Professor Sir Anton Muscatelli, Principal and Vice-Chancellor University of Glasgow and member of the Scottish Government’s Advisory Group on Economic Recovery
The report delivered to the Scottish Government last week by the Advisory Group on Economic Recovery made many significant recommendations. But one point was particularly salient. As we emerge from the pandemic, education will be at the forefront of the recovery, with Universities a key engine for skills, growth and jobs. As was emphasised in the report, Scotland’s universities are the envy of many around the world. We must protect them, not for their own sake, but to unleash the benefits that higher education can bring to the economy and to society as we emerge from the crisis.
So what are the things we need to get right, and which wrong turns should we avoid?
First, we must align skills with new high-growth sectors. The AGER report emphasises the need to focus on key areas which will drive the economic recovery, post-COVID and post-Brexit. Central to this will be data science and tech, life sciences (including precision medicine and health technology), advanced manufacturing, quantum and nanotechnology, and the high-tech segments of the creative industries. Crucially, these require graduate and postgraduate skills and are sectors where Scotland genuinely leads the world.
Since the pandemic began, I have commented on many occasions that a resumption of economic growth will determine whether the current fiscal effort by the UK and devolved governments is affordable. The amount spent has been truly eye-watering, and nothing comparable has been seen outside of wartime. With the starting point of a much higher debt-to-GDP ratio, the problem of debt sustainability will come to haunt us unless we can engineer a rapid recovery in the next 3-5 years.
As part of this, we need to encourage the supply of graduate and postgraduate skills and in a way that get the funding model right. This is not a plea for special treatment, but an acknowledgement that all too often there have been calls to switch funding provision in higher education from a medium-term ‘funding model’ to a short-term ‘commissioning model’. That would be a mistake. Developing the highest-level skills from the world-class research base in our universities means ‘nudging’ provision into the right areas, but without the illusion that capacity can be built through the short-term commissioning of teaching provision. When we develop skills in this area in both full-time study mode and in the form of graduate or postgraduate apprenticeships, funding needs to be both aligned with employer demand but with a long-term strategic skills investment perspective – not a model that chops and change provision every year.
In positive contrast, the approach taken by the Scottish Funding Council (SFC) has sought to ensure that high-quality capacity is built over time. The AGER report emphasises the need to align provision to business demand to avoid skills mismatch. But this needs to be done in a rational way with the SFC at the centre, working with Universities to achieve better alignment.
As an example, most Universities have responded to the crisis in a very flexible way by developing online and blended provision in areas of high-skill demand through professional accredited courses designed to build specialist skills. These are provided at my own University in Glasgow and draw on our on-campus postgraduate and advanced undergraduate provision – in key areas such as Health Sciences and Management. Projecting forward, this is an area that can be developed at pace, particularly around aspects such as digital skills, which will be crucial to our economic recovery.
Within this, avoiding the scarring of unemployment for the thousands of Scottish students graduating this year will be absolutely crucial. With fewer job openings there is a clear opportunity for the Scottish Government to work with universities in expanding postgraduate provision, providing life skills to our graduates and priming the economy for jobs and growth.
Finally, it is evident that in the areas of research and innovation there is an obvious requirement for a combination of greater specialisation in the higher education sector, and far greater collaboration between institutions. The same should apply to skills. What we need now, at a time of scarce resources, is greater differentiation and specialisation, not less.
For instance, playing to the very different strengths of the further and higher education sectors will help provide the very broad spectrum of skills demand by business and industry. That is a major lesson from other education systems which emphasise the importance of creating a broad spectrum of technical and business-oriented skills (e.g. Germany, Switzerland, Singapore) for the medium-to-long term. With diverse models including apprenticeships at all levels with more traditional full-time degrees.
The COVID-19 challenge is unprecedented. Education can offer a route to recovery and can both attenuate the scarring effects of unemployment and help accelerate growth by supplying the skills Scotland needs. But the execution of a skills strategy for Scotland requires very careful judgement.
To cite this article: Muscatelli, Anton, The Importance of higher education and skills in the economic recovery, Policy Scotland, June 2020, https://policyscotland.gla.ac.uk/the-importance-of-higher-education-and-skills-in-the-economic-recovery