Forecasting Future Skills Needs in Ireland

Presentation to Ministry of Education

Ministry of Industry and CommerceAnd Delegation

Colombia

Dr. Catherine KavanaghDepartment of EconomicsUniversity College Cork, Irelandand Former ManagerExpert Group on Future Skills NeedsForfas, Ireland

Overview

Background to skills forecasting in Ireland

Expert Group on Future Skills Needs - today

Skills forecasting at the economy level and

some results for Ireland

Skills forecasting at the sectoral level

Background

Irish education system served Ireland well and played a critical role in helping to drive economic growth – Celtic Tiger, skills met by qualified workforce, returning emigrants and expansion of higher education graduate numbers

About 1995/96, evident there was shortage of skills, especially in some key sectors, (ICT)

1997 sees the establishment of the Expert Group on Future Skills Needs as part of a Business, Education and Training Partnership (BETP)

It is an independent advisory body appointed by government

Chair of Group is Dr. Danny O’Hare, Former President of DCU

Key focus – partnership approach Group comprises representatives from education, employees, enterprise,

government and State agencies

Background

Initial objectives of the Group were as follows:

Identify, in a systematic way, the skill needs of different sectors and to advise on the actions needed to address them

Develop estimating techniques that will assist in anticipating future skill needs and requirements of the economy and the associated resource requirements

Advise on the promotion of education and continuous training links with business at national and local levels

Consider strategic issues in developing partnerships between the business and the education and training sectors in meeting the skills needs of business (Skillnets arose from this)

Advise on how to improve the awareness of job seekers in sectors where there are demands for skills, of the qualifications required, and how they can be obtained

The Expert Group on Future Skills Needs - today

• The Expert Group on Future Skills Needs is the central national resource on skills and labour supply issues for the enterprise sector

• It is now chaired by a leading entrepreneur and business person – Ms. Anne Heraty

• The membership consists of representatives from education, training, business, employees, state agencies and government departments

• Crucially, the Department of Finance is represented on the Group, and there is international representation (OECD). Also, senior members from the two key government departments (DES and DETE)

The Expert Group on Future Skills Needs - today

• The Objectives now of the Group are as follows:

• Advise Government on projected skills requirements at national and sectoral levels and make recommendations on how best to address these needs

• Advise Government on associated priority training requirements and the most cost effective ways of responding to them

• Advise on any skills requirements that cannot be met internally at a given time and so must be met through inward migration

• Advise on development on content and delivery systems that support excellence in training quality elsewhere and on adaptions necessary to incorporate such developments into training provision in Ireland

• Respond to any request for advice from the Minister for Enterprise, Trade and Employment on training programmes that are supported through the National Training Fund

• Ensure that recommendations made are adequately assessed by the relevant responsible authorities and periodically inform members of the EGFSN of progress made in the implementation of such recommendations.

The Expert Group on Future Skills Needs - today

• The Group operates under the auspices of Forfás – the national policy and advisory board for enterprise, trade, science, technology and innovation

• The Group reports make recommendations to the Minister for Enterprise, Trade and Employment and the Minister for Education and Science

• The work of the Group is supported by a number of state agencies and government departments including Forfás, FÁS – (the national training and employment agency), Higher Education Authority, Department of Enterprise, Trade and Employment, Department of Education and Science, Industrial Development Agency and Enterprise Ireland

Map of Institutional Interaction

EGFSN Development

Established

2nd

Report

5th

Report Tomorrow’s Skills: Toward a

National Skills Strategy

3rd

Report

4th

Report

Merger with NTAC

1997 1998 2000 2007

1st

Report (ICT Focus)

2001 2003 2004

Sector

Skills

Focus

5 Key Reports

34 Reports

Ou

tpu

t

SLMRU/National Skills

Database Established

National Skills Database – circa 2001

• Operated by FÁS – the employment and training agency on behalf of the EGFSN

• It is the central data gathering and data analysis unit for the EGFSN

• Contains the following data

Demand for skills– Employment data – from CSO, by sector, occupation and education– Notified vacancies – from FAS, Irish Times (newspapers) and

www.irishjobs.ie– Immigration data (economic) – from DETE on work permits, work visas, etc.

Supply of skills– Education and training data – from all educational and training providers

(HEA for First Destination of Graduates report; HETAC and FETAC for graduation awards, all universities, institutes of technology, VECS, private colleges, FAS (for training info)

– Job seekers data - FAS

Summary of Key Points on EGFSN

• Independent body – with wide representation

• Well integrated into wider policy system through Forfás

• Grounded in evidence base provided by the National Skills Database

• Strong link to enterprise development policy

• Underpinned by social and economic theory

• Practical and workable solutions

• Undertaken at two levels:– Economy wide – recent development– Sector specific – will continue to be

important

• There is a recognition that we need to understand all aspects of the labour/skills market:– Public and Private– Traded and Non-Traded

Skills Forecasting

Towards a National Skills Strategy in Ireland – 2020

Tomorrow’s Skills

• So, what is it?

• This was a major economy wide skills forecasting exercise undertaken by the EGFSN over 2005/2006 which led to the publication of the National Skills Strategy in March 2007 – first of its kind in Ireland

• Sets out clear long-term objectives for Ireland’s education and training requirements to develop Ireland as a knowledge-based, innovation-driven, participative and inclusive economy with a highly skilled workforce by 2020

Tomorrow’s Skills

The Policy Context

Source: Enterprise Strategy Group

World-class Skills, Education

& Training

The Overall Conceptual Framework Used

HOW? Adoption of economic scenario for Ireland to 2020 based on

econometric forecasting model

Quantitative projections of labour/skills needs based on sectoral profile, occupational profile and educational profile (DEMAND – analysis conducted for EGFSN by ESRI))

Quantitative projections of labour/skills supply based on demographic projections, output from formal education system, net migration etc. – based on no policy change scenario (SUPPLY)

Qualitative projections on types of generic skills required in future based on a sample of occupations

The skills gap that would exist based on no policy change (DIFFERENCE BETWEEN DEMAND AND SUPPLY)

The desired outcome – a VISION that will drive enterprise development

Findings: the Current Situation

• High percentage of labour force with 3rd level qualifications (27%)

• High percentage of labour force with lower secondary education or below (37% - above OECD average of 30%)

• Low levels of adult literacy, expected to decline

• Poor participation in ongoing education and training (14% relative to EU average of 16.5%)

• Skill shortages in a number of sectors

• Strong educational profile of immigrant population – not being availed of

Findings: Changing Needs of Enterprise

• Shifting sectoral profiles

• Shifting occupational level profile

• Increasing emphasis on generic skills

• Occupational specific skills

Source: EGFSN, ESRI

Findings: Employment by Sector

0

2

4

6

8

10

12

14

16

18

20

22

24

2005 2020

Findings: Change in Absolute and Relative Employment by Occupation

from 2005 to 2020

-37

70

107

74

35 35

79

44

-5

4

-60

-40

-20

0

20

40

60

80

100

120

Abso

lute

Chan

ge in E

mplo

yment

('000s)

-60

-40

-20

0

20

40

60

80

100

120

Rela

tive

Chan

ge in E

mplo

yment

(%)

Change in Absolute Employment Relative Change in Employment

Source: EGFSN, ESRI

• Basic or fundamental skills such as literacy, using numbers, using technology;

• People-related skills such as communication, interpersonal, team working, customer-service skills; and

• Conceptual skills such as collecting and organising information, problem-solving, planning and organising, learning-to-learn skills, innovation and creativity, systems thinking

Findings: Increasing Emphasis on Generic Skills

Within Occupations There is likely to be demand for an:• Increasing Breadth of Knowledge• Increased Share of Knowledge Work / Reduced Share of Routine Work• Rising Qualification and Technical Skill Requirements• Importance of Continuing Learning• Significance of Regulation • Skills for Dealing with Others

• Management Level Skills• Sales and Marketing Skills• Language Skills• R&D

Enterprise Skills

Findings: Increasing Emphasis on Generic Skills

Findings: Labour Market in 2020

• Labour Market 2020 – based on No Policy Change Scenario– 2.4m in labour force– 1.4m of current workforce still in labour force in 2020– 640,000 extra young people from formal education– 310,000 = shortfall, demand outstrips supply

• Must be met from immigration and increased participation

– NOTE: Science, engineering, ICT, R&D skills integral to knowledge-based economy!!

The Gap

• No policy change scenario, the demand and supply analysis in 2020 shows the following:

5% of the labour force will have no formal/primary level qualifications

19% will have below upper secondary education 29% will have upper secondary education 24% will have post-leaving certificates and higher

certificate (certificate/diploma level) 28% will have tertiary education as their highest level

of education (honours degrees, masters, Phds)

Vision 2020

The Expert Group proposes a vision of a competitive, innovation-driven, knowledge-based, participative and

inclusive economy with a highly skilled labour force by 2020

18 177

44 3845

10 16 16

28 29 32

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Supply 2020 Demand 2020 Vision 2020

Perc

en

tag

e

Low er Secondary or less Upper Secondary/F.E.

Third Level: Certif icate/ordinary degree Third Level: Honours bachelor degree or above

Findings: Supply and Demand in 2020

Objective Setting and NFQ

• National Qualifications Framework (NFQ) is an agreed framework by which educational qualifications are classified

• Classifications based on standards and on learning outcomes. Includes recognition of previous learning and work experience

• 10 Levels:

1 and 2 = Level 1 and 2 Certificate 3 = Level 3 Certificate and Junior Certificate 4 = Leaving Certificate 5 = Leaving Certificate 6 = Advanced/Higher Certificate (FETAC or HETAC 7 = Ordinary Batchelors Degree 8 = Honours Batchelors Degree or Higher Diploma 9 = Masters Degree 10 = Doctoral Degree

Specific Objectives for 2020

• 48% of the labour force should have qualifications at National Framework of Qualifications (NFQ) level 6-10 – from national certificate to Phd

• 45% should have qualifications at NFQ levels 4-5 – awards equivalent to Leaving Certificate

• Remaining 7% are likely to have qualifications at NFQ levels 1-3 (below junior certificate, while aiming to achieve higher levels

Achieving the Vision

• Upskilling existing workforce: An additional 500,000 individuals in the workforce need to progress by at least one level of educational attainment above their current highest level

• Second level completion rate: (the leaving certificate, level 4 & 5) retention should reach 90% by 2020

• Educational Attainment of population: Ireland should aspire to have 94% of the population aged 20-24 with upper secondary education (level 4 & 5)

• Third level: The progression rate to third level to increase from 55% to 72% over the period 2020

Achieving the Vision

• Report also highlights the following

Integration of immigrants into the education and training system at all levels

Career guidance and mentoring for those at work Assistance for individuals and companies in

identifying their skills needs More awareness programmes that highlight the

benefit of education and training Education and training provision needs to be flexible

and responsive to the needs of employers and employees

Sectoral Skills Forecasting

• EGFSN identifies sectors of strategic importance – high growth and/or high employment (e.g tourism), those in decline, high value added etc. Also: enterprise can express a particular concern for a sector which it wishes the EGFSN to look at

• Research methodology may change depending on enterprise sector. A lot depends on how defined the sector is and how unique the skills are to that sector

Sectoral Skills Forecasting

• How? Sectoral profile – is there a sectoral plan? Analysis of skills/labour demand Analysis of skills/labour supply Normally, an international benchmarking element

looking at how skills are being developed elsewhere or what are the emerging skills in leading countries in this sector?

Technology and market trends – goes beyond demand and supply

Recommendations in relation to education and training systems

• Consultative process/sector expertise – helps information flows

Sectoral Studies

Sectors which the EGFSN has examined include:

• High Skilled Needs of the ICT Sector

• The International Digital Media Industry: Implications for Skills in Ireland

• The Skills Needs of the Medical Devices Sector

• The Skills Needs of the International Financial Services Sector

• The Demand and Supply of Skills in the Biotechnology Sector

• The Demand and Supply of Skills in the Food Processing Sector

• The Demand and Suppply of Skills in the Construction Sector

Horizontal Skills Studies

• Skills Needs of the Irish Economy: The Role of Migration

• Careers and Labour Market Information

• SME Management Development Skills

• The Demand and Supply of Language Skills

• The Supply and Demand for Researchers and Research Personnel

• National Skills Bulletin (Annual)

• Education and Training Supply Bulletin (Annual)

Skills Bulletin Reports

• Objectives• To provide the most comprehensive source of info on

education outputs in Ireland

• Raise awareness of current and possible skills shortages

• Share information with all interested parties

Other Studies that Inform Skills Forecasting

• Other studies that complement the work of the Expert Skills Group include:

FAS: Quarterly Labour Market Commentary – analyses data from CSO’s Quarterly National Household Survey once released

FAS: Irish Labour Market Review – annual review of labour market with some projections for employment, unemployment, and key economic indicators in the short term

For more information:

Visit the following:

www.skillsireland.ie

www.skillsstrategy.ie

www.forfas.ie

www.fas.ie