Digital and skills are crucial for resilience and recovery
Over three months has passed since Covid 19 caused the UK to enter full lockdown on March 23rd. How quickly or slowly this time has passed varies greatly from one person to the next, according to the combination and scale of challenges faced in our work and home life.
Last October the Industrial Strategy Council published a paper on the scale and combination of skills challenges facing the UK. As a member of that Council, I recognise that we now face a changed landscape. Attention is focused on how we tackle the significant challenges ahead, while seizing the opportunity to reset and work together to deliver a green, inclusive, economic recovery. But to ensure this future improves prosperity for all, we must not forget the skills agenda.
Our report highlighted a number of challenges affecting the ability of people in the UK to adapt their skills to those needed in the workplace, and many of these remain. Management, critical thinking, and digital skills were all predicted to experience severe shortages without urgent action. The combination, scale, and urgency of these challenges have likely increased as a result of Covid 19. And yet, businesses and individuals have had to adapt rapidly and learn new skills, particularly digital, in order to interact, work, and learn. I have been constantly amazed by the resilience and ingenuity that so many businesses are showing. There have been some incredible examples of businesses pivoting to online - across all sizes and sectors. London chain Pizza Pilgrims launched a frying pan pizza kit via Deliveroo, and took to Instagram TV to teach people to become pizza chefs in their own kitchens. This has proved a huge success with customers and shown the scope for creative new revenue streams to continue post-lockdown. Similarly we have seen how as gyms closed, fitness instructors have moved their businesses online. And the work UK supermarkets have done to make online ordering easier and better has benefited us all.
For workers, mastering the 3Rs of reading, writing and arithmetic is essential, but not sufficient if the UK is to remain competitive. In addition to rising trends such as automation and artificial intelligence, the skills system will need to adapt to 3 ‘Ds’ – decentralisation, decarbonisation and digitisation. This was recently noted in the Energy and Utilities Workforce Renewal and Skills Strategy which calls for policy makers, regulators, unions, and supply chain partners to unite, to ensure workforce resilience to meet the fast changing challenges of the future. In calling for collaborative partnerships across the UK, a stable policy environment, and continuing dialogue and evaluation of policy and practice with employers, the above strategy echoes the findings of the IS Council’s June 2020 paper, Rising to the UK's Skills Challenges.
The digital skills challenge is particularly acute. There are initiatives in train to encourage young people to develop higher level and more specialist digital skills, such as the Skills Toolkit which provides free online digital and numeracy courses for all. But employers report that one third of skill shortage vacancies can be attributed, at least in part, to a lack of digital skills. This includes both basic computer literacy and more specialist IT skills. Specialist digital skills are likely to experience rapid changes in demand as technology evolves.
Businesses can improve their productivity and operational efficiency by focusing on long-term digital strategies and integrating new technologies into their core business activities. The government’s Business Productivity Review found that businesses of all sizes that embrace the best leadership and management models, and adopt tried-and-tested technologies, are more profitable, productive, and better to work for. Our fellow Industrial Strategy Council member, Sir Charlie Mayfield, welcomed “the Review’s focus on firm-level change especially in developing leadership and technology adoption.”
Occupations will increasingly require a combination of social and emotional skills, analytical and interpretative skills, and digital skills. Furloughed and unemployed workers who possess these skills will be better equipped to return to the workforce, and better placed to adapt to future skill demands. Covid 19 and the transition to a low carbon economy will produce winners and losers across sectors and regions. The response will need to be targeted accordingly. The IPPR Environmental Justice Commission call for targeted investments that stimulate demand for skills and decent work in high-demand low-carbon products, services and new industries. In hardest hit sectors, the repurposing of fixed capital and retraining of workers will enable workers to move on to green projects.
Over the last few months we have seen so many small businesses having to pivot and change in light of the current climate. With focus and determination, there is no reason why more companies cannot do the same.