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.
Policy and Research Manager