Ann Watson

Ann Watson

Smart work

Ann Watson, CEO of skills experts in advanced manufacturing and engineering the Semta Group, looks at how the region can benefit from the Fourth Industrial Revolution.

The North East is a region with a proud engineering heritage and, although it is no longer the world’s leading shipbuilder, engineering still plays a critical role in the North East’s sense of identity and in its economy. Indeed, exports from the automotive sector (thanks to Nissan and its supply chain) are a key reason that the region remains the only one in England outside of London and the South East with a net positive balance of trade.

There’s no reason why engineering shouldn’t continue to be so important to the North East and there are good reasons to be optimistic about the region’s future as one of the United Kingdom’s engineering powerhouses. The Made Smarter Review, which Semta was part of, explores how UK manufacturing can maximise benefits from increasing adoption of digital technology and the Fourth Industrial Revolution. It proposes that a number of the new research centres underpinning the UK response to this revolution should be based here, which provides new opportunities for our region’s engineering companies to embrace digital engineering.

Significant investment in the region is also planned. The recently published Industrial Strategy white paper has an automotive sector Deal linked to it, meaning investment in new battery technology development in Sunderland. The Sunderland City Deal and Tees Valley Growth Deal prioritise advanced manufacturing as a sector for future growth. The government’s Northern Powerhouse initiative covers the North East and is seeing investment in the infrastructure employers will need in the digitalised future.

This investment in new digital developments and infrastructure is great news for our region. But we cannot make a success of the Industrial Strategy if we do not underpin it with a comprehensive skills strategy. This becomes even more important in the context of the UK’s impending exit from the European Union. A recent IPPR report found that the North East is actually doing relatively well to meet the skills needs of its manufacturing sector, with a below average rate of skills shortage vacancies in skilled trades occupations. But what if it becomes harder to bring in skilled workers from the EU to the North East post-Brexit?

It follows that the North East will need to look to itself to meet more of its own engineering skills needs in future. It is a concern that the region posted the steepest drop in GCSE passes in 2017, and this highlights a need for technical routes into work for those young people in the region who are not well-suited to academic learning. Several North East-based employers helped to shape Semta’s new Engineering a Qualified Workforce sector research report, making clear the value of technical qualifications in demonstrating their workforce’s competence.

The government, recognising the importance of technical qualifications, has announced the development of fifteen new T-Levels, which will be a technical equivalent to A-Levels; each will cover a broad occupational area. The new T-Level qualification in Engineering and Manufacturing, which Semta is helping to develop, is set to be introduced from 2021. The North East’s mayoral areas will benefit from having Skills Advisory Panels (their creation recently announced in the Budget) which will directly link employer need with T-Level training provision.

The running theme of government skills policy over recent years has been to encourage employers to take a leadership role. North East engineering employers have responded by getting involved in the development of new apprenticeship standards for the sector. But there is more for the region’s engineering employers to do if the North East is going to make the very most of its digital future – especially with the devolution deals in the region all having a skills element, with control over the Adult Education Budget.

A quick search of the government’s online Find an Apprenticeship Service finds a number of household names such as Atkins, Rolls-Royce and Nissan offering engineering degree apprenticeships with a digital focus in the North East. But the North East’s engineering sector is not just made up of those household names; of 7,100 engineering employers in the region, just 45 are large (with 250 plus employees). The vast majority are micro-sized enterprises of 10 people or fewer.

So it follows that any skills strategy to ensure the North East is ready for the future of engineering must focus on the needs of smaller employers too. The apprenticeship levy being paid by employers with a paybill in excess of £3m will soon be transferable to other employers (up to 10% of the total). So this is one way the North East’s automotive, rail, renewables and other key engineering sub-sectors could support their regional supply chains to recruit and invest in apprentices. The T-Levels will include a high-quality three month work placement, and the region’s engineering supply chain could boost its pipeline of young potential recruits by offering some of these placements.

The skills system changes may seem daunting but they offer great opportunities to North East engineering employers. If you’re not sure where to start, our experts can help you every step of the way, from developing a skills strategy to recruiting and delivering apprenticeships.

Crucially, we can also help you to assess your future workforce skills needs based on how your business is expected to grow – and we can help you to prepare to meet the skills challenges of the Fourth Industrial Revolution head on.

For skills and apprenticeship support and guidance, contact Semta on 0845 643 9001
or email