Why skills should be the primary focus of any industrial strategy

Cities need to enlarge the skilled labour pool that they offer to businesses.

Skills is one of the best economic predictors of economic performance as high-skilled business invest where they can recruit the workforce they need. Cities that are struggling need to enlarge the skilled labour pool that they offer to businesses, which can be achieved through both skills and transport policy.

This briefing forms part of our series on the industrial strategy and shows how it is predominantly skills levels, which can support and determine the economic performance of cities around the country. The five charts in the briefing show that a higher share of high, graduate level, skills in cities, is positively correlated with wages and productivity – while the opposite is shown for cities with fewer high skilled people.

For policy to better support skills levels in weaker performing cities, working with local partners such as housing associations – many of which are already developing skills and employment support programmes – can be an effective way of improving local skills levels for those with low or no qualifications. Apprenticeships are also a well established way of supporting this, and ensuring that cities can be at the heart of connecting local businesses to available apprentices will be key to making this work.

Transport can also be an effective way to support skills policy in cities, because it connects more people to the available jobs. Ensuring strong connections within cities to employment centres will better link up people in neighbouring and hinterland areas of cities to the available opportunities.

Share of degree holders living in and around English cities

Figure 1: Share of degree holders living in and around cities