Towards a regional approach for skills policy

ABSTRACT

Focusing on the UK as a case study, this paper offers a critical discussion of current approaches for skills policy in the context of the increasing spatial imbalances that characterize advanced economies. We outline an integrated framework for regional skills policy, allowing a shift from ex-post interventions on industry-specific skills deficiencies towards a place-based perspective reflecting the dynamic evolution of skills requirements. Building on a systemic institutional approach, the proposed framework identifies synergies across skills and regional development policies connecting them through the role of shared skills in providing horizontal platforms, enhancing combinatorial opportunities across sectors for resilient structural change.

KEYWORDS:

• skills
• human capital
• regional policy
• Smart Specialisation
• regional development

JEL:

• L52
• O2
• R11
• R58

ACKNOWLEDGEMENTS

The authors are grateful to Anne Green and Neil Lee for many helpful comments, as well as the participants at the ERC-LBGCBP-RSA ‘Training and Productivity’ workshop for the feedback received.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. While we discuss below this issue in detail for UK skills policy, evidence of the industry focus towards skills can be seen also in the European Industrial Strategy: Skills for Industry initiatives focus on renewed investment in sector specialized skills; similarly, the European Skills Agenda does not include any regional perspective, concentrating instead on skills partnerships in key industrial ecosystems (European Commission, 2021).

2. Estimates suggest that 40% of UK workers are engaged in occupations for which they are not correctly qualified (OECD, 2017), and by 2030, almost 20% of the labour force could be under-skilled for their job requirements (Industrial Strategy Council (ISC), 2019).

3. These are particularly marked for jobs in declining industries and occupations at risk of automation (ONS, 2019).

4. Given the current structure of local skills policy intervention in the UK, the regional authorities we consider are LEPs, combined authorities and city-region deals.

5. An example is offered by the Apprenticeship Grant for Employers programme (Cavaglia et al., 2020).

6. To highlight this, a far-from-complete list of key players in recent years has included the Department of Education and Skills (DfES), Department of Education and Employment (DfEE); Learning and Skills Council (LSC); Department of Trade and Industry (DTI); Cabinet Office; HM Treasury; Department of Work and Pensions (DWP); LEPs, LEAs, UKCES, National Skills Task Force, RDAs, Business Link, Train to Gain, and Local Growth Fund.

7. Its origins are linked with the European Commission’s Europe 2020 Strategy for ‘smart, sustainable and inclusive growth’, and it is centred around identifying the region’s own strengths and comparative advantages, specializing and prioritizing investment in these fields through a strategic and shared policy vision for regional development. For more information, see https://s3platform.jrc.ec.europa.eu/.

8. This is also reflected in the persistent disconnect between skills policy and regional development policies.

9. At the policy level, this is partly reflected in the initiatives on transversal or transferable skills highlighted by EU recommendations for territorial employment pacts and the European Centre of Excellence for Key Competencies (European Commission, 2011).

10. We thank an anonymous reviewer for this insight.

11. Ex-ante consideration of regional human capital in the policy setting can be seen in specific initiatives such as Patto per il Lavoro (Pact for Employment and Growth) in the Emilia-Romagna region of Italy (Bailey & De Propris, 2019; European Commission, 2013). Similarly, the Basque Country has integrated skills and education providers into the S3 process, alongside local government and businesses, for the development of policies looking at future skills needs (Hazelkorn & Edwards, 2019). While these initiatives move towards the element of dynamic skills intervention highlighted in our proposal, they consider future skills still in terms of deficiencies and gaps to address for the growth of existing industries, rather than as sources of recombination to enhance regional adaptation and renewal processes. Indeed, ex-ante consideration of future skills needs is a necessary but not sufficient element to define the comprehensive and systemic interplay between skills and regional development policies outlined in our proposed framework.

12. Examples of this approach include proposals for territorial skills councils for digital transformations in the EU underlining the systemic element in the actors involved (European Commission, 2019) and the UK’s skills advisory panels designed to connect local employers and skills providers. While these initiatives offer evidence of possible linkages between skills ecosystems and the territory, they remain confined to the identification of future skills or implementation and monitoring of skills strategies in the locality. However, they do not play an active role in the design of S3 or indeed in integrating skills policy within broader regional development strategies.