National policies on supply and demand
Many countries have a long tradition of forecasting supply and demand, but national experiences differ in terms of the periodicity, level of detail and methodology used. The main quantitative approaches are based on economic models. Most of the countries discussed in this report maintain a national system of long-term prognosis for employment by occupation (comparable to the ROA prognoses by occupation, sector and required level of education), combining forecasts for the country and regional and sectoral studies (for example prognoses on the demand for medical doctors, paramedical professionals or teachers to be used for the annual intake of new students in those areas). Although there is not a direct link, these longterm prognoses are setting the tone for subsequent policy making.
UK: The need for high level skills
Many countries have a long tradition of forecasting supply and demand, but national experiences differ in terms of the periodicity, level of detail and methodology used. The main quantitative approaches are based on economic models. Most of the countries discussed in this report maintain a national system of long-term prognosis for employment by occupation (comparable to the ROA prognoses by occupation, sector and required level of education), combining forecasts for the country and regional and sectoral studies (for example prognoses on the demand for medical doctors, paramedical professionals or teachers to be used for the annual intake of new students in those areas). Although there is not a direct link, these longterm prognoses are setting the tone for subsequent policy making.
UK: The need for high level skills
In the UK the connection between higher education and the labour market has been monitored systematically over the years, such as the Destination of Leavers from HE surveys (six months after completing their studies and the longitudinal survey 35 months after completion), several other surveys during the graduate career as well as surveys among employers what they expect from higher education (National Employer Skills survey and Employer Perspective Survey). At present the Higher Education Statistics Agency (HESA) is the official agency to collect statistics on graduate employment. Generally these studies distinguish between the formation of subject-specific understandings and the promotion of other valued skills, qualities and dispositions. These generic skills or ‘general graduateness’ as the Quality Council (HEQA) terms them, are considered important as many ‘ graduate jobs’ have been more or less indifferent to applicants’ subject of study. In this sense the British labour market differs from those in continental Europe where the relationship between field of study and the labour market is more direct. In policy terms the notion of skills dates from the Robbins report (1963) that emphasised instruction in skills suitable to play a part in the general division of labour. The skills issue (commonly measured as qualifications) has been a continuous issue and became materialised in the Sector Skills Councils responsible for approving qualifications after their development by examining boards or lead bodies from the labour market. For an understanding of current UK policies on higher education and the labour market the review by Lord Leitch in 2006 has been most influential2 . This review is set against a background of economic strength and stability in the UK, with one of the highest employment rates in the developed world. Although the UK has significantly improved the skills base with rising school and college standards and strong growth in graduate numbers, aspects of the skills base remain weaker than those in other developed economies. The report recommends and sets out a far-reaching reform agenda to become a world leader in skills by 2020.
This means increasing skills attainment at all levels and regarding higher education that more than 40% of adults are skilled to graduate level and above. Basis elements of a reform agenda are that ‘economically valuable skills’ must be delivered through a demand-led approach, facilitated by a new culture of learning, and an appetite for improved skills amongst individuals and employers. To attain these goals, the system must become more efficient, responding to market needs, and Government, employers and individuals must all engage more in skills development. The report identifies necessary institutional reforms and simplification. Recommendations particularly addressed to higher education are:
- Strengthening the employer voice on skills through creation of a new Commission for Employment and & Skills, increasing employer engagement and investment in skills (including reforming Sector Skills Councils who will approve vocational training).
- Increasing employer investment in higher level qualifications, especially in apprenticeships and in degree and postgraduate levels; significantly more training in the workplace.
The review recommends a simplified demand-led system with employers and individuals having a strong and coherent voice. In their view the role of Sector Skills Councils (mainly operating in the VET sector) should be expanded to high skills and drive up employer investment in these skills.
The review recommends widening the focus of HE targets to encompass both young people and adults via workplace delivery. It is expected that this will ‚dramatically improve engagement between HE and employers‛ (Ibid. p. 140). In a response to the Leitch review of skills, the Department for Innovation, Universities and Skills (DIUS) asked in 2009 the Higher Education Funding Council (HEFCE) to take forward work in this area. Three strands of work for the Funding Council were defined as crucial for higher education policy3 .
First, in order to build the skilled, adaptable workforce that is needed for the future, an increase in the number of students is needed. A long term target has been set that by 2020 at least 40% of the working age population should have a higher level qualification (level four or above). Increases in the current grant for teaching would allow a significant expansion with a particular focus (<) ‚on the need to increase participation in HE by underrepresented groups from all parts of the working population, to support flexible and innovative delivery models, and to offer better local access to HE in places where there is a shortage of supply‛.
Second, to accelerate progress towards a new relationship between employers and higher education. This involves increasing volumes of employer co-funding being brought to bear to support skills development. This not only means a new approach to funding, but also a need for innovation and cultural change: ‚providers will need a growing appreciation of the requirements in the workplace; to provide and adapt courses swiftly in response to demand; to offer provision tailored to individual business; and make it accessible in ways that suit employers and students‛. Third, the need to widen participation, identifying and nurturing talent so that higher education is truly available to all who have the potential to benefit from.
The Government has set a target to increase participation in HE towards 50 per cent of those aged 18 to 30. The evidence supporting policies towards higher participation levels have not explicitly been mentioned. What has fuelled this policy of increasing participation is very likely to be related to changing labour market demands, as it becomes increasingly difficult to obtain ‚good jobs‛ without a degree. Employers in England reported that around 30% of jobs already require degree-level skills and given this fact are not confident that there will be sufficient skilled people available in the future to meet their evolving skills need4 . Also the international competitiveness plays a role here. A theme in all these areas concerns the importance of science, technology, engineering and mathematics subjects (STEM subjects).
The Ministry supports pilot projects designed to raise demand for STEM among potential students and to sustain the capacity in institutions with very high cost STEM subjects. Where there is evidence of demand, the HEFCE should ensure that within available resources there are sufficient student numbers and to encourage employers to co-fund provision wherever possible.
The policy emphasis on the skills system has been continued in the White Paper ‚Skills for Sustainable growth’ (November 2010). The key issue in this paper is that the challenge higher education - although a value in itself with world-class research - faces is putting the undergraduate experience at the heart of the system. Educational opportunities should be available to many people throughout their lives in different forms: full-time and part-time; academic and vocational, whatever will help them achieve their goals at that stage of their life. In order to widen participation sufficient higher education places should be available for those qualified. A question arises about the impact on future demand and the present developing mismatch between supply and demand. Actually in the last three years the growing number of entrants to higher education has been marked by an ever faster growing number of applicants.
One of the reasons for this mismatch is the cap on numbers since 1994. Since this cap has been set at a level explicitly and significantly below demand, this has resulted in much greater levels of unsatisfied demand. Increasing the number of applicants without any formally recognised qualifications will undoubtedly put further pressure on the admittance system with the number of applicants rising more rapidly than the number of acceptances5 . It is very doubtful that the present HE system is able to absorb a larger student population. The present government is very explicit in order to meet expanded demand levels in higher education. Given the fact that public funding has to be reduced, a more cost-effective sector is to be needed if opportunity will be spread more widely. In the White Paper published in summer 2011 the Government sets out his reform policies for higher education .
The reform focuses on changes in the funding system (vouchers, i.e. - ‘funding follows the decisions of learners’) as a driver for a more responsive system. For our present discussion on labour marker and privatisation tendencies the following objectives are standing out:
The policy emphasis on the skills system has been continued in the White Paper ‚Skills for Sustainable growth’ (November 2010). The key issue in this paper is that the challenge higher education - although a value in itself with world-class research - faces is putting the undergraduate experience at the heart of the system. Educational opportunities should be available to many people throughout their lives in different forms: full-time and part-time; academic and vocational, whatever will help them achieve their goals at that stage of their life. In order to widen participation sufficient higher education places should be available for those qualified. A question arises about the impact on future demand and the present developing mismatch between supply and demand. Actually in the last three years the growing number of entrants to higher education has been marked by an ever faster growing number of applicants.
One of the reasons for this mismatch is the cap on numbers since 1994. Since this cap has been set at a level explicitly and significantly below demand, this has resulted in much greater levels of unsatisfied demand. Increasing the number of applicants without any formally recognised qualifications will undoubtedly put further pressure on the admittance system with the number of applicants rising more rapidly than the number of acceptances5 . It is very doubtful that the present HE system is able to absorb a larger student population. The present government is very explicit in order to meet expanded demand levels in higher education. Given the fact that public funding has to be reduced, a more cost-effective sector is to be needed if opportunity will be spread more widely. In the White Paper published in summer 2011 the Government sets out his reform policies for higher education .
The reform focuses on changes in the funding system (vouchers, i.e. - ‘funding follows the decisions of learners’) as a driver for a more responsive system. For our present discussion on labour marker and privatisation tendencies the following objectives are standing out:
- Moving away from the tight number controls that constrain individual HE institutions, and expanding the flexibility for employers and charities to offer sponsorship for individual places outside of student number controls ...‛ provided they do not create a cost liability for Government‛.
- Removing the regulatory barriers that are preventing a level playing field for HE providers of all types, including further education colleges and other alternative providers. They will be encouraged to offer a diverse range of higher education provision. In line with this, it will be made easier for new providers to enter the sector, including reviewing the title ‘university’. By supporting a more diverse sector with more opportunities for all kinds of courses, it is expected that this will further improve student choices.
- Asking universities to look again at how they work with business across their teaching and research activities, to promote better teaching, employer sponsorship, innovation and enterprise.
- Improving and expanding the information available to prospective students, making available much more information about individual courses at individual institutions and graduate employment prospects.