Skills development takes centre stage in driving economic growth

Highlighting that skills are the backbone to creating good jobs, increased productivity, regional balance and in achieving Net Zero, his plans include a new ‘Skill Up’ programme and an expansion of the apprenticeship system. A timely update, as students are set to receive their GCSE and A-Level results this month and select a path which will ultimately determine their ‘skills set’.

Despite the good news story of a strong jobs market and low unemployment rate across the Northern Ireland economy, attention has turned to skills and the skills gap challenge faced by many sectors and employers across the region.

Skills are generally broken down into three categories:

1. Basic skills – those which everyone needs, including literacy, numerical and basic digital skills.
2. Essential skills – those which are transferable and applicable to almost any job, such as communication and teamwork.
3. Technical skills – those which are specific to a sector or role and are not easily transferred.  

But how important are skills to the Northern Ireland economy? Arguably, there is nothing more important for our economic success. 

For an economy to thrive, it needs a sufficiently skilled workforce across all three of the above categories. It also needs a high level of productivity – something Northern Ireland has struggled with, consistently falling behind that of its UK counterparts. Education and skills development are key drivers of productivity. Increased well-being also contributes to local economic development, with skills significantly correlated with life outcomes.  

However, there are challenges to achieving a sufficiently skilled workforce. Given the rate of acceleration of new technologies, sustainability targets, an ageing population, and the growing emphasis on placemaking, developing the skills pipeline and closing the skills gap will not be an easy task.

For employers specifically, it can be a struggle to attract the right people with the skill sets required. The 2024 Business Barometer report published by Open University in partnership with the British Chambers of Commerce, has found that nearly a half (44%) of organisations in Northern Ireland are still reporting worrying skills shortages.

In recognition of the skills imbalance and the challenges employers face, the IOD in partnership with Grant Thornton, MCS and SONI, established a Skills and Workplace Forum to identify key skills issues. To promote prosperity and flexibility to respond future opportunities, the report made 5 recommendations:

1. Reduce economic inactivity;
2. Greater engagement with schools;
3. Improve access and widen participation;
4. Make childcare work for everyone;
5. Change access to the apprenticeship levy.

As we look towards the future of the Northern Ireland economy, it is imperative that skills shortages remain to the fore. To make progress in closing the skills gap, there must be a genuine partnership between business, government, education, and training providers.

All parties must play a key role in stimulating the local skills system through strong collaboration and engagement to work towards a better future and, as the IOD’s Skills Workforce Forum report put it, ‘realise the full potential of our workforce, which is our greatest asset’.