Skills: shared outcomes framework

Context – Where are we now?

12. The economic evidence paper that accompanied the publication of the NSET sets out the context for skills in Scotland.

13. Skills enable people to participate and progress in the labour market. Providing people with the opportunities to develop skills – irrespective of who they are and where they live – is a key driver of improved economic performance and wellbeing, which sits at the heart of the Scottish Government’s economic and labour market strategies.

14. People with more developed skills are more likely to be in employment. As well as improving the likelihood of being in employment, investing in skills helps people to progress to more fulfilling, secure, well-paid and fair work. This has wider social benefits.

15. Overall, a highly-skilled and engaged workforce is a key requisite for a successful economy. Skills increase an individual’s ability to do advanced tasks that add more value to the economy. Indirect impacts include enabling the development and application of more productive technology and innovation, supporting enhanced productivity and entrepreneurship and contributing to Scotland’s attractiveness as a destination for inward investment.

16. Scotland has performed well in post school education and has one of the highest shares of the workforce with at least tertiary education in Europe. However, the economy still faces a wide range of challenges with respect to skills, including:

• General skills shortages as measured by prevalence of 'skills shortage vacancies'. The labour market challenge has grown as economic activity has recovered following the pandemic and with impacts of EU Exit on migration;
• An ageing population, which is also translating to an aging workforce. There is evidence that working life is getting longer, with increasingly more people working beyond the retirement age. Latest projections suggest that these trends are long term and will continue. This highlights the importance of investing in lifelong learning.
• While Scotland has depended on migration to meet skills and workforce requirements – especially in some sectors; its share of foreign-born population is much lower when compared to other OECD countries. EU Exit will have reduced this further.
• Despite having challenges with respect to skills and general labour shortages, around one in five of Scotland's working age population is inactive. This group is complex and includes people with a long-term life limiting illness, full-time students, those discouraged from seeking work, and those who would take a job if other support was available. The share of inactive workers reporting that they are discouraged or not interested in work is extremely small (1 per cent). There is more that must be done to support those who want to work, but who are least able to, to be supported to access opportunities.

17. Addressing these challenges is critical if we are to build and maintain Scotland’s reputation for having a highly skilled workforce including; adapting and developing capability in response to the transition to net zero, increased digitalisation and Artificial Intelligence as well as responding to the demographic challenges of Scotland’s ageing population with more in-work training and upskilling and reskilling throughout our working lives.

18. This Framework is a core part of developing our understanding of how both agencies can work most effectively to support these outcomes and how we can deliver enhanced alignment of provision with economic need, resulting in a more agile and responsive system.

19. Figure 1, below, sets out the National Performance Framework outcomes and measures, and the skills actions from the National Strategy for Economic Transformation (NSET) to which all skills, labour market and education policies and programmes are expected to contribute.'