The ‘Made Smarter’ review: a road to utopia or dystopia in negotiating the future of skills, apprenticeships and work?

By Maisie Roberts, CERIC Postgraduate Researcher

pandora's box

Junge, A. 2005. Pandora’s Box #1: Found Toolbox with Neon

The future of work: dystopia or utopia?

The recent industry-led independent Made Smarter review chaired by Professor Jurgen Maier, CEO of Siemens, provides a future vision of the UK’s industrial landscape in terms of advancing the remit of digital technology. Training and upskilling are central components of achieving a utopian future vision. However, the future of work seems to hinge on Maier’s warning (2017: 11):

“Get it wrong, and we risk further de-industrialising our economy, and becoming ever more reliant on imports. Get it right, and we will have found the key to rebalancing and strengthening our economy, creating many new, exciting, and well-paid jobs, and leading a renaissance for the UK as a true nation of creators and makers.”

From this perspective, the future of work remains a highly contested point of discussion, centred on two extremes, which either seem to epitomise a utopian land of promise or a scaremongering nightmarish dystopia. Indeed, when we think of the future of work we conjure up rather dystopian images of the superiority of artificial intelligence-driven robots who have the power and skill to take over the whole spectrum of work, leaving us without any hope of meaningful work. Precarious employment contracts, disposable workforces, intensified working hours and minimal employment rights are already a sad reality. Beyond this the underworld of Silicon Valley casts an unsettling shadow over society where our digital footprints are tracked, extradited and sold to feed a dystopian-like machine. Has Pandora’s box been opened with no return? And what’s the alternative?

 Trouble in utopia?  Skills and the fourth industrial revolution

 Currently, technology, innovation and digitalisation are key incentives for national economies and skills and training are viewed as essential in achieving aptitude in this area. Economies are revising their technologies and capabilities in line with this so-called ‘fourth industrial revolution’.

The first revolution used water and steam to power production whilst the second relied on electric power for mass production. The third drew on information technology to create automated production lines. The fourth builds on the foundations of the third, but merges physical, digital and biological realms to create new technologies. Amongst other emerging phenomena this includes the rise of big data and the Internet of Things, where cyber-physical systems communicate and exchange data with each other and with humans in real-time.

The process of creating a commodity has therefore changed from one where manual work would physically create a product from raw materials to one where technological and information-led networks shape new “modes of development” in an increasingly globalised context (Castells, 1996). This presents the question whether the nature of skill is changing under this new guise of capitalism underpinned by the “information age”.

This might mean that new skills are needed to navigate between raw materials and new technology, data and software, changing existing job structures as well as creating new jobs altogether. Here, skill is therefore essential to facilitate technological advancement. Indeed the World Economic Forum (2016) calls for complex problem-solving, creativity, critical thinking and teamwork amongst other skills, which are viewed as essential in navigating us into a utopian future of the fourth industrial revolution.

Conversely, there could be a move to the growing but rather dystopian phenomena of a so-called ‘lights out’ methodology. Under this approach, human labour becomes obsolete as factories become solely operated via automation with the ‘lights out’ to save on production costs, increase profit margins and respond to increased customer demand. Frey and Osbourne’s (2013) infamous paper, which estimates that 47% of all US employment is susceptible to computerisation certainly plays to this analogy.

Uncertainty ahead: The case of Germany and England

The fourth industrial revolution still remains very much a future vision, and one, which is not yet fully realised. How skills strategy integrates into the future vision of work remains uncertain as demonstrated by Germany and England.

Germany

The ‘dual’ German apprenticeship system adopts a corporatist and coordinated approach, in which both firms and vocational schools provide highly structured training (Bosch, 2010). Apprenticeships are protected from market forces in an almost utopian enclave where unions, chambers, employers and the state work collectively and pro-actively together to regulate the future path of the system.

Although Germany seems to epitomise a perfect apprenticeship system, it, too, is facing significant challenges. Previously up to 75% of young people would typically undertake an apprenticeship (Grugulis, 2007) but since 2013 university starts has overtaken apprenticeship starts and this number is rising (BMBF, 2016). Higher education is becoming a more popular option, much like the UK, with the promise of a free university education and higher graduate wages a key incentive for this choice.

Equally, the entire context and character of Germany’s labour market has changed too with the implementation of the Hartz reforms over 10 years ago, which brought in temporary, agency or so-called ‘mini’ jobs as well as cuts in unemployment welfare assistance. The traditional purpose of an apprenticeship was to provide comprehensive training to catapult an individual into a secure and permanent occupation for life. Yet the evolving fragmentation of Germany’s labour market could undermine the stability, time and effort required to develop well- defined routes to employment.

Germany’s pro-active strategy of “re-imagining work” through its “Work 4.0” concept highlighted in its initial green paper (2015), followed up by its white paper (2017) aims to tackle some of these issues. The reports highlight the need for occupational profiles to be adapted to meet changing skill demands, increasing continuing vocational training, more support for SMEs to develop training and a monitoring system to forecast future demand of skilled labour. The decreasing labour supply of young people is mentioned and as such the report calls for the opening up of skilled labour to more migrants, low-skilled workers, women, older people and disabled people. However, the reports do not seem to directly address the growing prevalence of higher education, which many have argued is leading to growing inequality and a reduction of firms participating (Thelen and Busemeyer, 2012). The future of apprenticeships therefore remains somewhat ambiguous in the Work 4.0 agenda.

England

England’s system is voluntarist and employer-led, with employers solely designing, regulating and managing the system. England lacks the collective ethos and stability of the German system. The English system is also prone to continuous political upheaval, particularly since the Thatcher years where participation in apprenticeships drastically declined (Gospel, 1995).

An apprenticeship levy was introduced in April this year with the aim to increase apprenticeship participation to 3 million apprenticeships by 2020. The levy targets employers with a pay bill over £3million, affecting 2% of firms. However, recent reports highlight that since the levy apprenticeship starts have decreased by 59% (BBC, 2017). Equally, only half of the eligible levy firms have actually registered to reclaim levy funds (CIPD, 2017). This suggests that many firms are disregarding the levy as a tax instead of a social responsibility to invest in apprenticeships. Hence, although the levy has good intentions, perhaps the inherently market-led nature of England’s economy deters employers from investing in the costs and time needed to create high quality apprenticeships.

The recent industrial strategy aims to reform the UK’s technical education system to make it more internationally competitive, invest £406m in STEM skills and create a new National Retraining Scheme to allow people reskill in the labour market. Much like the recent Made Smarter review, training and skills exemplify the road to utopia in the policy discourse. However, UK’s intermediate skills ranking is projected to stand at only 28th of 33 OECD countries by 2020 (UKCES, 2015) and its productivity figures were recently downgraded from the predicted 2% growth for this year down to 1.5%, soon to be followed by 1.3% in 2019 (OBR, 2017), the same rate as during financial crisis.

The Made Smarter review focuses in on these challenges. Firstly, it argues that lack of effective national leadership and cross-sector collaboration has failed to achieve a coherent strategy of industrial digitalisation. Secondly, poor productivity, limited business support, cybersecurity threats and significant skills shortages due to the fragmented apprenticeship system leads to poor levels of adoption of the digitalisation agenda, particularly among SMEs. Finally, the UK’s infrastructure does not support the scaling-up of technology to support companies, meaning that innovation is under-leveraged. As such, the need for training is paramount in the report, which calls for the upskilling of a million industrial workers. Yet the current employer-led approach to apprenticeships in England, where the nature of the market dictates its future, contrasts to this utopian image.

Summing up

 Utopia, true to its definition as both a no-place and a good place, is a useful framing device, which helps us consider what we might want for ourselves in our future society. The Made Smarter review offers us two very different future outcomes, one with new, exciting and well-paid jobs, creating a society of creators and makers, or, an alternative route towards a de-industrialised, stagnant and import-reliant society. Juergen Maier clearly acknowledges that the UK faces a number of challenges in creating his future vision of industry and employment, including poor productivity and infrastructure. Lack of coordination, leadership and collaboration amongst businesses, academia and other institutions are also listed as central concerns.  Interestingly, Germany’s “re-imagining work” white paper actively engaged in a public dialogue and called upon workers, businesses, unions and other institutions to help contribute to the future vision of work in partnership together. This helped to ease the mystery behind the notion of digitalisation and its implications on work, whilst providing a voice for all in navigating towards a collective vision of the future world of work.

From this perspective, we need to ask what skills and work we really value in society today. Apprenticeships, training and skills development can clearly provide increased national productivity, innovation and meaningful job creation if implemented correctly (Finegold and Soskice, 1989). Yet apprenticeships are too often considered as a magical tool to swiftly solve all of society’s problems, such as youth unemployment, deepening skills gaps and productivity slumps to name a few (Keep and Mayhew, 2010), without much consideration of what is actually needed to secure these essentially utopian benefits. If we truly admire the inherent value of skills and apprenticeships as a means to meaningful and productive employment for society, more weight, investment, regulation and prestige needs to be placed on them.

References

BBC. 2017. Apprenticeship numbers fall by 59% after levy imposed. [Accessed 1 November 2017]. Available from: http://www.bbc.co.uk/news/business-42092171

BMBF (Bundesministerium für Bildung und Forschung). 2016. Report on Vocational Education and Training 2016. [Online]. [No Place]: Federal Ministry of Education and Research. [Accessed 1 November 2017]. Available from: https://www.bmbf.de/pub/Berufsbildungsbericht_2016_eng.pdf

Castells, M. 1996. The Rise of the Network Society, 2nd ed. Oxford: Blackwell Publishers.

CIPD. 2017. Half of Eligible businesses register to reclaim apprenticeship levy funds. [Online] [Accessed 1 November 2017]. Available from:  http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2017/10/09/half-of-eligible-businesses-register-to-reclaim-apprenticeship-levy-funds.aspx

Department for Business, Energy and Industrial Strategy. 2017. Made Smarter. Review 2017. [Online] [Accessed 1 November 2017]. London: Department for Business, Energy and Industrial Strategy. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/655570/20171027_MadeSmarter_FINAL_DIGITAL.pdf

Department for Business, Energy and Industrial Strategy. 2017. Industrial Strategy: building a Britain fit for the future. [Online] [Accessed 1 November 2017]. London: Department for Business, Energy and Industrial Strategy. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/664563/industrial-strategy-white-paper-web-ready-version.pdf

Federal Institute for Labour and Social Affairs. 2017. Re-Imagining Work, White paper, Work 4.0. [Online] [Accessed 1 November 2017]. Berlin: Federal Institute for Labour and Social Affairs. Available from: http://www.bmas.de/SharedDocs/Downloads/EN/PDF-Publikationen/a883-white-paper.pdf?__blob=publicationFile&v=3

Federal Institute for Labour and Social Affairs. 2015. Re-Imagining Work, Green paper, Work 4.0. [Online] [Accessed 1 November 2017]. Berlin: Federal Institute for Labour and Social Affairs. Available from: http://www.bmas.de/SharedDocs/Downloads/DE/PDF-Publikationen/arbeiten-4-0-green-paper.pdf;jsessionid=FFFC52E6F5D81905E8B5D4EE90F3E69C?__blob=publicationFile&v=2

Finegold, D. and Soskice, D. 1988. The Failure of Training in Britain: Analysis and Prescription, Oxford Review of Economic Policy, 4(3), pp. 21-53.

Frey, C, B. and Osbourne, M. 2013. The Future of Employment: How Susceptible are Jobs to Computerisation? Technological Forecasting and Social Change, 114, pp. 254-280

Gospel, H. 1995. The Decline of Apprenticeship Training in Britain, Industrial Relations Journal, 26(1), pp. 32-44.

Grugulis, I. 2007. Skills, Training and Human Resource Development: A Critical Text. Basingstoke: Palgrave Macmillan.

Junge, A. 2005. Pandora’s Box #1: Found Toolbox with Neon [Online] [Accessed 1 November 2017]. Available from:  http://www.jungeart.com/assemb/photo_display.php?start=4

Keep, E, and Mayhew, K. 2010. Moving beyond skills as a social and economic panacea, Work, Employment and Society, 24(3), pp. 565-577.

OBR (Office for Budget Responsibility). 2017. Economic Fiscal Outlook. [Accessed 1 November 2017]. Available from: http://cdn.budgetresponsibility.org.uk/Nov2017EFOwebversion-2.pdf

Thelen, K. and Busemeyer, M. 2012. Institutional Change in German Vocational Training: From Collectivism toward Segmentalism. In: Busemeyer, M. and Trampusch, C, eds. The Political Economy of Collective Skill Formation. Oxford: Oxford University Press. Pp. 68-100.

UKCES. 2015. UK Skills Levels and International Competitiveness 2014. [Online] [Accessed 1 November 2017]. Available from:  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/470017/skill_levels_2014.pdf

World Economic Forum, 2016. The 10 skills you need to thrive in the Fourth Industrial Revolution. [Online] [Accessed 1 November 2017]. Available from: https://www.weforum.org/agenda/2016/01/the-10-skills-you-need-to-thrive-in-the-fourth-industrial-revolution/

 

 

 

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