Inventing our future Collective action for a sustainable economy

Where are we now?
Long-term trends and
strategic challenges
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for the region is to build on the economic linkages within the Greater
South East to create further sources of competitive advantage and
growth. The size and dynamism of markets and innovation excellence in
the Greater South East is outstanding, and there is huge potential for
additional growth through greater collaboration between our businesses
and institutions and promoting our collective strengths.
Improving skills to meet changing demand
One of the principal drivers of economic performance is skills. Evidence
reveals that the East of England workforce has relatively poor skills
attainment in terms of higher-level (NVQ3 and NVQ4+) qualifications.
There are two potential reasons for this. One is that there may be a lack of
supply of skills, caused by out-migration, out-commuting, lack of demand
from individual learners, or a lack of capacity in further and higher
education provision. There may also be a lack of demand for these skills
by employers. Demand for higher-level skills will increase dramatically
over the next 20 years.
Figure 6
Percentage of UK jobs by level of qualification required: projections to 2020
No qualification
Below level 2
Level 2
Level 3
Level 4
Level 5
0 5 10 15 20 25 30 35
Source: CE/IER employment projections (2005)
It will be vitally important that people in the region are encouraged
and supported to progress up the ‘skills escalator’. Improving skills levels
and training have major impacts on business productivity and earnings.
For example:
• raising the proportion of workers trained in a given industry by 5 per
cent can be associated with a 4 per cent increase in value added, and
a 1.6 per cent increase in wages
• skills shortages can often act as a barrier to the take-up of new
technologies and innovations. Research has shown that a 10 per cent
increase in the number of firms reporting skilled labour shortages in an
industry will lead to a permanent 10 per cent reduction in its fixed
capital investment and a temporary 4 per cent reduction in its R&D
expenditure.
2020
2004
1994