The UK has an alarming shortage of skilled workers in science, technology and engineering. Between 2009 and 2015, one in six new hires in the the UK technology sector were European Union citizens. The UK is leaving the European Union. Go figure.
The government’s latest attempt to plug that gap, announced by chancellor Philip Hammond in the November budget, is to invest £100 million to train 8,000 new computer science teachers. The position was identified as having an acute job shortage earlier this year, though the paucity of skilled, British workers to fill so-called STEM jobs has been a quiet crisis for years.
And Brexit isn’t going to help. Almost a million EU citizens working in Britain are planning to leave or have already decided to leave the UK as a result of Brexit, according to a survey by KPMG. The professional services firm found that 55 per cent of EU citizens with PhDs and 49 per cent of postgraduates were planning to leave or considering leaving the UK. The expected exodus will hit STEM jobs hardest.
A quarter of manufacturing firms represented by Engineering Employers Federation (EEF) have been hit by a fall in job applications from the EU since the Brexit vote; 16 per cent had seen more European employees quit in that period. Currently, 11 per cent of manufacturing jobs in the UK are held by EU nationals, with many positions attracting no UK applicants. In 2015, lobby group EngineeringUK warned the nations had a shortfall of about 55,000 people with engineering skills every year. At the time, the STEM skills gap had worsened for nine years in a row.
The UK’s continued lack of high-skilled workers for key sections of the economy is a major reason behind the country’s struggling productivity growth. For the last 15 budgets, the Office for Budget Responsibility has forecast productivity growth at two per cent. And every year it has been forced to revise its forecasts downwards. It now estimates that productivity in the UK will only reach 1.6 per cent by 2022. According to the Office of National Statistics (ONS), the input versus output of workers in the UK per hour worked – which is the key measure of productivity – fell 0.5 per cent in the first three quarters of 2017. Output per hour worked in the UK in 2015, the most recent year for which full data is available, was 15.9 per cent below the G7 average.
Measuring and comparing productivity is difficult, but a sizeable skills gap is a key component of the productivity puzzle. And it’s not a puzzle that’s unique to the UK. Technological progress should make productivity rise, so why isn’t it? The chancellor argues the UK is at the front of an ongoing “technological revolution”, the anticipated realities of a hard Brexit beg to differ. On the one hand, the government is making the argument for increased investment in research and development, but on the other it risks starving academic institutions and companies of that most valuable of assets: skilled workers, regardless of nationality.
This political mindset feeds into a bigger problem of the quality of employment in the UK. At around 75 per cent, employment in the UK is at its highest rate since 1975, but the number of people in so-called “bad jobs” – part-time workers and those who don’t get a regular, living wage – has increased. As the ONS noted in a 2016 report, many people working part-time came “directly from unemployment”. When is a job not a job? When it doesn’t pay enough to live. The dichotomy at play here is simple: on the one hand, the government is desperate to lift the number of skilled, British workers in the UK. But it is also compelled to bring down unemployment numbers by whatever means necessary
In another small announcement around the November budget, the government inadvertently revealed its mild panic about the UK’s struggling digital economy. For years, Downing Street – under both Theresa May and to a greater extent David Cameron – has courted Old Street to try and benefit from tech’s shining halo. The outcome? Increased funding for startups and AI and a doubling in the number of visas available for skilled developers and computer scientists. The need for more visas highlights the hypocrisy of the government’s current plan for growing STEM in the UK. We need more skilled, British workers. But we’re also headed for a hard Brexit that could rip out the skilled EU workers our economy relies on. It’s the equivalent of using a band-aid to put out an inferno.
The trends of under-employment, the STEM skills gap and Brexit come together to form an impending cliff-edge for the British economy. Without skilled workers, it is almost impossible to improve productivity and grow an economy. The theory goes that increased productivity will raise living standards, but as Britain struggles with a low-skilled economy – from which skilled EU nationals are fleeing in their thousands – there’s little sign of recovery or impending revolution.