Supply and Demand for Skills to 2020
The labour force is projected to grow to about 2.4 million by 2020. Approximately 1.4 million of the current workforce will still be in the labour force in 2020. An additional 640,000 young people will come into the labour force from the formal education system. The remaining additional 310,000 will be made up of immigration and increased participation by the existing population.
Table A.1 below (Column 1) shows the 2005 skills (educational attainment is used as a proxy for skills) profile for Ireland. OECD comparisons of this profile with that of other OECD countries are unfavourable. In 2004, only 6 out of 27 OECD countries had a worse performance than Ireland in terms of the percentage of the labour force who had only attained up to lower secondary qualification.
If we simply extrapolate current provision and demographic trends to 2020 and do not add to training and education output, the educational attainment of the labour force will have improved. This baseline ‘ no policy change’ scenario is set out in Column 2, Table A.1. However, it is important to remember that our main trading competitors will also have improved their educational profiles and that if Ireland is to compete effectively, it will need to build competitive advantage in the area of skills.
Comparing these baseline ‘no policy change’ educational attainment projections (Column 2) with projected demand in 2020 (Column 3), leads to the conclusion that by 2020 there will be:
- A slight shortage at National Framework of Qualifications (NFQ) levels 8 to 101;
- A significant shortage at NFQ levels 6 & 7; and
- Surpluses at NFQ levels 1-5 with the possibility that a large number of low-skilled individuals will be unable to find suitable employment.
In addition, Ireland’s ambition should not be to simply meet projected skills demand based on an extrapolation of current observed trends. If Ireland is to develop competitive advantage in world class skills, education and training, and transition to a knowledge economy in which skills drive innovation, productivity, and entrepreneurial activity, it requires a skills profile which substantially changes the equilibrium – skewed towards higher levels of skills attainment. Such a profile is set out in Column 5, table A.1. The challenge for Ireland is to move from the baseline ‘no policy change’ scenario set out in Column 2 to the vision of a skills profile for the new knowledge economy set out in Column 5.
Table A.1 Skills Profile of Ireland’s Labour Force – Absolute and Relative Share Grouped by NFQ level
| NFQ Level | Column 1 | Column 2 | Column 3 | Column 4 | Column 5 |
|---|---|---|---|---|---|
| Current Skills Profile (2005) | Baseline Skills Profile in 2020 based on ‘no policy change’ to Supply | Baseline Projected Demand for Skills in 2020 | Unmet Skills Needs (Column 3 less Column 2) | Vision of Skills Profile for ‘New Knowledge Economy’ in 2020 | |
| Levels 8-10 | 20% 393,000 | 28% 667,000 | 29% 681,000 | 14,000 | 32% 776,000 |
| Levels 6-7 | 12% 223,100 | 10% 233 ,000 | 16% 372,000 | 139,000 | 16% 385,000 |
| Levels 4-5 | 40% 773,600 | 44% 1,051,000 | 38% 894,000 | (157,000) | 45% 1,090,000 |
| Levels 1-3 | 28% 539,500 | 18% 450,000 | 17% 390,000 | (60,000) | 7% 180,000 |
| Total | 100% 1,929,200 | 100% 2,401,000 | 100% 2,33 7,000 | – | 100% (2,431,000) |
This requirement to enhance the skill level of the working population presents a substantial challenge as Ireland’s participation rate in continuous learning (non-formal learning) is relatively poor. Only 14 percent of 25-64 year olds in Ireland engaged in non-formal learning in 2002, compared with 16.5 percent in the EU25 and 34 .5 percent in the UK.
Ireland also ranks poorly in terms of adult literacy but evidence suggests that literacy among young people has improved in recent years.
Significant gender imbalances are apparent across all strata of Irish education, training and employment and addressing these imbalances could contribute considerably to the alleviation of the projected skills shortages.
Vision
The Expert Group proposes a vision of Ireland in 2020 in which a well-educated and highly skilled population contributes optimally to a competitive, innovation-driven, knowledge-based, participative and inclusive economy.
* The National Framework of Qualifications is explained in Section 4.0 and is illustrated in Appendix J.