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Manufacturing in the Heart of the South West
Employment & Skills Issues
14th November 2011
Ben Neild
Assistant Director, SLIM
www.swslim.org.uk
Presentation
Contents
Overview of manufacturing in the Heart of the South West
Five issues for discussion during the workshop
1. Product Innovation
2. Business Support and Planning
3. Higher level skills & graduates
4. Workforce skills
5. Leadership & Management
www.swslim.org.uk
Source: ONS
Manufacturing in HoSW
In 2009, UK manufacturing sector generated some £140 billion in GVA.
However, between 1990 to 2009, manufacturing’s contribution to UK GDP has
fallen from 22% to just over 11%.
Manufacturing as a % of GVA in leading industrial countries, 1990-2009
This fall has been
faster in the UK than
in many other
industrialised
nations.
Due to factors like:
-off-shoring
-out-sourcing
-falling prices
www.swslim.org.uk
Source: UNCTAD
Manufacturing in HoSW
Locally, the decline in manufacturing GVA follows the national trend,
declining from 20.5% in 1998 to 12.8% in 2009.
Share of Total GVA accounted for by Manufacturing (%), 1998 - 2009
25%
20%
% of GVA
15%
Heart of the South West
SW
GB
10%
5%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
www.swslim.org.uk
Source: LFS
Manufacturing in HoSW
There were approx 67,200 manufacturing employees in HoSW in 2010
Equivalent to 10.2% of total employment in HoSW (8.8% nationally).
14%
Variations within
HoSW are significant.
% of employment
12%
10%
4.2% in Torbay
13.2% in Somerset
8%
6%
4%
2%
0%
Devon
Plymouth
Somerset
Torbay
HotSW
South West
Low-tech Manufacturing
Medium-Low Tech Manufacturing
Medium-high tech manufacturing
High tech manufacturing
www.swslim.org.uk
England
Lower than average
prevalence of hightech. More mediumhigh tech and lowtech.
Source: BRES
Manufacturing in HoSW
Although there are areas of high productivity, overall manufacturing output per full
time employee (FTE) is significantly lower in HoSW than it is across GB as a whole.
Productivity per FTE, Manufacturing sub-sectors, HoSW & GB, 2009
Sector
Chemicals and nuclear fuel
Food, drink and tobacco
Electrical and medical equipment
Manufacture of transport equipment
Textiles, clothing, leather goods and footwear
Non-metal products
Manufacture of machinery
Printing and publishing
Metal products
Wood and paper products
All Manufacturing
All sectors
GVA per FTE (£000s)
Heart of the
South West
Great Britain
71.4
116.4
56.4
56.1
50.5
55.0
41.1
54.7
38.3
32.7
32.0
41.6
31.9
46.2
29.8
53.9
27.7
36.0
22.6
35.5
40.2
53.1
34.2
49.7
Between 1998 and 2009 manufacturing productivity in HoSW rose by 34%.
Nationally it rose by 58% in the same period.
www.swslim.org.uk
Source: SW Regional Accounts
Manufacturing in HoSW
Manufacturing Businesses by sizeband, 2009
90%
80%
% of business units
70%
60%
50%
HOTSW
40%
SW
30%
England
20%
10%
0%
1-10
11-49
50-199
200 or more
Employee Sizeband
www.swslim.org.uk
Source: SW Regional Accounts
Product Innovation
Policy
Supporting particular industries / sectors was anathema to Mrs Thatcher.
Things changed little under Labour, until the recession, the collapse of
financial services, the call for ‘rebalancing’ and a new ‘industrial activism’.
This activism focused on ‘new’ industries that would support jobs growth post
recession – New Industries / New Jobs.
This has resulted in a range of small scale initiatives. Examples include:
• Technology and Innovation Centres (TIC) – ‘will draw on excellent
university research to accelerate the commercialisation of new and
emerging manufacturing technologies’
•
EPSRC funded centres for Innovative Manufacturing to ‘combine inventive
research and business acumen to develop the sorts of innovative ideas
taken forward to commercialisation through TICs’
• Manufacturing Fellowships - Providing exceptional engineers from business
to lead a £1 million programme of research within HEIs
www.swslim.org.uk
Source: Going for Growth – Treasury / BIS
Product Innovation
HotSW Strengths
Plymouth University - 'the enterprise university’ offering help to businesses in
entrepreneurship, research, knowledge transfer.
Completing a £19m marine facility w/ state-of-the-art research facilities, including
the most advanced wave tank and testing facilities in the country.
University of Exeter – investing £230m in a science strategy w/ 5 themes,
including: Climate Change, Systems biology & Functional materials.
Investing £2.6 million Centre for Additive Layer Manufacturing (CALM) to help
businesses, entrepreneurs develop prototypes.
Also offer Knowledge Transfer Partnerships, joint EU research proposals
Further Education - e.g. Petroc’s ‘Business Innovation Service’ / South Devon
College ‘Innovation Escalator’ etc
www.swslim.org.uk
Source: LFS
Business Support
A complex and quite crowded landscape, involving providers that are:
National / Government backed
•
Business Link
•
MAS / SW MAS
•
UKTI
Sector focused
•
EEF
Membership based
•
FSB / CBI
Institutionally based
•
University Plymouth’s
‘Enterprise Solutions’
•
South Devon College’s
‘Business Advantage’
‘Local’
•
North Devon Plus
•
Torbay Development Agency
The emphasis, with the disbanding of Business Link, is on LEPs and Local
Authorities taking increasing responsibility for ensuring business support meets
local business needs.
www.swslim.org.uk
Planning
•
A ‘presumption in favour of sustainable development’
•
Increasingly localised decision making
•
Retention of growth in business rates
•
Enterprise Zones
Highly contested area, with tensions between ‘development’ and
‘environment’.
Role of the LEP, as a voice for the business community.
Already used, in relation to support for the South Devon Link Road
www.swslim.org.uk
Source: LFS
Higher Level Skills
Employment in manufacturing is becoming more skills intensive.
Employment by Occupation (% of employment), SEMTA, SW, 1987 & 2017
35%
30%
1987
2017 (proj)
25%
20%
15%
10%
5%
0%
www.swslim.org.uk
Source: Working Futures
Higher Level Skills
‘Access to a skilled workforce, particularly science, technology, engineering
and maths (STEM) skills, is vital for the sector'.
Plan for Growth, BIS / HM Treasury
Exeter and Plymouth universities provide c.30% of all STEM provision in
the South West - over 20,000 students in total.
50% of all Plymouth & 40% of Exeter students were studying STEM
subjects in 2009/10.
Since 2002/03, the number of STEM students at the two universities has
risen by around 18%, faster than either regional or national growth.
The proportion of all students studying STEM subjects at Exeter has
risen v. rapidly, from 26% in 2002/03 to its current level of 40.1%.
www.swslim.org.uk
Source: LFS
Higher Levels Skills
In 2008-09, nearly 43% per cent of first degree graduates from UK HEIs
were in STEM-related subjects.
However, of these graduates, less than 5% entered employment in the
manufacturing sector, despite average wages in engineering comparing
favourably to other professions.
Plan for Growth, BIS / HM Treasury
Nearly a quarter of UK engineering graduates are working in nongraduate jobs or unskilled work such as waiting and shop work.
46% of 2009 engineering graduates were in jobs directly related to their
degree subject six months after leaving university.
Prof Emma Smith, Uni Birmingham
www.swslim.org.uk
Source: LFS
Higher Level
Skills
So how do we make better use of these skills?
•
Graduate Internships
•
Knowledge Transfer Partnerships
•
Student Business Partnerships
www.swslim.org.uk
Source: LFS
Workforce Skills
The manufacturing workforce is gradually becoming more highly qualified.
Manufacturing Employees by Qualification Level, South West, 2006 & 2011
30%
% of manufacturing employees
25%
20%
15%
2006
2011
10%
5%
0%
NQF Level 4 and
above
NQF Level 3
NQF Level 2
NQF Level 1
www.swslim.org.uk
No qualifications
Source: LFS
Workforce Skills
But…. it remains less well qualified than the workforce as a whole
Employees by Qualification Level, Manufacturing vs All, South West, 2011
40%
35%
% of employees
30%
25%
20%
Manufacturing
All Sectors
15%
10%
5%
0%
NQF Level 4
and above
NQF Level 3
NQF Level 2
NQF Level 1
www.swslim.org.uk
No
qualifications
Source: LFS
Workforce Skills
Skills-shortage-vacancies (vacancies that employers cannot fill because applicants
lack the right skills) are uncommon - less that 0.2% of total employment.
Skills gaps (where staff are not being fully proficient in their current job) are common
– reported by 20% of employers and as affecting 200,000 employees nationally.
Skills missing are most commonly practical / technical & job-specific. Team-working
and communication skills are also cited.
They are most prevalent in Skilled Trades and among machine operatives.
They can have significant impacts – e.g. increase in the workload for others (51% of
employers); increased operating costs (37%); difficulties w/ quality standards (24%).
But (good news) 70% say they are due to people lacking experience and / or having
been recently recruited.
Points to issues around recruitment, induction and initial VET – rationale for
Apprenticeships etc.
www.swslim.org.uk
Source: NESS 2009
Leadership &
Management Skills
Are generally acknowledged to be critical to the success of all enterprises.
However…. managers are also identified as the occupational group where the
need to upskill was greatest.
“There remain situations where “cheap labour and a shortage of capital to invest in
automation sees workers taking items off one belt and placing them on an adjacent
conveyor system all day long”.
Training individuals in these roles is unlikely to impact on the profitability, growth
or survival, unless accompanied by a review of “work organisation, job design,
how employment relationships are managed and conditions are achieved whereby
employee motivation, commitment, and discretionary effort are maximised”’.
Keep, Mayhew & Payne, From Skills revolution to productivity miracle – not as easy as it sounds?
cited in B. Neild, Training and business survival during recession, SLIM, Nov 2008.
www.swslim.org.uk
Source: LFS