Scotland's National Strategy for Economic Transformation

5. Skilled Workforce

A skilled population is fundamental to business productivity and economic prosperity. We will focus our activity on the transition to net zero, the digital revolution, and lifelong training making sure employers have the supply of skills they need.

5.1 Our Aim

To ensure that people have the skills they need at every stage of life to have rewarding careers and meet the demands of an ever-changing economy and society and that employers invest in the skilled employees they need to grow their businesses.

5.2 The Opportunity

Skills enable people to more effectively participate and progress in the labour market and lead fulfilling lives. Providing people with the opportunities to develop skills, irrespective of who they are and where they live, is key to ensuring everyone has the opportunity to participate fully in the labour market. For parents and carers to develop the skills and qualifications that will enable them to compete for jobs, and ultimately create a more diverse workforce, we must address the barriers faced by some, including transport and available childcare.

A skilled population is also key to business productivity and economic prosperity. The OECD has argued that for the UK "developing the right set of skills and making full use of them in the economy is a recipe for higher productivity, growth and inclusiveness".

The evidence shows that Scotland already performs well on tertiary education levels compared to the rest of the UK and other small advanced European economies. While data shows that the majority of employers are able to find the right people with the right skills to fill vacancies within their organisations the pandemic and EU exit have created labour shortages across almost all sectors. Last year around 21% of vacancies were reported as being hard to fill by employers due to a lack of skills, knowledge or experience among applicants. In the absence of devolved immigration powers, targeting inward migration from the rest of the UK can add to Scotland's skilled labour pool. A 25% increase in people relocating from the rest of the UK to Scotland would double net migration and add 100,000 people to Scotland's labour pool over the course of this strategy. Significant inequalities persist in educational attainment with around 10% of Scotland's working age population having low or no qualifications. Currently 22% of Scotland's working-age population are economically inactive (this figure includes full-time students). Understanding what policies can be deployed so that people can take part in the labour market is a significant opportunity.

Over the next 10 years, with the greater use of artificial intelligence, changes in the world of work, the decarbonisation of traditional industries and the emergence of new industries, skills requirements will change fundamentally. Digital, data, cyber security, creative and leadership skills are likely to be at a premium, whilst we know that the ability to collaborate and cooperate will be essential for the anticipated rise in caring roles and as technology replaces routine work and frees people to focus on the elements of human service that really matter to people. The precise shape of the changes are difficult to predict, but we do know that people will need to be adaptable and flexible and we recognise the need to provide access to information and advice, tailored to individual needs and circumstances. We will emphasise the importance of businesses and skills providers capturing equalities information to understand the diversity of the workforce and the reach of service provision.

Population challenges are being faced in many rural and island communities, and addressing these challenges will be vital to ensuring these communities can realise the ambitions of this strategy.

5.3 Foundations of Success

A range of initiatives are already in place to grow Scotland's population, and support skills development. This includes our response to the Scottish Funding Council Review of Coherent Provision and Sustainability,^[18] Scotland's Population Strategy, the Young Person's Guarantee and the Future Skills Action Plan which is delivering a strong platform of work based learning. A considerable programme of reform is already taking place across Scotland's schools, including the implementation of the OECD recommendations through Professor Ken Muir's consultation and Professor Louise Hayward's review of qualifications. We will also build on the recent Careers Service Review to ensure that individuals considering their career choices at any stage of their lives can access the best information and advice.^[19]

We are working with partners to address the under-representation of women in science, technology, engineering and maths (STEM) courses and careers, to ensure that Scotland's STEM sectors are diverse, equal and prosperous. Similar initiatives are addressing the gender gap within Scottish agriculture.

A key focus of skills provision is the implementation of the Climate Emergency Skills Action Plan. Our Green Jobs Skills Hub will gather and cascade information on skills shortages and opportunities throughout the labour market, enhancing intelligence and promoting more effective responses. The current land-based review of learning offers an opportunity to link across existing work in the Skills Action Plan for Rural Scotland and the Climate Emergency Skills Action Plan.

5.4 Our Programme of Action

Project 11: Adapt the Education and Skills System to make it more Agile and Responsive to our Economic Needs and Ambitions

Who / We will

Government and Public Sector

Develop proposals for a national digital academy focused around the provision of SCQF level 6 qualifications including Highers, to open up access to a wide array of subjects to a wider array of learners. This is likely to include broadening young people's access to subjects which may not be available locally, as well as supporting post-school learners to access learning later in life and around other commitments.

Government and Public Sector

Deliver the forthcoming national strategy on adult learning that will ensure that community learning is more consistent and comprehensive, underpinned by more strategic investment and building a stronger evidence base around needs, engagement levels, quality of provision, and support for professionals.

Government and Public Sector

Deliver key actions from the Scottish Funding Council Review of Coherent Provision and Sustainability including the development of more, shorter industry-facing courses; and enhancing approaches to strategic provision and skills planning based on learning from pathfinder projects to enable a more responsive, coherent education and skills system.

Government, Public Sector, Business and Partners

Implement the next phase of the Green Jobs Workforce Academy and launch a new skills guarantee for workers in carbon intensive industries, providing career guidance and training opportunities, enabling people to seek employment in other sectors.

Project 12: Support and Incentivise People, and their Employers, to Invest in Skills and Training Throughout their Working Lives

Who / We will

Government and Public Sector

Implement a lifetime upskilling and retraining offer that is more straightforward for people and business to access and benefit from. This will use evidence from the delivery of the National Transition Training Fund and Flexible Workforce Development Fund, and what we know works well from Community Learning and Development.

Government and Public Sector

Target more skills investment and support to working age people in poverty or at risk of moving into poverty (particularly the six priority family types). Ensuring that access to training for more marginalised groups is made as easy as possible, we will work with learners and delivery partners to better understand the steps we must take to improve provision, including in areas such as training at times that suit people with caring responsibilities, with additional support needs or that fit around current jobs.

Government, Public Sector, Business and Partners

Develop a new Skills Pact to underpin our commitment to strong partnership working with both employers and unions. The Pact will focus on action we can take together to improve investment in skills and training and ensure provision better meets the needs of employers and employees. As part of this, we will work collaboratively with employers and unions to explore how we can increase employer investment in upskilling and retraining.

Project 13: Expand Scotland's Available Talent Pool, at all Skills Levels, to Give Employers the Skills Pipeline They Need to Take Advantage of Opportunities

Who / We will

Government, Public Sector, Business and Partners

Implement a focused Talent Attraction programme to attract key skills and talent from the rest of the UK. This will align with Scotland's identified key sector strengths and new market and cluster building opportunities and provide a joined-up "landing zone" for targeted employees and their families supported through our commitment to create a Migration Service for Scotland. We will work closely with industry partners, and the recruitment sector, to leverage best available data and ensure most effective targeting.

Government and Public Sector

Progress the actions from Scotland's Population Strategy aimed at attracting, welcoming and supporting those who choose to make Scotland their home to help address rural and island population challenges and sectoral skills shortages in the labour market.

Government, Public Sector, Business and Partners

Systemically address Scotland's labour market inactivity challenges. Assess trends within different labour market inactive groups and understand what steps can be taken to bring more individuals into the labour market – including through the use of childcare and transport provision, part-time/flexible working, support for employees with disabilities, and business start-up and work from home opportunities. This is inextricably linked to reducing child poverty, including the approach of pathfinders to test how to ensure holistic support enables parents to enter, sustain and progress in work.