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Building a Smarter Economic Future
The UK Economic Development Conference 2009
7-8 October 2009
Royal Bath Hotel, Bournemouth
© The Work Foundation.
Ian Brinkley
Director Knowledge Economy
Programme
The Work Foundation
© The Work Foundation.
How bad is the recession and how fast might we recover?
© The Work Foundation.
How fast will the labour market recover?
Employment recoveries from previous recessions
pre-recesion peak of em ploym ent (1979Q4/1990Q2) = 100 Q1. Workforce jobs, UK, seasonally a djusted
1.0
1.0
index Q1=100
1.0
1.0
0.9
0.9
0.9
1980s
1990s
© The Work Foundation.
37
Q
35
Q
33
Q
31
Q
29
Q
27
Q
25
Q
23
Q
21
Q
19
Q
17
Q
15
Q
13
Q
11
Q
9
Q
7
Q
5
Q
3
Q
Q
1
0.9
A recession of the North, Midlands and Wales
Highest increases in:
• Blaenau Gwent, Wales
• Swindon, South West
• Cannock Chase, West Midlands
• Corby, East Midlands
• Kingston upon Hull, Yorkshire
Also significant rises in the core
cities outside London
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Skills key determinant of recession impact
Places with low skills being
affected the most
Places with high skills being
affected the least
Other characteristics affecting
impact:
•Employment in manufacturing
•Financial services
employment outside SE and
Greater London
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Impact of the recession (so far) on jobs Apr-June 2008 to Apr-June 2009
Recession speeds up structural change
total em ploym ent change Apr-June 2008-2009
7%
9%
84%
Manual, unskilled, admin
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Care and sales
Knowledge associated
Labour market interventions – the evidence on what works and what does not
(Brinkley, Clayton, Coats, Hutton, Overall (2008) Hard Labour TWF.
• Job search and job ready programmes by labour market intermediaries work
successfully;
• Employment and training placements with employers can be successful
provided they have “proper job” characteristics;
• Public investment projects can create some jobs, especially targeted on labour
intensive activities;
• Working time compensation schemes can be successful if temporary;
• Early retirement schemes are unsuccessful – but more young people in higher
education can be successful in the longer run;
• Public employment and training schemes are less successful;
• Tax reliefs, corporate tax cuts and hiring subsidies are less successful.
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Implications for the 2020 workforce
Workforce in 2020
33%
52%
15%
Knowledge associated jobs
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Care and sales
Manual, admin, unskilled
Knowledge economy and 1990s recession and recovery
total em ploym ent, EU KLEMs database 1990=100. KE m arket based is telecom s, high tech, business, financial, and cultural
services; KE public based is education and healthcare.
1.25
KE market based
1.20
KE public based
Manufacturing
Other Services
1.15
index 1990=100
1.10
1.05
1.00
0.95
0.90
0.85
0.80
1990
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1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Drivers of the Knowledge Economy – Now and to 2020
Drivers
Key factors
Examples
Possible changes to 2020
Demand
Consumer demand
Digital services, finance and
insurance, cultural and recreational,
private/co-financed education and
health
“high demand” society for
education, heath, cultural and
“green” services
Organisational demand
Business and financial services, high
tech, communications services,
design, brand equity, human and
organisational capital
High and growing demand for
knowledge based intangibles
Collective demand
Public education and health related
spending, cultural services,
environmental services
Public supply highly constrained
Public sector efficiency drive
Supply
General purpose
technologies
Knowledge based
intangibles
Computers, internet, lean production,
networks
R&D, software, design, brand equity,
human and organisational capital
More intensive application of
existing technologies
Low carbon technologies and
applications
Globalisation
High tech manufactures
and knowledge intensive
service exports
High skilled labour
Bigger and more diverse markets
Global production chains
Ideas, best practices and
technologies
Non-OECD “middle class”
Migration to UK more
constrained
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Conclusions and objectives for 2020
• Consumer, corporate and overseas demand for knowledge based services and high tech
goods will drive the recovery and should be encouraged where possible;
• Knowledge based market services and non public funded education and health services
will have to provide the vast majority of new jobs, so that by 2020 well over half of the
working population will be in knowledge based service industries;
• Jobs associated with the knowledge economy will be the major source of employment
growth and by 2020 will be filled by over half the workforce;
• A key objective should be to restore full employment by reducing unemployment and
employment to pre-recession levels by 2020;
• The gap in employment outcomes between the 50 per cent of the workforce in knowledge
related jobs and less well educated groups should be narrower than it is today;
• The UK in 2020 should continue to be an attractive place for high skilled migrants to help
drive the growth of the knowledge based industries;
• By 2020 the overall gap between the UK’s major cities in terms of shares of knowledge
intensive employment should be reduced, implying faster growth in some towns and cities
with low shares at present.
© The Work Foundation.
Building a Smarter Economic Future
The UK Economic Development Conference 2009
7-8 October 2009
Royal Bath Hotel, Bournemouth
© The Work Foundation.