Industry 4.0 is reshaping Western economies. Recent research by the management consultancy McKinsey finds that almost half of the jobs performed by humans today will be disrupted by automation by 2030. Governments and industry must ramp up their efforts to educate, retrain, and recruit talent.
For many in Europe, skill deficits are nothing new. In the UK, the construction sector has been blighted by shortfalls in qualified labour for some time. While recent surveys by the likes of Deloitte, EY and Mercer, have begun to reveal wider sectoral pressures, with as many 8 in 10 business leaders citing recruitment troubles for skilled vacancies in the past twelve months. Many more express concern about future competition and costs, from re-training and headhunting.
For businesses based in the UK, Brexit compounds the the long-term dilemmas of an ageing workforce and shortage of qualified labour. The uncertainty born from 2016 referendum gave rise to a net negative migration rate from the EU affects industries like academia and science — where FOI requests have revealed staffing shortfalls of up to 30 per cent.
Investors are reticent as many businesses are unwilling to risk funding outreach or retaining programmes in an uncertain climate.
Ultimately, something will have to give to stir Britain from this paralytic condition. It has a reputation to uphold as a global beacon for talent and innovation. In order to thrive, and build beyond Brexit, it will need to have an outward-looking set of policies to match.
Reassuringly, there have been some good signs recently. The departure of Theresa May as prime minister has given way to a new energy — one that celebrates Britain as a global base for business. Number 10 has shifted toward an immigration policy that celebrates internationalism, and that looks comparable to the “progressive” immigration spirit of countries such as Canada, Australia, and New Zealand.
The UK is blessed with great industry and culture and does not share in the difficulties of its European neighbours, which are plagued by emigration and economic underperformance. It is unshackled and can be a leader in the race for talent; it should not compromise this or erect barriers to entry.
To do so would set it on a different and altogether more challenging path. A path that we, in the Basque Country, know well and have been pursuing for over a decade.
For, like many in southern Europe, we suffered an exodus of skilled labour from our domestic workforce after the global financial crisis – with about 5% of Basque graduates relocating to France, Germany and the UK between 2008 and 2014. Against a backdrop of an already ageing population, this pressure hit us hard. It forced our government and business community to come to together to attract young people and skilled hires.
Collectively, they made a joint commitment to education – a move that now yields our region the highest proportion of science and engineering students in Europe. They also established public-private programmes, such as Bizkaia Talent and the ‘Be Basque Network’ for identifying, mapping, and headhunting global talent for businesses.
The government of Biscay, in Bilbao, also harnessed the unique autonomy it holds to offer professionals relocating to the Basque Country an income rebate of up to 35%, and developed a range of support networks to help those considering moving with the logistics of relocating – from renting a house to finding the right school for their children.
This collaborative action has given new life to our region as a base for enterprise – some of these efforts could be replicated, to strengthen the position and appeal of the UK.
For there is now, with a new government, an opportunity for greater engagement and discussion on labour supply across public and private spheres. There’s also a space to better market the UK’s status as an inclusive and world-leading destination for business and innovation, in order to attract the brightest and best to its shores.
There will, of course, need to be political will to achieve this. But so far the rhetoric from the Johnson administration has been good. There has been talk of inclusivity and the need to retrain, upskill, and future-proof the UK labour force.
It is language that will comfort UK industry, and that will give investors and prospective global hires a clear message: that Britain is still “open for business”.
“Deal” or “No Deal”, Britain has an opportunity to lead, and to reap the benefits of a highly-skilled and inclusive economy.
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