The Chamberlain News

Skills shortages biggest obstacle to Birmingham’s growth

Skills shortages are the biggest obstacle to economic growth in Birmingham, according to a report to be launched this morning.

The Birmingham Economic Review 2017 has been produced by the Greater Birmingham Chambers of Commerce and the University of Birmingham’s City-REDI.

The new survey spells out Birmingham’s strengths and weaknesses, and says that the city is more successful than most in terms of attracting inward investment and establishing new businesses.

Birmingham also has above average employment in a number of sectors, including finance and insurance, education, public administration and defence.

In addition, there are a number of major opportunities for the city, including the new High Speed 2 (HS2) railway, potentially the most significant transport infrastructure project in the UK since the motorways were built in the 1950s and 1960s.

The economic review says that HS2 will have a substantial impact on the economic and transport environment in Birmingham and its surrounding areas.

But all of the good news could be undone by the skills shortage issue, and a number of experts who have contributed to the report have highlighted this as a major problem.

Dr Catherine Harris, City-REDI, University of Birmingham, said Birmingham was the youngest major city in Europe, with under-25s accounting for nearly 40 per cent of its population.

The economic review said that harnessing the potential arising from the high proportion of the population being under 25 was a key opportunity for the city. Dr Harris said:

Such a large population of under 25s in the city is incredibly exciting because these young people will become the workforce of tomorrow and represent a great amount of potential. However, a young population is only an asset if they are equipped with the skills and opportunities they need to succeed as they enter the local workforce.

In practice, this means closing the gap between business and education to help develop a sound skills base, becoming more attractive to graduates so that we retain talent in the city, and working together to address unemployment and skills gaps across Birmingham.

City-REDI colleague Professor Anne Green added that Birmingham had its fair share of high level skills, due to being home to a number of world class universities, but the big problem was in the area of intermediate and low skills. She said:

Local and regional statistics show that in Birmingham and the West Midlands this long tail of low skills is more pronounced than nationally, and also that employment rates are lower than average.

Andy Street, Mayor of the West Midlands, has made addressing the skills challenge his priority. In speeches at the recent Conservative Party Conference, he set his sights on the Department for Education as part of the build up to ‘Devo Deal II’ which is expected to be announced in the Chancellor’s Budget on 22 November.

Mayor Street ticked off with Department for Education

Sources close to the Mayor have indicated that the region’s case is receiving a good hearing in Government, alongside ‘asks’ on housing and further Metro investment.

Glenn Caton, president, Northern Europe, of Mondelez International, one of Birmingham’s major employers, said that much more needed to be done in his company’s sector. He said:

We need schools to provide the basic skills in English and maths, as well as inspiring pupils into science, technology, engineering and maths (STEM) subjects, and careers advisors to connect with businesses to provide alternative pathways. We recognise the value apprentices bring to our business and are committed to investing in a sustainable apprenticeship programme.

Judith Armstrong, CEO of Millennium Point, said that the ‘widening’ skills gap was a direct threat to Birmingham’s ‘innovative future’, which required a ‘significant’ proportion of new roles requiring job specific higher-level skills and qualifications. She added:

In addition to improvements driven by changes in the curriculum, we must collaborate to bridge this gap by investing in initiatives that raise awareness of STEM and encourage pursuit of it in education.

Paul Faulkner, chief executive, Greater Birmingham Chambers of Commerce said:

Skills gaps clearly remain a major concern in Greater Birmingham, and we consistently see this reflected in our Quarterly Business Report.

However, the Birmingham Economic Review 2017 provides a detailed, striking analysis of the areas most affected. It is the hope of the Chamber that this review will help businesses and policy makers ensure, going forward, that local people have the skills they need to access and succeed in the new jobs being created across Greater Birmingham.

Hilary Smyth-Allen, Executive Director of BPS Birmingham which represents the city’s rapidly growing business, financial and professional services (BFPS) sector, commented on the report’s findings:

This review from our colleagues at the Chamber and the University of Birmingham is a useful barometer of the city region economy and it’s good to see it build on last year’s report.

It once again underlines the need to capitalise on our latent asset – a youthful, diverse population – and the need to ‘grow our own talent,’ as set out in the BPS Birmingham Future Commission five years ago.

Many business and representative groups have long recognised the skills gap as the number one priority. It drives our organisation with initiatives like Professional Services Week, the Trainee Professional Scheme, Leadership Development Programme and Birmingham Young Professional of the Year (BYPY).

With the Mayor’s new focus on skills and the WMCA’s Productivity and Skills Commission, which is undertaking its first ‘deep dive’ into our sector, there’s a chance that subsequent versions of this report will have some positive news when it comes to skills.