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            Why STEM Skills are Vital to the UK Economy

            30th November 2022

            In order to reshape its economy around high value, knowledge-intensive activities within an increasingly competitive global economy, the UK must meet the growing demand for people equipped with higher level, economically valuable skills. Ensuring that businesses have access to science, technology, engineering and mathematics (STEM) skills is critically important since these are key to developing innovative products and services that can be effectively positioned in world markets.

            Research by the Royal Academy of Engineering has revealed that the UK is an engineering powerhouse, with the profession generating up to an estimated £645bn GVA to the UK’s economy annually – equivalent to 32% of the country’s economic output with the wider definition of STEM likely adding significantly more. However, recent research by the IMECHE suggests current shortages of STEM skills is leading businesses having to spend more than £1.5bn annually to cover increased costs of training, recruiting and temporary staff costs. So where are opportunities to close the gap with current and future jobs?

            STEM skills adapt to and provide solutions to the fundamental trends that are shaping the global economy and importantly the future of work:

            • Converging Technologies and Cross-Disciplinary Skills. A key implication of this trend is that highly skilled workers with a background in STEM increasingly need to work in multi-disciplinary teams to address business objectives. For instance, an industrial robot is an example of a mechatronics system in which principles of mechanics, electronics and computing are combined. The convergence of technologies can disrupt existing business models, but also create completely new markets.
            • Digitalisation of Production. The digitalisation of production increases the demand for engineers specialised in both the development and the implementation of high-tech manufacturing. The higher level of technology integration requires employees to have relevant skills, including skills in design, simulation and data analytics. There is likely to be continued need for (up-skilled) technicians to manage automated production systems. In the UK, near-shoring and decentralised production could lead to employment increases in manufacturing of between 100,000 and 200,000 workers by 2023.
            • ICT Development and ‘Big Data’. Increasing demand is expected for data management, analysis and visualisation skills as the amount of data transferred, collected, and stored increases exponentially. Turning data into insight that increases the efficiency of existing business and generates ideas for new business opportunities. There is a particularly high demand for STEM cyber security and digital forensic skills.
            • New Business Ecosystems. The manufacturing sector in the UK will be challenged to upgrade its innovation capacity in response to global competition. This is likely to mean a continued transformation of manufacturing to a highly sophisticated industrial sector where high-skilled engineers are increasingly in demand. Under these emerging business models processes of so-called open innovation become more important. For STEM workers who are core to the innovation process, teamwork in virtual teams, across businesses, functions and organisations, is growing in importance.
            • Growing Scarcity of Natural Resources and Degradation of Ecosystems. An increased focus on reducing carbon emissions and energy consumption has led to a growing demand for skills in material and resource efficiency, particularly in engineering and design and affects all sectors.
            • Changing Work Environments. Engineers have seen a move from working on-site to working remotely. This translates the physical world into a digital one and allows engineers to operate in a virtual environment. For example, in the case of equipment on oil platforms, due to remote control an engineer is often not required to go to the site when a problem occurs, because it can be fixed remotely with less downtime.

            STEM skills are vital to UK economy for growth, development and emerging markets; for big data understanding, security; and material and resource efficiency. STEM skillsets provide important innovative solutions to previously unanswered questions about productivity, health and providing a sustainable future for the UK.

            MD Comment

            For decades the common view of STEM skills contribution to the UK economy is that it has been on decline. That may well have been the case in the 70’s and 80’s however since the digital age, “came of age” in the 90’s and in parallel the UK slowly re-shaped it’s engineering and manufacturing base to focus on higher value products the new dawn for the STEM sector is well and truly upon us. To compete globally and take advantage of the huge opportunities that exist for UK PLC requires improvements in many areas none more so than the training, development and career long support of those developing their careers with STEM skills.

            Posted by Mike Gorshkov

            Managing Director at Linea Resourcing

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