Could the skills system hold the answer to Northern Ireland’s productivity problem?

In Northern Ireland we’re well-used to hearing bad economic news. What sits underneath much of this comes down to productivity – the value of what we produce by every hour of work.

In fact, productivity here is almost a fifth lower than the UK average, and whilst the UK’s productivity rates are lower than some of our key competitors, which in itself is a significant structural problem, in Northern Ireland we have some of the very worst productivity rates in Europe.

This is concerning because productivity is a crucial ingredient in increasing living standards and underpinning economic growth, so when productivity stalls across the UK, pay rates, prosperity and growth are affected too.

With automation and technological change likely to sweep across the economy in the coming years, and with Brexit looming large, finding new ways to boost productivity will be crucial to our economic future.

At the Institute for Public Policy Research (IPPR), we believe that what we call the skills system – secondary schools, colleges, apprenticeships and universities – should be at the heart of improving productivity in Northern Ireland, and in doing so deliver increased living standards and help tackle inequalities.

However, current Northern Ireland Skills Barometer research shows that many people have the wrong or inappropriate skills to meet the workforce needs of the economy. We’re producing lots of graduates, and that’s a good thing, but not always meeting the skills needs of businesses.

Equally, we’re letting many down, as too many people in Northern Ireland have no qualifications and we have too little provision available for people to reskill or upskill throughout their careers.

Even where we have skilled workers, there’s evidence we’re not using those skills very well in our economy. Instead, we have what amounts to a worrying stand-off in the Northern Ireland economy, whereby too often employees don’t seek improvements in their skills because they believe that they will not be well-used by their employer.

Equally, employers have too often avoided investing in the skills of their workforce, as the chances are their employees will not be interested in gaining new skills to contribute to their company’s performance. This needs to change.

Some of the reforms that we need to see can be done without the Northern Ireland Executive in place. Businesses and the skills system itself shouldn’t wait for the politicians to take a lead. Indeed, employers have a responsibility to their workers, and to themselves, to invest in skills to modernise the Northern Ireland economy, to take advantage of the new technologies available now and in the near future, and ultimately to boost prosperity.

However, there are also reforms which will have to wait however long it takes to bring Stormont back. This delay risks damage to the Northern Ireland economy for as long as these reforms and decisions are delayed.

Ultimately, the challenge of improving productivity rates in Northern Ireland will only be met if we can deliver a skills system that works with employers and learners to boost skill levels. It must deliver learners with skills in the areas that Northern Ireland needs and will need in the future, improve how employers use those skills, and, crucially, offer new opportunities for workers to boost their skills throughout their career. Only then will we able to move towards tackling inequalities and delivering prosperity.

Ian Williamson is a Senior Research Fellow at IPPR. Follow @IPPRScotland for updates on Twitter.