Does England have the skills to win in the global economy?

Robert Peston
Economics editor

Woman looking at job adsImage source, PA

A comprehensive audit of skills in 24 rich countries shows that young people in England and Northern Ireland are very unusual in having worse skills than 55 to 65-year-olds, which implies that the performance of our economy may suffer in years to come.

You only have to spend a few days in Asia to see the correlation between investment in education and training on the one hand and economic performance on the other.

So the OECD's survey of the skills of 166,000 adults in 24 rich countries probably tells us quite a lot about how much richer or poorer our country will be in relation to others over the coming years and decades.

The results of the survey are not happy reading for Britons, or for Americans.

I should point out, before I go on, that the survey results relate to an assessment of just under 9,000 adults in England and Northern Ireland. So when I say "we", I don't mean the Scots and Welsh.

But let's start with the overall findings.

The proportion of adults in England and Northern Ireland with relatively sophisticated literacy skills is only a bit below the average for the 24 surveyed nations, significantly worse than for Japan, Finland, the Netherlands and Sweden, but a bit better than for Germany and the US.

And England/Northern Ireland has a big proportion of adults with some of the highest literacy scores. So when it comes to the ability to understand and draw conclusions from written texts, British people do pretty well.

But the picture is less good in numeracy. When it comes to more advanced maths, the UK is well below average, significantly worse than the performance (again) of the quartet of Japan, Finland, Sweden and the Netherlands, but (hooray perhaps) still better than the US.

Strikingly (and this is pretty good news, surely), the only area where we do better than average is in "proficiency in problem solving in technology-rich environments". We are pretty good with computers.

On this measure, we have fewer adults able to manage digital data relatively efficiently than in Scandinavia, Australia or Canada. But, amazingly, we do better than Japan - and much better than the US.

Overall, this picture is certainly not devastating for England and Northern Ireland.

But what lies underneath this result is cause for concern, because there are worrying implications about the long-term potential of the British economy (I can say Britain here, given that England is by far the most populous of our nations).

What is really striking is that England/Northern Ireland is anomalous in that our 55 to 65-year-olds are fractionally more skilled in literacy and numeracy than 16 to 24-year-olds.

Here is the OECD's chilling reflection: "England is the only country where the oldest age group has higher proficiency in both literacy and numeracy than the youngest group, after other factors, such as gender, socio-economic backgrounds and type of occupations are taken into account."

Or to put it another way, those who moan that education standards have declined in Britain are correct, according to the OECD.

This would help to explain why, since the crash and great recession of 2008, unemployment in Britain has risen much more among younger than older people.

To be clear, young people are not markedly less skilled than older people.

But that, sadly, is not really the point.

In many of the economies with which we are competing, young people are both significantly more skilled than older people in their own respective countries and also more skilled than our young people.

For example, the mean literacy score for South Korean young people is a fifth higher than for Korea's older people, and more than 10% higher than for our young people.

When it comes to problem solving with technology, 42.4% of 16 to 24-year-olds in England and Northern Ireland have middling skills, which is 21 percentage points below Korea and compares with an international average of 50.7%. Only young Americans are worse equipped.

The OECD's unsettling conclusion is that the stock of skills available in England and Northern Ireland is "bound to decline over the next decades unless significant action is taken to improve skills proficiency among people".

And if the stock of skills declines, Britain will be even less well placed than today to pay its way in the world.

Image source, PA
Image caption,
Literacy can be linked to parental reading skills

So what underlies the apparent failure in England and Northern Ireland to properly endow our young people with the skills they'll need to prosper?

Well, the OECD sees a lack of social mobility in this country as the other side of the same coin.

There is an unusually strong correlation between socio-economic background and literacy proficiency in the entire population of England and Northern Ireland. And what is even more exceptional is that the link between background and skills attainment is even greater among young people.

In other words, and unlike for most of our country's competitor nations, social mobility is worst among those aged 16 to 24.

Here is a horrible statistic. Across all countries, if your parents have low levels of education, you are five times more likely to have poor proficiency in literacy than your peers whose parents enjoyed higher levels of education. In England and Northern Ireland, the probability is eight times greater.

So the most acute failure to provide young people with skills is for those right at the bottom of the social and economic pile. If you are born in poverty in Britain, you are much more likely to stay there than for those born in pretty much any other rich economy.

Now, of course, this is where the real arguments begin.

Is our relatively poor performance in providing the young with relevant skills the result of poor teaching, the wrong syllabus or inadequate incentives for young people to better themselves?

What the OECD would argue is that where employers have more of an impact on what is taught in schools and subsequently, both skills attainment and economic performance improve.

This is not about companies bossing schools around but about a social compact between the private sector and the education system, where there is a mutual acknowledgement of the imperative of preparing younger people for the better jobs of tomorrow.

Anyway, you probably don't need telling that in the UK links between business and education are pretty informal and tenuous.

And it is unclear how far those links can be formalised and reinforced in an economy dominated by big multinationals, which see their labour force as global and where home is often a tax convenience rather than a matter of national pride.

By the way, there is one final striking result for England and Northern Ireland (which is not in the OECD's tailored note on England and Northern Ireland, but in its global evaluation).

It turns out, says the OECD, that women in England/Northern Ireland are very unusual in that they use problem-solving skills at work to a greater extent than men. But even though women can be seen to be doing more demanding jobs, men earn 15% more than them on average.

Which, some would say, doesn't seem desperately fair.