Jobs and Skills in Scotland The evidence - Skills Development Scotland

Nov 16, 2017 - A summary of the regions – strong, moderate and weak. 65. 6 Supply of skills in Scotland. 68. Demography. 69. Labour market participation. 73.
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Jobs and Skills in Scotland The evidence

November 2017

Contents Foreword


1 Introduction 3 2 The economic context 9 Economic growth 10 Productivity 14 3

Jobs in Scotland through recession and recovery 18 Global, Europe and UK context 19 Jobs in Scotland 23


Sectoral Economic Performance 36 Sector employment 38 Sub-sector employment 41 Key sectors 43

5 Regional economic performance Total employment Private sector employment Public sector employment Full time employment Part time employment Productivity Resident earnings Unemployment A summary of the regions – strong, moderate and weak

45 48 50 52 54 56 58 60 63 65

6 Supply of skills in Scotland 68 Demography 69 Labour market participation 73 Qualifications 76 7 Skills challenges in Scotland 81 Current skills challenges facing employers 82 Skills shortages 82 Vacancies and skills shortages by region 82 Skills shortages by sector 84 Vacancies and skills shortages by occupation 85 Main causes of skills shortages 86 Skills gaps 87 Skills gaps by region 88 Skills gap by sector 89 Skills gap by occupation 90 Skills gap by establishment size 91 Main causes of skills gaps 92 Impact of skills gaps 95 Response to skills gaps 96 Investment in skills 97 Underemployment 99 Involuntary underemployment 99 Underutilisation of skills 101 Graduate underemployment 102

8 Forecasting for the future Demand – output growth Demand – Scotland’s output growth Forecast productivity Employment forecasts Supply – population projections Sub-national projections (2014 based) The changing nature of jobs and work Technology and innovation Societal changes and changes in workplace cultures The impact of Brexit Productivity

103 104 105 106 107 121 122 123 124 125 126 126

9 Concluding remarks 127 References


Foreword This report is part of a major programme of work that has seen Skills Development Scotland invest heavily in the production of a robust and respected evidence base for the skills landscape in Scotland. We have published Sectoral Skills Investment Plans, and produced Regional Skills Assessments to support partners to make better decisions on skills investment at a regional level. Regional Skills Assessments have been used as the basis for developing Regional Skills Investment Plans, with the first launched in the Highlands and Islands. Damien Yeates, Chief Executive, Skills Development Scotland I am delighted to introduce the first report by Skills Development Scotland (SDS) on Jobs and Skills in Scotland: The Evidence. Jobs and Skills in Scotland: The Evidence draws together a range of published data sources and commentary to provide an overview of the current health of Scotland’s labour market, its performance since the financial crisis of 2008 and an analysis of future projections. It is designed to summarise the available evidence and provides analysis of known and emerging issues affecting the Scottish skills system.

The report highlights many strengths in Scotland’s economy which we can build on, such as the fact that, following the recession: • productivity in Scotland has grown at a faster rate than the UK • employment in Scotland has recovered and is above pre-recession levels • many key sectors have had good employment growth despite difficult trading conditions • Scotland has maintained a highly skilled workforce • the economy offers a range of opportunities for young people after school.

However, at a time of unprecedented uncertainty and opportunity, the report highlights fundamental challenges in the skills landscape and the wider economy, with implications for businesses, the education/training system and policy makers. Key themes highlighted through the report include: • boosting productivity is vital for our long term prosperity – Scotland’s productivity, like the rest of the UK, remains significantly behind other advanced economies • our growth