The skills of a city’s population are the strongest predictor of its economic performance: places with a more skilled workforce tend to have higher wages and be more productive. This is because high-knowledge businesses tend to invest and create jobs in places where they can recruit the workforce they need. As the UK economy continues to specialise in knowledge-intensive activities, the availability of high-skilled workers in a place will be crucial to its economic success. And in a period of stagnant wages and low productivity growth, improving the skills of the population is a priority.
This report, supported by ISG, looks at Birmingham’s skills profile and the implications for its economy.
It finds that skills represent a challenge for the local economy. Birmingham has the highest share of people with no qualifications of any UK city, and a lower share of people with high-level qualifications than the national average. And this seems to particularly be an issue for those in the 50-64 age group, who are less likely to hold a degree and more likely to have no qualifications than the rest of the working age population. This makes the city relatively less attractive to businesses, particularly knowledge-intensive ones. And as a result of these skills patterns, the city has a lower employment rate and a higher share of low-skilled jobs than the national average.
Addressing this skills challenge should be a priority and West Midlands Mayor Andy Street is right in putting this issue at the top of his agenda. This report explores different ways the skills picture can be improved.