29 April 2022

In tech, higher salaries aren’t just about higher education

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Primary school children will join a jobs market unimaginable to many of us today, with 65% of them predicted to have careers that do not yet exist. For those children, technology won’t be a sector of the economy, it will just be ‘the economy’. Yet while our economy looks forward, when it comes to tech skills, Britain’s universities still lag behind when it comes to tech education.

This is fundamentally a problem of structure. Our university system remains based on a model set by Oxford, Cambridge and St Andrews nearly a millennium ago. Traditionally, university courses adapt slowly: the principle and structure of a three-year degree is fundamentally the same as it was 20 years ago. These days a computer science degree curriculum may be out of date by the end of three years, even if it had been up to date at the beginning: historically, computer science has had lower than average employment rates.

Talk to startups and you will find out why. Tech skills move fast. Academic salaries mean that the most talented teachers can often simply earn more doing it for themselves than helping others learn. This means the Government subsidising university courses that are quickly outdated, leading to startups having to waste time and resources training up graduates in the newest coding languages, as well as the usual work-ready skills that all grads need.

As much as this is a pain for companies, it’s even rougher for students. Recently announced proposed changes to student loans risk leaving graduates with over £101,000 in debt – an eye-watering price tag that in the case of tech is often particularly bad value for money. When only a minority of the population had a degree, the badge alone provided the endorsement you needed whether the course was perfect or not. Now a degree isn’t enough to set you apart, but lumbers you with debt for the rest of your working life anyway.

But there are other ways to fix both the quality of education and the cost.

One is apprenticeships. Companies like Multiverse are offering a great alternative to university that combines in person tech training with work experience. These new providers can work with tech employers to shape education, as well as building the kind of community that young people might get from university too.

Another is coding bootcamps. They have shown themselves to be more agile and responsive to what industry needs than traditional academic institutions. They are able to put flexibility first in a way that most universities – again, with some notable exceptions – have not been able to, offering everything from intensives to part-time courses. They can also link more directly with employers to plug industry gaps. The Government is making progress on this by providing ‘skills bootcamps’, whereby private providers and universities offer intensive short courses, often online, in a specific skill.

But as we at Coadec explored in our paper, ‘Finding a NEET Solution’, there’s more to do. Most courses are still run by the private sector without a government funding option. They are great courses, but they don’t come cheap, meaning they are not yet widely seen as part of the suite of options available for school-leavers – and, critically, they are not eligible for student loans, so arranging financing is tricky.

But even student loans themselves suffer from the same lack of adaptability as university degrees. Similar to university degrees, they were proposed as a policy without thought given to future employability.

An alternative option is Future Earnings Agreements (FEAs) – loans which students repay once they earn above a certain amount, opening up new opportunities for those wishing to upskill or enter the workforce for the first time. This makes these courses accessible even if you can’t pay the fees upfront: with a corresponding impact on diversity of our talent base. But, crucially, unlike our current system of government-backed student loans, companies offering FEAs are liable for the cash if their students cannot repay. So FEA-backed courses are heavily incentivised to identify and offer skills that industry needs. Frequently, they offer FEAs for courses at coding bootcamps.

In the 1960s, the Open University set a prime example of how the UK can champion higher education reform by going back to the drawing board and creating an innovative solution. Its introduction of long-distance learning revolutionised access to skills, and it’s still one of the world’s largest universities today. We need to bring the same revolutionary mindset to our tech skills base and match the offer we give school leavers to the needs of the economy, without preconceptions. The economy is changing once again – and if our higher education system does not adapt we risk being left behind.

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Frances Lasok is Head of Talent and Skills Policy, The Coalition for a Digital Economy (Coadec).

Columns are the author's own opinion and do not necessarily reflect the views of CapX.