educating the economy 30 th march 2015 / 30 mawrth 2015 addysgu'r economi
TRANSCRIPT
Educating the Economy 30th March 2015 /
30 Mawrth 2015
Addysgu'r Economi
Lee Waters
Director, Institute of Welsh Affairs
Cyfarwyddwr, Sefydliad Materion Cymreig
Julie James AM
Deputy Minister for Skills and Technology
Dirprwy Weinidog Sgiliau a Thechnoleg
Tim Peppin
Director of Regeneration and Sustainable Development, WLGA
Cyfarwyddwr Materion Adfywio a Datblygu Cynaladay, CLIC
Educating the Economy
Tim PeppinWLGA
30th March 2015
Overview
• Positive inter-relationship• Social return on investment• Need for new and ‘joined-up’ thinking• Sustainable development – what is it about• What it is not• Implications for education and economy• Concluding comments
Positive inter- relationship
• Human capital - education improves skills of workforce, leading to greater productivity and economic growth
• Innovation - education improves capacity of the economy to develop of new ideas and technologies
• Knowledge transfer – education spreads knowledge needed to apply new ideas/make use of new technologies
• Quality of education is important – not just no. of years• Qualifications (entry requirement) vs skills (performance)• Economic growth leads to greater national and personal
wealth, increasing resources/opportunities for education • Causality? – does highly educated workforce strengthen
economy or does strong economy attract skilled workers?
Social return on investment
• Individual gain from investment in education
• Positive externality – wider societal gains
• Link between education and productivity
• Need for long term perspective• Importance re. flexibility and social
skills
Need for new and ‘joined-up’ thinking
• The concept of growth as ‘good’
• Need growth, but of the right type
• Concept of sustainable development helps
• Well-being of Future Generations Bill
SD – what is it about?
• encouraging development that meets our needs without adversely affecting the ability of our children (and theirs) to meet their own needs as they grow up
• providing a better quality of life for our own and future generations in ways which:
• promote social justice and equality (local/international)
• enhance the natural environment and respect its limits, using only our fair share of the earth’s resources
• enhance the cultural environment and sustain our cultural legacy
SD – what it is not
It is not:
• solely about the environment / ‘green issues’
• anti economic growth
• about financial viability (in a narrow sense)
• yet another set of issues to deal with...
• ... involving processes and ‘tick box’ mentality
Implications for education and economy 1
• Thinking ‘social, economic and environmental’ simultaneously
• Taking economic decisions that consider social and environmental impact
• Education to ensure we understand the inter-dependencies
• A more aware population/workforce will make better (more sustainable) decisions
• More aware businesses will demand workers who understand and make the connections
Implications for education and economy 2
‘Futures’ issues – threats and opportunities:
• external dependency vs education/training for indigenous entrepreneurship and local supply chains
• rising energy prices vs renewable energy generation
• mobility constraints vs sustainable transport
• reduced productivity vs innovation and eco-design (with HE/FE input)
• infrastructural deterioration vs investment in resilience measures
• ageing population vs new forms of health & social care (incl social enterprise)
• food scarcity vs local food production and processing
• increasing pressures on health vs preventative measures
• environmental stress vs enhancement of ecosystems services
• housing crisis vs development of affordable housing
• tourism slump vs local eco-tourism
Concluding comments
• Education fundamentally linked to economic performance
• Consider the parts of the economy we need to perform
• Need to be thinking and planning ahead – milestones
• What skills do we need to achieve those milestones?• What new business opportunities does this create?• Don’t forget the ‘foundational economy’• Education - the ultimate foundation
Coffee Break and Networking
Egwyl Coffi a Rhwydweithio
Dr Gavan ConlonPartner, London Economics
The economic and social impact associated with adult skillsEducating the EconomyLondon Economics, 30th March 2015
Are adult skills important?
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
48.8% of publicly funded training is accounted for by 16-17 year olds
29.6% of publicly funded training is accounted for by 18- 24 year olds
21.6% of publicly funded training is accounted for by individuals aged 25 or above - i.e. more than one in five hours of training - ie more than 193 million hours
• Yes! Information from the Individualised Learner Record suggests that more than 1 in 5 hours of all publicly funded training (16+) is received by those aged 25 or above. This corresponds to approximately 42% of all hours amongst those aged 18+. This represents approximately 193 million GLH in 2012-13
Does skills acquisition matter to the individual?• Normally, when economists looks
at the impact of education, training and skills acquisition, we consider the earning and employment effects.
• Analysis of the Individualised Learner Record (covering all publicly funded training in England) indicates that the acquisition of training boosts earnings and employment
• The effect is clear, persistent into the medium term and occurs for all qualification levels, and irrespective of location of delivery (i.e. workplace/classroom)
-1%
1%
3%
5%
7%
9%
11%
13%
15%
t+1 t+2 t+3 t+4 t+5 t+6 t+7
Level 4
Level 3
Level 2
Level 1
Time period
0%
1%
2%
3%
4%
5%
6%
7%
t+1 t+2 t+3 t+4 t+5 t+6 t+7
Level 4
Level 3
Level 2
Level 1
Time periodTime period
Earnings effect: Age 25+ (vocational only)
Employment effect: Age 25+ (vocational only)
Source: Department for Business Innovation and Skills Research Report 106
Does this only apply to ‘big’ qualifications?
Some commentators suggest that earnings and employment returns are only important if they are associated with ‘full qualifications’.
Not true! There are earnings and employment returns associated with qualification attainment – but also associated with improvements in (small increments in) skills proficiencies
Evidence presented the OECD indicates that after controlling for qualification level, there are additional earning and employment returns associated with literacy, numeracy and ICT proficiencies – and penalties for not up-skilling
This means that there are always benefits associated with improving skills – there is no saturation point
What does this mean in financial terms?
• Talking about econometric analyses of earnings and employment outcomes is all very nice in theory – but what does this mean in terms of money?
• Quite a bit!
16 18 64
£
Opportunity cost associated with further qualification attainment
Annual earnings associated with adjacent
level of attainment
Additional earnings associated with higher
level of attainment
Lifetime benefit from qualification =Present Value ( - )Additional earnings
associated with higher level of attainment
Opportunity cost associated with further qualification attainment
For instance, recent research for the OU estimated that relative to possession of only 5 or more GCSEs at grades A* - C (or equivalent), the
mean net graduate premium associated with an UG degree for a representative OU student
(completing the degree PT at age 39) was estimated at approximately £95,000 for a male and
£51,000 for a female.
The corresponding net public purse benefit was estimated at approximately £95,000 for a
male and £47,000 for a female.
There were also very significant economic returns to the individual and the public
purse associated with other forms of qualification attainment – i.e. stand-alone modules, HE
Diplomas. Foundation Degrees
What about the wider economic benefits?
• Individuals and the public purse both benefit from investment in human capital – but we need to talk about employers...... do they see
benefits? Yes, in addition to the greater skills acquired, a substantial proportion of learners indicate that businesses generate a benefit from enhanced training – both in a static sense - but also in a dynamic sense (this is known as absorptive capacity!)
• Employees also mention their improved skills in the workplace, including a better ability to do their job (and better career prospects) – though this does not mean that learners leave training firms (more likely to be the opposite!)
Improved skills that can be used across a range of jobs/industries
Increased ability to do their job
Better career prospects
Improved employment prospects
Got a job that better suited their skills and circumstances
85%73%71%
54%
73%
Helped employers make better use of latest technological innovations
Helped employers better train their workforce
Helped employers become more productive
Helped employers develop/redesign new processes, products or services
Helped employers better meet the needs of their clients
31%43%34%
38%
51%
Research undertaken for OUIW
What about the wider non-economic benefits?
• Its not just about money!• Learning, training and skills
acquisition has the opportunity to be transformative and have a life changing effect on people’s own lives, as well as the lives of their families and those in their communities
• Adult skills improve (literacy, numeracy, communication , presentation and problem solving); however, many learners also indicate that that they are more enthusiastic about learning, have better direction in their lives, better able to help their own children improved self esteem, and improved quality of life
More enthusiastic about learning
More likely to undertake further learning
More likely to undertake further learning at higher level
Increased self-esteem
Improved quality of life
86%86%75%
92%
66%
Improved literacy skills
Improved numeracy skills
Improved communication skills
Improved presentation skills
Improved problem-solving skills
63%43%
68%70%
76%
Research undertaken for OUIW
Thanks – any questions?
Dr Gavan ConlonPartner, London Economics020 3701 [email protected]
Interpreting the OECD slide• Skills proficiencies are classified as Level 0/1, Level
2, Level 3, and Level 4/5
• Given the heterogeneous returns to skills identified in the feasibility study, the analysis is undertaken at three different levels of formally recognised education: Lower-secondary (and below), upper-secondary (and post-secondary non-tertiary) and tertiary level.
Return to tertiary education compared to upper-secondary –at level 3 literacy proficiency
Return to level 2 literacy compared to level 0/1 at upper-secondary level
Estimates are colour coded – green (tertiary), red (upper secondary) and blue (lower secondary), while different shapes correspond to different skills proficiency levels:
Level 0/1Level 2Level 3Level 4/5
Returns to education are identified as the gap between shapes of different colours
Returns to skills are identified as the gap between different shapes of the same colour
Rhys Williams Government and Business Relations Leader, G.E. Aviation /Arweinydd Cysylltiadau Llywodraeth a Busnes, G.E. Aviatio
Imagination at work.
Introduction to GE Aviation Wales
See tutorial regarding confidentiality disclosures.
Every 2 seconds, a GE-powered aircraft takes off.
P&W JT9,JT8,JT3RR Olympus,
RB211 22B,524 C/D/H,535,Conway
CFM56-3,5A
1924 Opening in
London
Imperial Airways
1940/ 89
BA Site in Wales
2000 CFM-7 Capability
1991 GE Acquisition
GE Wales Milestones
2007
GE90 – 115B
Capability
2008 GP7000
Capability
1998 CFM56-5B Capability
• OEM Support CFMI/GE• +1200 Employees• 1.2M sq. ft. - Supported by two
“state-of-the-art” engine test facilities
• Repair & Accessory Overhaul – at engine overhaul or individual unit level
1999 GE90-94B Capability
GE90-94B, 115B,
CFM56-3,5A,5B,5C
and 7BGP7000
RB211 524H
RB211 (Boeing 747, 767)Thrust >60, 000
GE90 (Boeing 777)Thrust 76,000 to 115,000
GP7000 (Airbus A380)Thrust 70,000 to 81,500
CFM56 (Airbus A320,340, Boeing 737)Thrust 18,000 to 34,000
BOEING 737-600
Aircraft Engines Serviced at GE Wales
GE WalesPowering a global fleet
+90 customers worldwide+90 customers worldwide
31GE – Aviation
GE Proprietary Information Subject to restrictions on the cover or first
page
ATO Wales
Continuing with growth
GE90
CFM56
RB211
GP7000
$1.0B$1.2B
$1.4B
'06 '07 '08
$1.5B
'09
$1.8B
’10
$1.9B
’11
$2.2B
’12
$2.6B
’13
$2.7B
’14
GE Aviation Wales Apprentice programme• GE Aviation Wales – One of largest
Apprenticeship Schemes in Wales
• 100 Engineering & Business Apprentices
• In partnership with Coleg y Cymoedd and the University of South Wales
• 3 year programme
• Invest over £1.4million in 2013
• Extensive network of assessors who provide coaching, mentoring and training,
• In 2013, GE received over 900 applications for the 25 apprenticeship places available.
• 60 Interns
• Network 75, Bursary Scheme & Masters Programme
• Duke Of Edinburgh & STEM
Graduate & Internal Schemes
Internships• 12mth scheme: Aimed at technical & non-technical
degree students across all areas of business• Feeder program to other schemes
Masters & Trainee programs• Take the best of the interns and support them on a
masters scheme• Both Engineering & Business courses in functional areas
“Wales Leadership Schemes”• 2-3 years in duration, fast tracking to accelerate learning
& growth• Rotational roles in shop supervision, materials
management, planning, six sigma, quality• Create general business & leadership skills• Use existing employees & best of interns & trainees
• Why do we need “pipeline programs”
– Maintain highly skilled shop, replace natural attrition & fuelling growth.
– Develop technical skills & general business skills
• What are our programs
– Apprenticeships for school leavers
– Internships & traineeships for graduates
– Internal schemes to accelerate learning
• How do we do it
– Local recruitment of apprentices
– UK wide recruitment of graduates
– Local development of internal talent
Working with the community
Universities/schools
• 2014 – 4000 Volunteer Hours
• 22 Volunteer projects
Caerphilly Miners HospitalRestore & refurbish the hospital into a centre for the community
LlamauSupporting and offering training and skills to vulnerable young people of Wales
GE & charityGE Volunteers
STEMCareer days, site visits, work experience, EESW, STEM Ambassadors, Techniquest Numeracy Initiative, Womens Network, Girls Get SetUniversity InternshipUniversity of South Wales, Bath and Bristol offering roles in purchasing / materials functions, HR, Finance and engineering “National Graduate Placement Careers”
Ty-HafanWelsh 3 Peaks-Over $1.6m raised
BITC Give & Gain DayPenygraig Project to create a sustainable town centre for the community
Lunch and Networking
Cinio a Rhwydweithio
1- The role of Business in Adult Education’sa) Fundingb) structure (Type,
Curriculum etc)
2- How can the apprenticeship model be adapted to make a greater impact on the Welsh economy?
Roundtable Discussion
1 - Rôl Busnes mewn Addysg Oedolion:
a) Cyllidb) Strwythur (Math, Cwricwlwm ac ati)
2 - Sut y gellir addasu'r model prentisiaeth i gael mwy o effaith ar economi Cymru?
Trafodaeth Bwrdd Crwn
Coffee Break and Networking
Egwyl Coffi a Rhwydweithio
1- Is the focus on qualifications beneficial to the Welsh economy or do we need more focus on other skills?
2- What skills does the Welsh economy need more of among the adult population?
Roundtable Discussion
Trafodaeth Bwrdd Crwn
1 - A yw'r ffocws ar gymwysterau yn fuddiol i economi Cymru neu oes angen i ni ganolbwyntio ar sgiliau eraill? 2 - Pa sgiliau mae economi Cymru angen mwy ohonynt ymhlith y boblogaeth oedolion?
Lee WatersDirector, Institute of Welsh Affairs
Cyfarwyddwr, Sefydliad Materion Cymreig