant and coherent progression pathways will allow the region s workforce to develop the knowledge and skills required for higher levels of employment resulting in improved employment prospects through a drawing up effect and the consolidation of strong leadership. Developing a regional workforce that is recognised by its flexibility and progression routes will support the regional strategies to attract inward investment and address the skills gaps and shortages identified by local employers, which in turn will drive the economy, increase GVA and improve the overall profile of the region. 7 http://wales.gov.uk/topics/businessandeconomy/sector/?lang=en 8 https://ukces.blog.gov.uk/2014/06/04/skills-shortage-vacancies-ukces-explains/ 8
2.2 Regional Economic Profile The region consists of six counties 9 with diverse economies, geographies and bi-lingual populations. Its impressive coastline and breathtaking scenery contribute to a vibrant visitor economy, supported by its historic market and border towns. The region boasts world renowned universities undertaking research and development across a number of sectors, which underpins the drive to transform the industrial heartland that was dependant on heavy industry into one that responds to new technologies and industries including Life Science, Renewable Energy and Advanced Manufacturing. Whilst the data included in the chapter reflects the region as a whole, it is important to recognise the inherent differences and barriers faced by predominantly rural counties in the region. As cited in Appendix 2, headline data illustrates clearly that despite its considerable assets, the region is underperforming economically. The Swansea Bay City Region Economic Regeneration Strategy, 2013 2030 10 and economic regeneration strategies for the Central Wales area (covering Ceredigion 11 and Powys 12 ), which will be driven by the Growing Mid Wales Partnership offer, a strategic framework in response to that data, to deliver effective support for major existing and new developments in the region. Whilst each of them respond to their specific needs, all three strategies recognise the need to increase productivity levels, drive up skills and employment levels, address connectivity issues, drive the knowledge economy and develop distinctive places and competitive infrastructures, if we are to drive the economy to improve the gap between regional GVA, which in 2011 was 75% of the UK average. Future growth cannot be achieved by an increase in skills alone. Improving connectivity across the region is essential to attract future investors and allow residents to access employment. Developments include: Investment worth 1bn plus in Great Western Mainline Electrification between London Paddington and Cardiff / Swansea to improve journey times, frequency and reliability (by 2018); 17.4m investment programme in station improvements across the region e.g. Port Talbot Parkway station re-development; 7m Swansea station redevelopment and quadrant bus terminal. Existing and planned connectivity into the TEN-T network, including Harbour Way and A477; International connectivity via ports at Swansea, Port Talbot, Fishguard and Milford Haven (which includes Pembroke Dock), designated as a core port by the European Commission under the Trans-European Transport Network (TEN-T). 9 Carmarthenshire; Ceredigion; Neath Port-Talbot; Pembrokeshire; Powys; Swansea 10 http://www.swanseabaycityregion.com/en/index.htm 11 www.ceredigion.gov.uk 12 http://www.powys.gov.uk/index.php?id=11912&l=0 9
2.3 Participation in Further & Higher Education Participation in post-16 education and training varies noticeably between counties, with Pembrokeshire having the highest participation levels (at 8%, excluding Higher Education), and Powys and Ceredigion the lowest levels at 5.6% and 6% respectively. Overall, four counties in the region had participation rates above the Welsh average in 2009/10; the exceptions being Powys and Ceredigion. 2.3.1 Number of Learners enrolled at FE institutions A/Y 12/13 16000 14000 12000 10000 8000 6000 4000 2000 0 7365 2085 7870 3915 9205 13990 Source: StatsWales 2.3.2 HESA Enrolments AY12/13 14000 12000 10000 9725 9840 11910 8000 6000 Postgraduate 4000 2000 2100 1775 2450 Undergraduate.. 0 University of Wales, Trinity Saint David Aberystwyth University Swansea University Source: StatsWales - data for the Open University in Wales has not been included in the above graph due to the all Wales nature of provision and the unique method of delivery. The OU in Wales has a total of 8,725 individuals enrolled to higher level courses with 8,325 enrolled at an undergraduate level and 400 enrolled at a postgraduate level 10
2.4 Patterns of Employment With a regional population of approximately 893,949 or approximately 29% of the Welsh total, population density varies considerably from 6.3 per hectare in Swansea to 0.3 in Powys. Despite investment over the past 25 years, the region has some of the most deprived communities in Europe and some of the most remote settlements in Wales. Therefore, innovative and cost effective solutions to address the potential brain drain from rural communities and barriers to employment in deprived and remote communities is a challenge for the region to consider, alongside improving connectivity and access to services. Improving basic skills and qualification levels in line with employer demand is also a challenge, with almost 25% of adults in the region having no qualifications or low levels of qualifications. 2.4.1 Unemployment Rates 14 12 Percentage 10 8 6 4 2 0 Unemployment Rate - Overall Unemployment Rate Male Unemployment Rate - Female Source: StatsWales, Annual Population Service/Labour Force Survey 2014 2.4.2 Employment by Public/Private Sector 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 37,100 11,500 7,600 20,600 11,400 32,800 20,200 45,700 32,800 73,200 11,800 34,700 Public Sector Private Sector Source: Business Register & Employment Survey (2013) 11
2.4.3 Public Sector A significant number of the regional workforce is employed within the public sector. Therefore, current and forecasted future reductions in the levels of public expenditure will have a significant negative effect on employment rates and place a greater need on organisations and individuals to develop flexible and transferrable skills. 2.4.4 Public Sector Employment Percentage 50 45 40 35 30 25 20 15 10 5 0 Percentage Employed in Public Sector - Overall Percentage Employed in Public Sector - Male Percentage Employed in Public Sector - Female Wales - Overall Wales - Male Wales - Female Source: StatsWales, Annual Population Service/Labour Force Survey 2014 2.4.5 Self Employment The levels of self employment within the region vary significantly with higher levels of self employment within the more rural counties, representative of some of the barriers faced by residents in rural communities who have little alternative when faced with a lack of local employment opportunities and insufficient public transport. As a result, many of them earn little more than minimum wage. That said, overall self-employment rates in the region are lower than UK averages, particularly in the urban areas. In Powys and Ceredigion, low unemployment rates are attributed to population migration as those unable to find employment or self-employment opportunities move out of the counties through necessity. Thus skills gaps identified in the sector profiles could be influential in the development of specific self-employment opportunities linked to the Regional Entrepreneurship framework and in communicating the same to business support organisations. 12
Number of People 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 30 25 20 15 10 5 0 Percentage Source: StatsWales, Annual Population Service/Labour Force Survey 2014 2.4.6 Occupations and Earnings Employees Self-Employed Self-Employment Rate The region s occupation profile consists of a large percentage of the workforce in lower value occupations. Professional occupations may represent the greatest share of employment across the region (15.4-19.3%); however they are still less significant than Wales and UK levels. Skilled trade occupations are also more significant in the region. There are a significant number of part time employed individuals within the region with most of the counties in the region having a higher number of part time employed individuals than the Wales average of 27.9% and all higher than the UK average of 26.8%. Number of People 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 40 35 30 25 20 15 10 5 0 Percentage Full Time Part-time Employment Part-time Employment Rate Source: StatsWales, Annual Population Service/Labour Force Survey 2014 13
2.4.7 Occupational profile, 2013 (excluding people who did not specify an occupation) Source: Annual Population Survey, Year ending June 2013 from Stats Wales The profile of the occupations varies significantly across the region with a large percentage of the workforce in lower value occupations. Professional occupations may represent the greatest share of employment across the region (15.4-19.3%); however they are still less significant than Wales and UK levels. Skilled trade occupations are also more significant in the region. 2.4.8 Earnings Earnings data cited in Appendix 2 reveal that earnings in Swansea are comfortably higher than in other areas, at 12.01 per hour (gross) for full-time equivalent (FTE) workers, when based on place of residence. Powys has the lowest level of earnings, at 10.06. Earnings in Neath Port Talbot are relatively high at 11.26 per hour (gross) for FTE workers, and rise further when based on place of work rather than place of residence. Indeed, a comparison between work-based and residence-based earnings data show that quite a large number of employees travel from Swansea to Neath Port Talbot, and possibly other areas for work. At the national level, a comparison between residence based and place based earnings also highlights that a large number of employees from the region cross to the south west of England to work 13. 13 Swansea University s Skills in South West and Mid Wales report. 2013. Original source: Annual Survey of Hours & Earnings, ONS 14
2.4.9 Travel to Work Patterns An analysis of commuting patterns shows that the region is mostly self-contained and that commuting flows in nearly equal those out (see 2.3.10 below). The majority of economically active residents (80%) work in the county they live in. Around 30,000 of the region s residents work outside the region, with statistics indicating that nearly a third of that total commute out from Powys, probably to towns along the English border. A slightly lower proportion of workers commute in from elsewhere (28,000) and around 12% of SW&CW residents commute to another of the region s counties for work. Travel to work patterns, economically active, 2011 Source: Annual Population Survey (rounded figures) 2.5 Global Trends to 2030 Economic change within the region will be driven by global trends that will change the way that individuals work and participate in the economy. These changes range from technological advancements to societal changes and a change in the population structure. These drivers of change will be in the large part global and will influence the region both directly and indirectly, it is important to understand these changes to identify the opportunities that they will provide and to maximise the potential of the regions enterprises and people. 15
For the region to succeed as a 21 st century knowledge economy there is a need to look beyond future proofing the present to preparing for and embracing the future. Economy and Business Globalisation Change in Employment Patterns New Business Models Automation of Knowledge work Technology and Innovation Digitalisation Nanotechnology ICT Developments including Big Data Cloud Technology Region Environment and Resources Climate Change Resource scarcity Advanced Materials Society Changing Work Environments Demographic Changes, Aging Population Economic Migration Digital and Social Networks 2.5.1 Demographic and Societal Changes Population changes will have a significant impact upon the regional workforce and the economic activity of the region. Overall global populations are rapidly expanding with the population doubling to over 7 billion within 50 years and a further 2 billion will be added to the population in the next 40 years 14. Population growth has in recent times has been led by emerging nations, however, the effects of migration may have an impact upon the population growth within the region. The ongoing trend of Western Aging will have a significant impact upon the demographics of the population and therefore its workforce. Those aged 65 and over will become a much larger share, rising from 17 percent to 30 percent of the population. Those aged 80 and over will rise from 5 percent to 12 percent and will become almost as numerous as the young population in 2060. The increasingly aging population and extended retirement age will have a profound impact upon the workforce structure with intergenerational working becoming increasingly evident and a workforce spanning 3 generations will be increasingly likely. The average age of the UK s labour 14 The Future Steria 16
force will increase over the coming decade, today s largest age band of workers is set to shift from 44-46 to 54-56 by 2020. 15 There will be an increasing demand on employer s ability to maximise the knowledge and experiences of its older workforce whilst providing opportunities for the younger age groups. In addition, medical developments have meant that people are living with a greater number of chronic conditions which can affect their ability to participate in the workforce. However, technological advancements and further developments may also enable more individuals with chronic conditions to participate in the workforce. 2.5.2 All Age Trends 300,000 250,000 Number of People 200,000 150,000 100,000 Powys Ceredigion Pembrokeshire Carmarthenshire Swansea Neath Port Talbot 50,000 2015 2020 2030 Source: StatsWales, 2011 based Local Authority population projections for Wales 2011-2036 2.5.3 Age 16-64 Trends Number of People 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2015 2020 2030 Powys 16-64 Ceredigion 16-64 Pembrokeshire 16-64 Carmarthenshire 16-64 Swansea 16-64 Neath Port Talbot 16-64 Source: StatsWales, 2011 based Local Authority population projections for Wales 2011-2036 15 UKCES Future of Work 2030 17
2.5.4 Age 65+ Trends 60,000 Number of People 50,000 40,000 30,000 20,000 10,000 Powys 65+ Ceredigion 65+ Pembrokeshire 65+ Carmarthenshire 65+ Swansea 65+ Neath Port Talbot 65+ 0 2015 2020 2030 Source: StatsWales, 2011 based Local Authority population projections for Wales 2011-2036 2.5.5 Technological Changes Technological advances have had the greatest impact upon economies and employment with the development of the digital age. The continued advancements in both fixed and mobile communications has facilitated a significant increase in global trade. Companies, entrepreneurs and individuals have more opportunities to participate. Governments and multinational companies were once the only actors involved in cross-border exchanges, but today digital technologies enable even the smallest company or individual entrepreneur to be a micronational that sells and sources products, services and ideas across borders. 16 The UK Government Office for Science predicts that the Internet is set to enter a second transformative phase, with a web of data adding structure, meaning and re-usability to online data and documents. 17 This also supports the trends towards the usage of Big Data for analytics as well as cloud computing on a commercial scale. The potential for 3D printing and other advanced manufacturing technologies could significantly alter the way that products are manufactured globally. This could cause a shift from a just in time logistics approach to a location based just in time manufacturing approach. As with the majority of the priority sectors in the region, research and development within Higher Education is driving the development of technology that has the potential to capture investment from across the globe. 2.5.6 Employment Patterns The roles undertaken by the workforce will change dramatically in the future with a significant increase in the need for creativity. A study conducted in 2011 by IBM identified creativity as the 16 Global Flows in the Digital Age - MGI 17 Technology and Innovation Futures: UK Growth Opportunities for the 2020s UK Government Office for Science 18
most important leadership competency for the successful enterprise of the future. 18 It is anticipated that non routine activities which cannot be automated, such as innovation, leadership and sales, will dominate employment, and that by 2015, 40% or more of an organisation s work will be nonroutine up from 25% in 2010. 19 The ability to attract and retain talent is foremost for many business leaders 97 percent of CEOs in a PWC global survey said that having the right talent is the most critical factor for business growth. 20 This demand has the potential to create an hour glass workforce structure with a highly skilled, highly waged and mobile workforce at the top and a lower waged, lower skilled base with little centre ground. The global demand for the knowledge economy will pose significant challenges for the development and protection of Intellectual Property (IP). The UK Government Office for Science highlighted that the UK is in a strong position to exploit the development of the knowledge economy As a world leader in the production of many kinds of knowledge, from scientific research to business models and industrial processes, the UK is well positioned to benefit from the rise in status of the knowledge asset. 21 Further technological advancements including the availability of superfast fibre connections will facilitate a greater level of remote working. This will be beneficial for employees as they will be able to have greater control of their work life balance. 2.5.7 Climate Change and Sustainability Climate change and sustainability will present a number of opportunities and challenges for the region. The effects of climate change on global scale may increase the demands on food supplies. A demand for low carbon energy sources for the region will provide a number of opportunities as the region is well suited geographically, particularly with respect to the location of renewable energy technologies. As these technologies develop there will likely be a downscaling of cost which in turn could provide further opportunities for the utilisation of technologies. Further developments in Smart materials and battery storage have the potential to significantly improve the effectiveness of renewable energy sources. 2.5.8 Global Urbanisation Globally the world s large and mega cities are the primary drivers of economic growth and the majority of future growth is forecast to occur in the city region areas. 20 of the world s largest 50 cities will be in Asia by 2025, up from only 8 in 2007. In 2010 the urbanisation of the world reached 50 percent and it is expected that by 2030, 6 out of 10 will be city dwellers. By 2050 it is forecast that 70 percent, of the then nine billion people, will live in cities. 22 18 The Future Steria 19 The Future Steria 20 The Future Steria 21 Technology and Innovation Futures: UK Growth Opportunities for the 2020s UK Government Office for Science 22 The Future Steria 19
Evidence of a trend towards urbanisation, particularly amongst the younger population is visible in the projections. This urbanisation has the potential to create a two tier economy between rural and urban areas within the region. Economic migration of skilled labour is not an isolated issue for the region; it is reflected in the wider EU which suffers a net loss of graduates to the rest of the world. It loses some of its brightest to the US and the return rates are actually falling. 2.5.9 Summary Tables of Disruptive Technologies Source: MGI Disruptive technologies: advances that will transform life, business, & the global economy (2013) Source: MGI Disruptive technologies: advances that will transform life, business, & the global economy (2013) 20
Source: MGI Disruptive technologies: advances that will transform life, business, & the global economy (2013) Technological changes and innovations, the use of Big Data and global economic trends will impact on developments in the region. Universities, business and government working together can ensure that, through the development of high level skills and professional skills pathways, the region can maximize opportunities as the UK and Welsh economies emerge from recession. Long-term challenges such as globalisation, pressure on natural resources and an ageing population are intensifying. If we are to adapt to this changing reality, Europe can no longer rely on business as usual. 23 (p4) Europe 2020 24 is the EU's Growth Strategy for the coming decade; it states that economies should be smart, sustainable and inclusive. This means focusing on knowledge and innovation, efficiency, competitiveness, ecological awareness and responsibility along with social cohesion that considers citizens well-being. 2.6 Industry and Educational Institutional Links New partnerships between Higher & Further Education and industry will ensure a focus on industry needs and research and development to support growth. Within the region this includes the CUSP (College University Skills Partnership), a collaboration between Swansea University, Gower College Swansea, Neath Port Talbot College Group and Pembrokeshire College and the Dual Sector University (University of Wales Trinity St David, Coleg Sir Gar and Coleg Ceredigion). Other institutions in the region are Aberystwyth University and the Open University in Wales. Appendix 9 lists all proposed strategic development for the Higher Education sector in the region. The skills needs of Regionally Important Companies (RICs) 25 and Regional Anchor Companies(RACs) 26 listed in Appendix 10 and referenced in the sector profiles along with those of local employers has contributed to the plan s evidence. Half of the regionally important companies in Wales are food businesses, 80% of which have less than 10 employees, nevertheless they provide much needed employment in rural areas and are therefore essential to the economies and 23 http://ec.europa.eu/europe2020/pdf/europe_2020_explained.pdf 24 http://ec.europa.eu/europe2020/index_en.htm 25 http://wales.gov.uk/topics/businessandeconomy/sector/regionalcomp/?lang=en 26 http://wales.gov.uk/topics/businessandeconomy/sector/anchor/?lang=en 21
sustainability of rural communities. Many of the RICs and RACs have developed relationships with the region s Further and Higher Education institutions that support their on-going R&D projects. An important theme captured from employer input into the plan indicates that those SMEs with under 20 employees, (which comprise over 90% of the employers in region) 2728, value intrapreneurial skills in their workforce as much, if not more than, the region s RICs and RACs. Whilst engaging locally and regionally, thinking globally is vital when planning the delivery of skills for economic growth. Local employers are often global enterprises, whether they are large corporations or micro businesses. Connectivity, a skills system and coherent, accessible business support are essential for economic growth. This plan is an iterative process which will increasingly align with and respond to employer input sourced from the Wales Employment and Skills Board, the RLP s Strategic Employer Reference Group consisting of representatives of RICs and RACs and the region s SMEs. 2.7 Policy Responses In response to the economic demand drivers, national and regional policies and strategies have been developed to meet the skills needs, in line with the requirements of the region s economy, employers and demographics. There is a great deal of intelligence available to enable an analysis of the region s skills need in line with the major developments, growth sectors and demand drivers. Skills for growth must be aligned with the economic priorities and also consideration of social and environmental factors that will influence sustained growth. The Well-being of Future Generations Bill will set ambitious, longterm goals to reflect the Wales we want to see, both now and in the future. 29 Support for demand-led skills activity arising from economic opportunities will primarily be met through mainstream and national provision in the short to medium term. National programmes will form the strategic core for economic regeneration and skills development and around this there will be a range of regional activities that will focus on business development, the knowledge economy and physical infrastructure. This reflects the need for a diverse range of skills. Specific technical skills and knowledge as well as more generic skills and competencies are required. These range from high level management skills for CEO s and senior managers to team working, presentation skills and communication skills, business processes and process management. Digital literacy is vital across all sectors and industries and needs to be embedded in education and training. Over the longer term, each version of the plan will identify and influence the response to opportunities to exploit global demand drivers and trends for the benefit of the region. Growth and sustainable jobs is one of the key aims in the Welsh Government s Programme for Government 30, which is the overarching programme used to inform and monitor all of its policies. The Skills Implementation Plan and the subsequent Regional Delivery Plans for Employment and 27 http://rlp.infobasecymru.net/ias/themes/economy/businesses/tabular?viewid=840&geoid=1&subsetid=42 28 http://rlp.infobasecymru.net/ias/themes/economy/businesses/tabular?viewid=595&geoid=1&subsetid=42 29 http://wales.gov.uk/topics/people-and-communities/people/future-generations-bill/?lang=en 30 http://gov.wales/about/programmeforgov/?lang=en 22
Skills are the mechanisms by which economic growth and sustainable jobs will be supported and monitored. Feeding into these plans are the key findings from the Welsh Government survey of Welsh Language Skills Needs in Eight Sectors 31 to identify the current and future Welsh language needs of employers and the potential of the language to impact on business performance. The research indicates that just over a third of employers in the eight sectors regarded having staff with Welsh language skills at their establishment as very (18%) or fairly important (17%), (higher among employers in Childcare, Agrifood, Hospitality and Social Care). With almost 24% of the population able to speak Welsh, the older and younger workforce in the region is well placed to capitalise on these needs, which also form an integral part of the design of the Regional frameworks, where appropriate. European Social Funding (ESF) can provide opportunities to add value to mainstream and national provision to meet varying regional and local needs; however it should be considered within the wider context of delivery provided by domestic funding, the overall employment and economic context and a diminishing public sector. Strategic developments in compulsory provision are being driven by Welsh Government policy, including their Youth Engagement and Progression framework. The Economic Prioritisation Framework (EPF) Investment for Jobs and Growth is a guidance document that outlines the priorities for the investment of European funds up to 2020 and contributed to the development of the Welsh Government Policy Statement for Skills 32, which is in turn supported by the Skills Implementation Plan for post-19 employment and skills in Wales 33. Actions over the next few years are considered within a 10 year context and the ambition is to develop a skills system in Wales that supports future competitiveness, helps us evolve into a highly skilled society and tackle poverty. The Welsh Government states its primary focus as raising productivity, reducing barriers into work and supporting people into sustainable employment. 34 There are many other development opportunities, including those for micro and SMEs. Key areas of opportunity will be targeted for investment under the EPF. These are sectors and businesses that are growing or have growth potential. However, investment is needed in employability skills at all levels so that the region is able to respond swiftly to skills gaps and emerging opportunities. The Welsh Government recognises that skills have a major impact on economic and social wellbeing and provide a strong lever for tackling poverty and strengthening the creation of jobs and growth. Developments need to create and support the right conditions for employers in Wales to grow and flourish and therefore the ambition must be to develop a skills system that supports competitiveness and is sustainable against the backdrop of ever scarcer resources. Appendices 11a & b outline regional developments and investments, which are either current or future. At one time literacy was considered to be the ability to read and write, and perhaps do mathematics. It can now be understood as having the skills and knowledge to read and interpret 31 http://wales.gov.uk/statistics-and-research/welsh-language-skills-needs-eight-sectors/?lang=en 32 http://wales.gov.uk/docs/dcells/publications/140129-policy-statement-on-skills-en.pdf 33 http://wales.gov.uk/docs/dcells/publications/140714-skills-implementation-plan-en.pdf 34 http://wales.gov.uk/docs/dcells/publications/140714-skills-implementation-plan-en.pdf 23