Bridge the Skills Gap Constructing a Strategy Christian Warden Director - Engineering Skills Apologies from Christian Warden Purpose – Inform and Engage about the Skills Issues within the UK and Leeds.

Skills, who needs them?.......... ………………..We all do! Competition is creeping up on us fast, If we live on our past success, then we will not be able to celebrate success in the future. Brazil, Russia, India and China (The BRIC Countries) are going to be a force to be reckoned with, the 19th and first part of the 20th Century was all about British Manufacturing, the second half of the 20th Century was about the USA and the 21st Century is fast becoming an India/China Century. India and China are creating good quality Engineers, and lots and lots of them, this will have an impact. Competing isn’t compulsory, neither is success. We need to develop people ensuring they have the skills and capability to be competitive.

Global Competition Competitive Capability is essential – Are we ready to compete? Fact: Britain produced 12,000 engineering graduates last year India produced 1.2m engineering graduates last year BRIC economies may overtake the G7 economies by 2027 BRIC countries account for over a quarter of the world's land area India and China are more than 40% of the world's population alone Competition is creeping up on us fast, If we live on our past success, then we will not be able to celebrate success in the future. Brazil, Russia, India and China (The BRIC Countries) are going to be a force to be reckoned with, the 19th and first part of the 20th Century was all about British Manufacturing, the second half of the 20th Century was about the USA and the 21st Century is fast becoming an India/China Century. India and China are creating good quality Engineers, and lots and lots of them, this will have an impact. Competing isn’t compulsory, neither is success. We need to develop people ensuring they have the skills and capability to be competitive.

The Skills Issue is Here…. Now The Skills Issue is Here…. Now! Competitive Capability is essential – Are we ready to compete? We need 96,300 Engineers, Scientists and Technologists…. …. just to replace retirements to 2016! (Source: IER) Apprenticeships Higher Apprenticeships Undergraduates Graduates Career Advancement Existing Employees We are constantly being told that there is a skills issue on the horizon, let’s be very clear, the skills issue is here now and we need to address it now. Whilst we need to look at replacing those who are retiring or leaving the industry, we also need to develop those skills that will be needed to take us into the future. This means looking at the whole workforce and all routes, no one route will suffice. We need to look as skills development and all routes as working together towards a common goal; this means both the academic and vocational routes and both being seen as comparable and equally beneficial to UK Manufacturing. This means: Apprentices Graduates Existing employees Leveraging value from Diversity & Equality, we need more female engineers. If you think training your workforce is expensive, try ignoring it and then see how expensive THAT is!

Current training not in the right technologies? Articulating Demand Demand for Skills Emerging technology, more sectors, more demand, more people? ‘Unknown’ Challenge Existing under- recruitment Shortfall and demographics – current technology 96,300 ‘Known’ Challenge Current workforce Current training not in the right technologies? Little or no growth of number of skilled people Poor presence in core engineering education Vocational delivery and funding systems in process of significant change Limited adult re-training and up-skilling opportunities and funding Today + yrs? Forecast: + 3 yrs? Employers to quantify:

UK Engineering Employer Base Employers Employees Company Size 76,480 1,394,491 250+ 66% 6% 5 - 249 33% 28% 6% < 5 61% SME Focus < 250 The majority of engineering companies are SME’s, yet the largest amount of engineering employees are in OEM’s and large companies. We need to work with all engineering employers, working with OEM’s, their tiers 1 and 2 and working through the supply chain, recognising the diverse nature of operations the further down the supply chain you go. We need to increase our support for SME’s/supply chain companies as these need to have information, advice and guidance that will lead to growth and competitive capability. £74 billion per annum (10% total of UK GDP) One third of total UK exports

Investment in Skills = Genuine Bottom Line Benefit EEF Engineering Skills STEM School UTC Apps FE HE / P-Grad CPD / Upskill Success Plan Skills Retention Help EEF members/prospective members navigate their way through the skills system. Information, advice and guidance focused on business impact. Comprehensive network of contacts, forums and support. Identify new and emerging skills opportunities and support genuine action. Shape Government policy and funding to meet employer needs. Access to funding and support. People Skills Productivity Business Improvement Competitiveness Local / Global Profitability Bottom Line Measure Investment in Skills = Genuine Bottom Line Benefit The skills arena is increasingly confusing for employers, they don’t know what is available, they don’t know where to go once they know. There is a perception, many times well founded, that the skills support agenda is full of bureaucracy, difficult to use and not actually supporting their real issues, we need to support employers in understanding this. Therefore, EEF are going to increasingly work with our employers to navigate their way through the skills system. We are pacing ourselves strongly within the skills arena and are going to work with stakeholders, including LEP’s to give the best possible information, advice and guidance. We will work with these partners to access funding and support where possible with the strong advice that skills investment can give a return on investment. To increase the bottom line of an engineering business, you have to increase your competiveness, to increase competiveness, you have to look at improving productivity, to improve productivity, people need to work differently, this means changing the way they work, this has to be skills development. Skills, therefore, links directly to bottom line improvement.

Funding Streams Navigating the Skills Minefield 794 Government funded schemes are currently available: 655 of these are available for manufacturing/ 52 are England only Skills Funding Agency (SFA) / National Apprenticeship Service (NAS) Manufacturing Advisory Service (MAS) / Growth Accelerator (GA) ………… Business Growth Service (April 2015) Local/Regional through European Social Fund (ESF) Employer Ownership Industrial Partnerships National Colleges The engineering skills agenda needs to be supported by the numerous government initiatives, nationally, regionally and locally, ensuring employers gain the support and impact that is desired at the outset of these programmes. EEF is best placed to work with these organisations to do that and would welcome ensuring there is a joined up collaborative strategy going forward.

National College Initiative EEF has been chosen by BIS in partnership with the High Value Manufacturing Catapult to lead and deliver the National College for Advanced Manufacturing. NCAM Launched by Vince Cable, 11th December, 2014. £160 million total investment. 50% match funding by employers expected. National Presence, ‘hub and spoke’ model with international recognition. Strong links to compulsory and further education. Strong employer leadership and participation, including placement activity. Long term strategic focus on delivering highest quality vocational training. NCAM will become a systematic, integrated and financially sustainable response to manufacturing employers’ skills needs (Work through slide) EEF see this as a huge positive step in ensuring employers in the engineering and manufacturing sector get the support and training delivery that they want with the qualifications and programmes leading to real business impact. EEF are working directly with BIS and the High Value Manufacturing Catapult to lead this initiative and this will be rolled out nationally over the next few weeks and months. We intend to strongly collaborate with the LEP’s in order that our two strategies align completely and make a real difference.

‘Technology’, ‘training’ and ‘skills’ Linking the Language High Value Skills TRAINING & Application High Value Capability High Value Jobs DELIVER INFLUENCE FUTURE Industry Success Competitive Growing Individual Success Inspired Qualified SPECIALIST KNOWLEDGE GENERIC UNDERSTANDING TECHNOLOGY - Development PEOPLE - Education Knowledge Transfer To deliver the right people with the right skills at the right time to meet employer demand

NCAM cross sector impact Generic Sector Specific Aerospace Automotive Nuclear Others SECTOR RELATED TRAINING, Non-Manufacturing, e.g. Systems Systems and Design Operations and Systems Site and Operations Operations, Systems and Infrastructure Rail SECTOR STRATEGY SKILLS DEMAND: Standards & Forecasts NCAM DELIVERY FOR ADVANCED MANUFACTURING EMPLOYERS AND INDIVIDUALS Operations and Infrastructure Process * proportions for illustration only

Skills …….. are they a Cost or an Investment?

Questions Any Questions