Preface

In July 2005, the Minister for Enterprise, Trade & Employment asked the Expert Group on Future Skills Needs (EGFSN) to identify the skills required for Ireland to become a competitive, innovation-driven, knowledge-based, participative and inclusive economy by 2020.

In response, the EGFSN carried out a detailed programme of research, the results of which are presented in this document. The conclusions and recommendations in this document are based on this research, and should underpin the development of a National Skills Strategy.

The document has five chapters:

Chapter 1 Introduction

Investment in education and training, through increased participation, improving the productivity of workers, and encouraging innovation, boosts economic growth and living standards. Ireland’s recent economic success was based to a significant extent on growth in labour productivity and increased participation in the labour market. World class skills, education and training have been identified in the Enterprise Strategy Group Report as an area in which Ireland can continue to develop competitive advantage in building sustainable enterprise.

Over the coming years, education and training will continue to play a significant role in ensuring the country’s economic prosperity. From a societal perspective, sustained improvement in our national educational attainment levels can also yield much broader benefits, through contributing to greater social cohesion, better public health, reduced levels of poverty and social welfare dependency and a reduction in crime rates.

Chapter 2 Changing Skills Needs

The skills requirements of the economy are not static. As the economy increases its dependence on services and high technology manufacturing, and traditional sectors decline in importance, there will be a corresponding change in the particular skills and the balance of skills needed in the economy. An analysis of skills requirements needs to take account of:

As employment in sectors such as agriculture and the manufacture of machinery continues to decline, it is areas such as ICT, medical devices, pharmaceuticals/biotechnology, food and drink, and high-value engineering that hold the potential for future growth. Services, such as finance, business and marketing, will continue to grow strongly. Managerial and professional occupations will account for more and more of our workforce in the years to 2020, while unskilled manual labour, agricultural occupations and similar occupations will account for significantly less. Clerical and craft related occupations will grow in absolute terms but their relative share of employment will decline.

Generic, transferable skills, such as literacy, numeracy, IT and people skills, will be increasingly valued; employees will be required to demonstrate flexibility and an ability to continually acquire new knowledge and skills. Employees will be required to have a greater breadth of knowledge, and the demand for higher qualifications will increase.

The shift to services also demands investment in education and training: in this sector, it is more difficult to drive productivity by investment in capital or technology; productivity increases depend largely on creativity, innovative ability and the application of knowledge.

As is expected in a rapidly developing economy, there is a tight labour market and skills shortages currently exist in several sectors of the economy, for example construction, finance, health care, engineering and IT related occupations. While multinational companies in Ireland in general appear to be satisfied with the skill level available, the availability of labour remains an issue.

In the recent past, large-scale immigration has added significantly to the supply of skilled labour. The immigrant population is characterised by high levels of educational attainment, but immigrants are often employed at levels for which they are overqualified; their potential productivity is thus not fully realised.

Among the existing labour force (and particularly in older age cohorts), a significant proportion is educated only to lower secondary level or below. Without intervention, this is self-perpetuating: low educational attainment levels are linked to low literacy levels, and low literacy levels inhibit participation in education and training.

Seen against the requirement to reskill and upskill the existing workforce, Ireland’s relatively low participation rate in continuous learning is cause for concern – at 7 percent, it lags significantly behind the EU’s Lisbon target and the best performers in Europe.

Gender imbalances are apparent across all strata of education and employment, with males underperforming relative to their female peers in second-level education. Despite this, the female participation rate in the labour force, at 52.5 percent in 2006, lags appreciably behind the male rate of 72.8 percent. Gender streaming is also evident, with more females in caring professions and teaching, and more males in engineering and construction.

Chapter 3 Investment in Education and Training

There are proven positive returns to the State, to enterprise and individuals from investment in education and training. Better trained individuals can command higher salaries, and enjoy better security of employment and job satisfaction. Their employers in general experience increased productivity that more than compensates for the higher wages.

The reluctance of many individuals to participate in education and training may be due to their lack of awareness of the benefits, or to financial constraints. The barriers are more pronounced for those with lower level skills. The State, therefore, is justified in intervening in the market for education and training at certain levels, notably at primary and post primary level and also has a role to play in encouraging participation, and in particular in supporting the low-skilled who would otherwise be unlikely to participate in education or training.

Chapter 4 Supply and Demand for Skills to 2020

In simple numerical terms, the Irish economy is likely to need 950,000 extra new workers between 2006 and 2020. This demand will be met through the young school leaving cohort (640,000) and through increased participation and continuing to attract inward migration (310,000).

In absolute terms, the demand for skills at levels 6-10 will continue to grow strongly. However, in the absence of policy change, a significant proportion of Ireland’s workforce will remain low-skilled in 2020, with their highest level of educational attainment below upper secondary level. The result will be an undersupply of skills at the higher levels, and an over-supply of those at the lower levels. This will be apparent by 2010, and will worsen considerably by 2020. The requirement will be met only by reskilling and upskilling the resident workforce and by attracting highly skilled migrants (and employing them in occupations for which they are qualified).

Chapter 5 Conclusions and Recommendations

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. Specifically, the Expert Group concludes that if Ireland is to realise this vision of a new knowledge economy which can compete effectively in the global market place, it requires enhancing the skills of the resident population, increasing participation in the workforce, and continuing to attract highly skilled migrants. Specifically, the Expert Group proposes that, by 2020:

In order to achieve these objectives, action is required at a number of levels: