Future-proofing labour supply: creating skilled workforces for the future in the UK and Germany

17 June, 2014

business, competitiveness economy, Germany, global economy, innovation, trade unions, UK workforce,

Our 24 hour conference on the future of employment in the UK and Germany highlights the shared challenges, different approaches the two countries are taking and areas where they could learn more from each other.

UK-Germany Dialogues

Supporting competitiveness and innovation: how to create the workforce of the future in the UK and Germany?

Friday 13 – Saturday 14 June 2014 (WP1332)

The UK and Germany have more to do to ensure they will have appropriately skilled workforces to remain competitive in the future, particularly in relation to the growing economic weight of Asia.

That was the highlight message from our recent bilateral British-German meeting on creating the workforce of the future in both countries. Co-convened by Wilton Park and the Bertelsmann Stiftung, with support from the Foreign and Commonwealth Office, this second meeting in our series of UK-Germany dialogues brought together a wealth of expertise from the two countries across a range of different professional and academic experience and disciplines.

skilled workforces, UK and Germany, competitiveness and innovation,

Eric Thode, Senior Expert at Bertelsmann Stiftung; Andreas Prothmann, Minister and Head of Department, Economic and Financial Affairs and German Embassy; Tony Sims OBE, Incoming Director, Germany, UK Trade and Investment (UKTI) and Stefan Georg, Chairman, Delta Economics in discussion with Robin Hart, Wilton Park Programme Director during our conference on ‘Supporting competitiveness and innovation’

Whilst experiences and historical institutions differ across the two countries, each has something to learn from the other about creating the workforce of the future, and both face similar challenges. Adaptations in the area of labour policy, education policy and cultural attitude may be necessary.

Both countries face a contracting supply of labour as members of the ‘baby boomer’ generation start to retire. Retaining as much experience as possible from this generation will be crucial to businesses remaining competitive, and as such both countries should consider making end-of-career working more flexible.

Meanwhile, emerging economies are forecast to produce increasingly large numbers of university graduates over the coming decade. By virtue of scale, this output will dwarf graduate output in the UK and Germany (graduate output in the latter is actually forecast to decline slightly over the next decade). This output will be especially telling in the cluster of degrees around science, technology, engineering and mathematics (the ‘STEM’ subjects): areas in which numerous commentators have noted a growing shortage of appropriately qualified graduates in both the UK and Germany.

Consequently, both countries will need to ensure that the quality of education delivered through degree courses is as high as possible. Both will also need to find ways to incentivise study of STEM courses – especially for historically under-represented groups in these fields, such as women.

The need for more STEM graduates is part of a wider shift towards more knowledge-intensive economies occurring in the developing world. At the same time, however, and counter-intuitively, commentators also project that transferable ‘soft’ skills (that is, distinct from specialised or technical ‘hard’ skills) will become relatively more important, and perhaps even dominant, in the world of work. The standard model of employment is changing from longer term employment with a smaller number of firms within the same sector, to shorter term employment with more firms in different sectors. Consequently, new career starters will need to hone key transferable skills to ensure they are flexible to the demands of the job market.

Whilst participants recognised Germany has room for improvement, something approaching a consensus formed around the need for the UK to learn key lessons from Germany. A particular example was the quality of the German vocational training system. This was understood to stand in stark contrast to the UK’s vocational system. Making the vocational route into work as attractive an option as higher education, whilst also ending negative social and cultural attitudes towards vocational education, should be a priority for UK policy makers.

Informal discussions taking place during a coffee break

Informal discussions taking place during a coffee break

The report from this meeting will be published in due course and is to be found on the conference page.

The meeting highlighted the value of a bilateral exchange amongst states with similar, if different, practices, traditions and expectations. This continued the trend from our earlier meeting with the Bertelsmann Stiftung on demographic ageing in public policy (held last year in May). We look forward to continuing work with Bertelsmann on issues of mutual interest to both countries.

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Demographic ageing: policy implications and strategies

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