3. Human Capital - Education and Skills
Human capital comprises the skills, knowledge and (crucially also) the health and wellbeing that people accumulate throughout their lives. As such it is a key component of labour (and hence, wider) economic productivity: but it also has personal and intrinsic value to individuals. Whilst there is a wealth of evidence that a healthy and well-educated population will increase economic growth, there is also an obvious link to reductions in poverty and inequality within economies and to more recent thinking on how improvements in human skills and knowledge can make climate change action and adaptation easier. The term "human capital" is usually used within economics texts, but is often associated with a narrow view of the economic impact of people rather than a rounded view that includes wellbeing: so the Group chose to use the wider concept of People to capture this aspect.
Develop policies that help to limit the consequences of 'scarring'. It has been shown that those entering the labour market in a period of downturn suffer long-term negative consequences in health and other areas of life. Providing ways to connect such people to firms this year could include incentivising employment or apprenticeships. Helping university and school leavers spend a year in some kind of national volunteering service related to teaching or caring is another possibility. Alternatively, there might be support for those wishing to upgrade shortage skills particularly related to the digital field.
Develop a policy that protects the social and cognitive wellbeing of workers forced into premature retirement by making use of their experience and skills. It is likely, and there is supporting evidence from the US, that a consequence of Covid 19 will be to cause some workers to exit the labour earlier than planned Notwithstanding legislation on age discrimination, older workers made redundant by Covid may find it hard to get another job and yet have skills and experience to share combined with needs to be socially and cognitively engaged. Thinking about skills, companies and not for- profits might be incentivised to develop mentoring programmes that make use of early retirees in this way. These positions may also have the effect of embedding firms more closely into the communities in which they exist, which could in turn be beneficial both for their employees and the communities where they exist.
Consider work-sharing schemes. There are examples where countries have developed work-sharing policies and giving additional incentives for this for a short period of time could mitigate problems of large numbers of discouraged workers, that is people who would like work but are not actively searching for it given the high levels of unemployment that look immanent. Work-sharing in the short-term may be more valuable than other active labour market policies as a recent review of many studies finds the latter are less effective when unemployment is high.
Increase the development of digital skills. For the UK, there are shortages of skills related to IT and STEM subjects. There may be a need to increase general IT literacy of the workforce and also to increase the proportion of the workforce able to take on job roles that make more intensive use of digital skills (for example in finance or creative industries). Digital skill development if done in a work context allows workers to earn an income and be productive at the same time. That said, if there is a short term shortage of work, digital training for the unemployed may have low opportunity cost in terms of productivity.
Consider policies that promote wellbeing at work. There are also instrumental reasons for considering the wellbeing of employees. Significant relations between worker wellbeing on the one hand, and productivity, customer loyalty and retention on the other have been documented in research on management practices. Given that social relations at work are a key aspect of wellbeing at work, and given the need to physically distance, governments might consider commissioning guidance on good relations in the workplace.
Extract from Submission from Paul Anand et. al.
3.1 Fair Work
A number of responses were supportive of the accelerated development of Fair Work principles, particularly during the recovery phase. These include submissions from:
- Citizens' Advice Scotland
- Poverty Alliance/ Wellbeing Economy Alliance
- Carnegie Trust UK
- Inclusion Scotland
A significant proportion, as discussed in section 2.6, linked Fair Work principles to conditionality of support for business. There were also numerous suggestions that there should be greater publicity about, and wider understanding of Fair Work principles amongst the Scotland's businesses.
As might be anticipated, there were a large number of submissions that suggested that there should be a refocusing of Scotland's Skills Strategies to address the risks of unemployment, recognising the importance of high participation sectors. The scope of this document means it is not possible to go through all of the individual points and suggestions made, but a selection of the responses is outlined in the table below.
Helping university and school leavers spend a year in some kind of national volunteering service related to teaching or caring or support for those wishing to upgrade shortage skills particularly related to the digital field - work-sharing policies and giving additional incentives for this for a short period of time could mitigate problems of large numbers of discouraged workers given high U.
The importance of place-making in the design and execution of public policy has a key role to play, recognising that a 'one size fits all' approach is unlikely to work, and that the physical built environment and the supporting infrastructure, including digital, needs to be designed around the needs of communities, serving both their economic and societal needs.
Equality and Human Rights Commission
All local authorities should seek to understand the incidence of digital exclusion of pupils facing socio-economic disadvantage in their areas and make urgent plans to support these pupils, including pupils formally or informally excluded from school prior to the introduction of social distancing measures
Glasgow Economic Recovery Group
Priority Support for the Excluded: Create a targeted programme, delivered through Universities and Colleges, business and the voluntary sector, as a matter of urgency,
STEM Skills – look to significantly increase education places for engineering and technology to support our innovation economy, although this may require some changes to how funding is delivered particularly for FE colleges
Digital Skills – address digital inequalities. Conversion of digital loans to digital grants - enhancing the Codeclan model.
Create an Emergency Regional Skills Programme – quickly set up a co-ordinated workforce development programme / council with responsibility for setting a regional skills programmes that cuts across business, education institutions, SDS and councils.
More training and staff development as well as promotion of benefits of sectors reliant on seasonal/migrant workers
The economic fallout from Covid-19 will have the greatest impact on younger adults, particularly those less well-established in the labour market. There will be a major challenge to get people back into employment and a strong case can be made for supporting widespread education and reskilling, particularly relating to emerging challenges of a greener economy or improved social care if Scotland wishes to be the inventor of our future growth rather than the consumer.
Scottish Environment LINK
Retain and enhance skills by:
- Promoting business ownership models that retain jobs and skills in the Scottish Economy such as Community ownership Public ownership Employee ownership
- Green New Deal
Scottish Human Rights Commission
Small tax base = skills crucial for recovery
The 'digital divide' and the potential that a digital first strategy could further marginalise already disconnected communities and groups
Scottish Land Estates
Training allowances available, focus on leisure & tourism,
- Skills Development Scotland & Lantra to expand Skills Matching Service to other rural sectors
- Reduction on employer's national insurance and breaks for creating new positions
- Companies able to create employment to be given enhanced support by enterprise companies
- Skills development and training to be eligible to similar tax treatment to research & development tax credits.
A specific suggestion around linking institutions to create a Renewables Transition Training fund - Scottish Government can utilise its education and skills powers and work with Skills Development Scotland and further education institutions to introduce a Renewables Transition Training Fund. A Renewable Transition Training Fund can support oil and gas professionals, supply chain businesses, tradesmen and public servants to acquire sustainable, exportable skills and join the renewable energy industry internationalise our industry, and can use its trade, export and investment powers to highlight that Scotland's skills can help other countries decarbonise their economies while maintaining economic growth.
Create a National Workforce Academy
Aggregate & commission industry led content on 'open – platform'
Breadth of learning for all types of transition training; bite sized; short sharp 10-week courses. Facilitated by tutorial support; learning performance assessment; accredited to SCQF qualifications
Leverage the assets of FE colleges; Universities; private providers
Empower Scottish workers to commit to personal 'upskilling & reskilling'
'Skills Wallet' to incentivise workers to upskill
Stratified entitlements based on economic & skills needs
Enable more rapid transition from declining occupations to areas of growth, in advance of disruption
Enrich all learning with a greater emphasis on applied learning
Invest in skills, especially in youth employment
Targeted support to enterprise in deprived areas (Clyde Gateway as good practice) that tackles precarious employment as well as unemployment
The Poverty and Inequality Commission
People in poverty should be connected to jobs through active employment support schemes.
A number of suggestions were made specifically around apprenticeships. See table.
Large impact on apprenticeships of crisis - Expand role of FWDF
Glasgow Economic Recovery Group
Find new ways of supporting young people through the next couple of years. Until school and 'out of school' care has been finalised this will impact disproportionately on females. Entry level jobs will also be impacted more as these roles generally don't have the ability to work from home.
Highlands and Islands Enterprise
A variety of apprenticeship models are essential to aid recovery and should be expanded and developed for emerging sectoral opportunities in blue and green growth.
Apprenticeship models which work for remoter areas and where micro and small enterprises dominate are required
The Scottish Government can utilise its education and skills powers and work with Skills Development Scotland and further education institutions to introduce a Renewables Transition Training Fund
Targeted employer recruitment incentives for Micros/SMEs in priority sectors and or providing Apprenticeship and/or Fair Work opportunities should be supported
Targeted and bespoke active labour market policies alongside upskilling and re-skilling the workforce and safeguarding apprenticeships. Assess how these are delivered, developing new innovative approaches to work-based learning. Target sectors hardest hit by pandemic
South of Scotland Enterprise
Broaden apprenticeships and encourage collaboration between small providers
Helping businesses to develop the digital skills to do this and recognising that not everything can be done on-line and social contact remains important.
Need to build on the significant investment in our digital learning and skills model to offer training opportunities within region rather than requiring people to travel for these opportunities.
3.3 Employability schemes
A number of submission focused on employability schemes. These responses tended to be around encouraging take-up, increasing support for different groups and to review existing schemes in the light of the post-virus economy.
Enhance support for employability schemes for key groups at risk of poverty – lone parents, disabled people, young people and deliver this through third sector organisations.
Glasgow Economic Recovery Group
Include a digital audit / assessment during initial interaction of employability provider (SDS, DWP, GCC, FSS)
Council on Deafness
There needs to be greater promotion of and take up of the UK 'Access to Work' benefits so that those affected by deafness and others are recruited, promoted and fulfil their economic potential.
Citizen's Advice Scotland
Review Scotland's employability provision to ensure it is focused on C19 impacts
Scottish Human Rights Commission
It will be important as the Scottish Government develops its plans for economic recovery that suitable investment is set out in the forthcoming Scottish budgets to facilitate the delivery of employability and re-training services that are targeted at those who require them most and aligned with the social and economic needs of Scotland post COVID-19.
More specialist employability programmes will be vital in the context of increasing unemployment and a transition to a wellbeing oritentated economy where skillsets will need to adapt. Those furthest from the labour market and hardest hit by the virus must be at the centre of new employability system.
Health and Social Care Skills partnership between the region's universities and colleges as part of the Integrated Regional Employability and Skills programme.
3.4 Jobs Guarantee
A number of respondents raised the notion of a jobs guarantee, either state-driven or business-led.
Targeted and bespoke active labour market policies. E.g. job or wage guarantee schemes.
Introduce a nationally funded jobs guarantee programme, offering a 6 month job with accredited training.
Creating an intermediate labour market offer which supports a guaranteed offer of a job (incentivised via wage subsidy scheme/built-out ERI), apprenticeship, or high-quality training place for all young people out of work for more than six months. • Simplifying funding draw down for ESF programmes already reaching young people to support those sitting outside the JCP and Fair Start Scotland support
Consider preventative spending to improve outcomes for people and communities and reduce demands on public services. Point 6.10 of the Christie Commission. YouthLink Scotland would insist on consideration given to a statutory obligation on local authorities to provide universal and targeted youth work services.
3.5 Labour market reform
There were a small number of submission calling for more radical labour market reform. One key submission was by the STUC. See box.
Create higher quality, better paid jobs:
- Increasing the National Minimum Wage to £10 per hour
- Introduce a nationally funded jobs guarantee programme offering a 6 month job with accredited training.
- Introduce sectoral bargaining arrangements for sectors where labour is undervalued.
Share the number of hours worked across the economy by:
- Introducing a four day week
- Increase security of working hours by banning insecure contracts
And Introduce a Minimum Income Guarantee
Submission by STUC
SOLACE Scotland raised the notion of introducing a requirement for workers to be represented on company boards and suggested that employment law should be devolved to the SG.