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UK Manufacturing Skills Shortage, Leadership and Investment
Dr Patrick McLaughlin
European Manufacturing Strategies Summit
November 2017
2
The Telegraph – 4th March 2017
“Britain’s industrial
growth plans could be
endangered by a
chronic lack of skills
and an ineffective
education system”
3
Literature Review-
Academic Journals and Conference
papers
Government & Organisation (G&O) and media reports
from the last 5 years
Selected from ABI and Factiva database
Analysing papers using Nvivo software
Interview & Survey
• Government & Organisation and Media reports were selected from
credible sources.
• Nvivo software was used to analyse these published reports.
• Interview and Survey Questionnaire was designed to have an insights
about skills shortage, leadership and investment from industry personnel.
Methodology
4
Government & Organisation Sources
198
5
Media Sources
175
6
Literature Review
Knowledge Transfer
Support Introduction
of New technology
Foster Innovation
Empower People
Encourage foreign and domestic
investment
• 1% rise in the share of skilled workforce will
increase the productivity by 0.2 - 0.5% in the
long run (Holland et al, 2013).
• 1% increase in training days leads to a 3%
increase in productivity (CEDEFOP, 2007)
www.cranfield.ac.uk
History Analysis
Government, Organizations and Media Articles
8
UK Manufacturing Skills Shortage
56%
78%
63%
79%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
NON-TECHNICAL SKILLS
TECHNICAL SKILLS
Government & Organizations Media
9
39%
39%
41%
43%
48%
50%
52%
54%
55%
62%
0% 20% 40% 60% 80%
CLOUD COMPUTING
PRODUCTION & PROCESS ENGINEERING
MACHINE OPERATIVE SKILLS
INDUSTRIAL BIOTECHNOLOGY
MATERIAL SCIENCE
SOFTWARE SKILLS
ELECTRONIC & ELECTRICAL ENGINEERING
ADDITIVE MANUFACTURING
DATA ANALYSIS SKILLS
ROBOTICS & ARTIFICIAL INTELLIGENCE
Government & Organizations
Top Ten UK Manufacturing Skills Shortage —Technical
18%
21%
22%
23%
26%
28%
33%
33%
36%
36%
0% 10% 20% 30% 40% 50% 60% 70%
MODELLING SKILLS
ELECTRONIC & ELECTRICAL ENGINEERING
INFORMATION TECHNOLOGY
ROBOTICS & ARTIFICIAL INTELLIGENCE
DATA ANALYSIS SKILLS
MECHANICAL SKILLS
COMPUTER PROGRAMMING
MATHEMATICS
MACHINE OPERATIVE SKILLS
SOFTWARE SKILLS
Media
10
18%
20%
22%
28%
32%
32%
33%
37%
43%
46%
0% 10% 20% 30% 40% 50%
NUMERACY & LITERACY
LANGUAGE
TEAM WORKING
PROBLEM SOLVING
RISK & PROJECT MANAGEMENT
SUPPLY CHAIN
MANAGEMENT SKILLS
COMMUNICATION SKILLS
LEADERSHIP SKILLS
INNOVATIVE SKILLS
Government & Organizations
14%
15%
15%
16%
18%
19%
21%
21%
23%
25%
0% 10% 20% 30% 40% 50%
TEAM WORKING
PROBLEM SOLVING
RISK & PROJECT MANAGEMENT
LANGUAGE
NUMERACY & LITERACY
SUPPLY CHAIN
COMMUNICATION SKILLS
INNOVATIVE SKILLS
LEADERSHIP SKILLS
MANAGEMENT SKILLS
Media
Top Ten UK Manufacturing Skills Shortage —Non-Technical
11
49%
41%
33%
28%25%
33% 33%36%
31%
42%
LESS INTEREST IN MANUFACTURING RELATED SUBJECTS
GENDER INEQUALITY LOW INCOME FEW QUALIFIED APPLICANTS
RETIRING WORKFORCE
Government & Organisations Media
Root Cause of the Skills Shortage in UK Manufacturing
12
Major Actions Taken to Deal With the Skills Shortage
14%
17%
13%
22%
50%
11%
15%
33%
40%
54%
0% 10% 20% 30% 40% 50% 60%
HIRE FROM OVERSEAS
INTERNSHIP
AWARENESS AND INTEREST DEVELOPMENT
INVEST IN SKILLS TRAINING
APPRENTICESHIP
Government & Organisations Media
13
Apprenticeship Programme Starts
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
No
. o
f A
pp
ren
tic
es
hip
s
Engineering and Manufacturing Technologies All Apprenticeships
Source: Department for Education—Jan 2017
14
Government &Organisations
Media
47%
40%
All Stakeholders Should Work Together
Leader and Contributors for Skills Development
79%
66%
47%
28%
22%
50%
38%
21%17%
13%
Employer Government School &University
AcademicInstitution
EngineeringInstitution
Government & Organisations Media
www.cranfield.ac.uk
Current View Analysis
Interview & Survey Results
16
Interview and Survey
24 respondents
Phone/Face-to-Face interviews and Survey
responses
Majority from
Aerospace Manufacturing
Companies with
10-15,000employees
Chairmen, Directors, Skills training Heads, Operations
Managers, General Managers
Average Years of Experience was
25yrs
17
1%
2%
2%
3%
3%
5%
9%
14%
17%
44%
0% 10% 20% 30% 40% 50%
Finance
HR
Material Sciences
Software Skills
Supply Chain
Sales and Marketing
Management
Science and Technology
Technicians
Engineering
Top Ten UK Manufacturing Skills Shortage
Main Skills Shortages -
Engineering sub-
categories
1. Systems Engineering
2. Production Engineering
3. Software/IT Engineering
4. Control and
Instrumentation
Engineering
5. Electrical Engineering
Others
• Mechanical Engineering
• Process Engineering
• Quality Engineering
• Maintenance
• Civil Engineering
18
• The move towards Industry 4.0, will make Software and Digital Engineering
skills the most sought after in the near future.
• Machine Application will be important for future manufacturing processes.
• Supporting skills like purchasing, management and supply chain will form an
important part of the skill shortages.
• Advanced manufacturing will change the skill requirements in the future.
Future Skills Shortages
19
Leaders and Contributors for Skills Deliveries
88%
70%
58%
46%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Universities Employer EngineeringInstitutions
Government
Areas for Focus
• Manufacturing basics should be taught
at the school level.
• Educational institutes should provide
more practical courses, and invest more
in manufacturing.
• Initiatives like open days and
workshops, to make manufacturing an
attractive career choice.
• Emphasis on STEM subjects.
20
Skills Training Investment Responsibility
83%
75%
41%38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Government Employer ManufacturingInstitutions
Both InvestGov &
Employer)
Successful Outcome of Investment
• Increased retention of workforce.
• Flexible and qualified employees.
• Less breakdowns and delays
leading to increased productivity and
profitability.
• More opportunities for young
graduates.
• Enable the workforce to keep up
with the increasing complexity of
manufacturing processes.
www.cranfield.ac.uk
Comparison With Competitor Countries
22
2016 (Current) 2020 (Projected)
Rank Country Rank Country
1 China 1 United States
2 United States 2 China
3 Germany 3 Germany
4 Japan 4 Japan
5 South Korea 5 India
6 United Kingdom 6 South Korea
7 Taiwan 7 Mexico
8 Mexico 8 United Kingdom
9 Canada 9 Taiwan
10 Singapore 10 CanadaDelloitte - Global Manufacturing Competitive Index 2016
Global Manufacturing Competitive Index 2016
23
0
10000
20000
30000
40000
50000
60000
70000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Do
llars
$
Year
Manufacturing Average Wage by Country
US UK Germany Japan
Source: UKCES, OECD, Trading Economics, WEF
Manufacturing Wage
24
Manufacturing Workforce Demographics
88%82%
62%
40%
12%18%
38%
60%
JAPAN GERMANY US UK
Ratio of Researchers(engineers and scientists)
in Manufacturing 2015
Manufacturing Non-Manufacturing
Source – Japanese Science and Technology Indicators 2016
0%
1%
1%
2%
2%
3%
3%
4%
Germany United Kingdom United States
Apprentices as percentage of Manufacturing workforce 2015
25
Categories Germany US UK Japan
Education Enrollment Rank
Secondary Education
Enrollment Rate
33 59 8 36
Tertiary Education
Enrollment Rate
35 5 48 42
Quality of system
Quality of education system 13 17 21 37
Quality of math and science
education
17 33 38 18
Quality of management
schools
23 7 2 58
Training
Local availability of
specialised training services
13 16 6 23
Extent of Staff Training 12 15 20 10
Education Enrolment and Quality (World Economic Forum’s Global Competitiveness Index)
26
Japan
1. Declining, aging population and a shrinking workforce.
2. University curricula do not meet the emerging needs of its industries.
Germany
1. German adult population shows high levels of under skilled labour.
2. Reduction in enrolment in dual education system.
3. Aging baby boomer generation of skilled workers.
USA
1. Downsizing and offshoring.
2. Lack of adequate training and education pipeline for talented new entrants.
Root Causes for Skills Shortages
0
5
10
15
20
25
30
35
2012 2013 2014 2015 2016
Per
cen
tage
%
Year
Skill Shortage Vacancy (SSV) by Country
UK Germany Japan US
27
Germany
1. Dual vocational training program - On-the-job training and work experience.
2. Co-Determination, which ensures the right of workers to participate in the management of thecompanies they work for.
Japan
1. Adopting higher international standards for education.
2. Nurture local talent and cast a wider recruitment net to include more women.
3. Partnerships and exchanges with foreign companies for two-way transfer of knowledge andmanagement practices.
US
1. Collaborating with colleges and universities to review curriculum.
2. Setting up open access training programs. Programs to assist manufacturers in building skills thatculminate in a certified skill level.
3. Remote skills training for manufacturing, allowing employers and employees alike to make use ofself-paced learning.
Actions taken to deal with skills shortage
28
Conclusions
Technical
Skills
Non-
Technical
Skills
Innovative
Skills
Management
Skills
Robotics &
Artificial
Intelligence
Software
Skills
System
Engineering
Media
Government &
Organisations
Interview &
Survey
Management
Skills
29
Recommendations
Employers to work closely with Universities and Schools –curriculum design
Government should encourage strategic use of ‘apprenticeship levy’
Raising awareness - educational and engineering institutions should work together
Quality of manufacturing apprenticeships has to be improved – independent monitoring
Strategic overseas recruitment for short term
All stakeholders of manufacturing should work together
30
Launching a white paper on “UK Manufacturing Skills Shortages, Leadership and Investment”
UKManufacturingSkillsShortages,
LeadershipandInvestment
WhitePaperbyCranfieldUniversity
24thMay2017
NationalManufacturingDebate
Supportedby;
www.cranfield.ac.uk
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