THE lack of a skilled workforce is a barrier to growth in Northern Ireland according to a new economic report.
The latest NERI (Nevin Economic Research Institute) quarterly index argues that the north is trapped in a 'Low Skills Equilibrium' - a situation where firms are predominantly engaged in low value production providing low skilled and consequently low paid jobs. As a result firms that may want to innovate and grow lack the
higher skilled workforce to do so.
The research outlines that the proportion of people with no qualifications in Northern Ireland is almost double that of Britain, but argues a lack of supply is not the only issue, with the demand for skills of equal concern. "It is argued that the underperformance in the supply of skills is likely driven by a lack of demand for skills and vice versa," the report states.
Workers in the north have also been found to have less ambition towards improving their skills and this is matched by employers according to the research.
The authors of the report suggest that coordination within the economy to match the efforts of both firms and workers is key to solving the problem of a Low Skills Equilibrium.
"Policy should aim to build on existing examples of coordination at the microlevel, such as collective agreements within firms where skills investment is planned by both the employer and employees. The success of such arrangements should be used as a framework to broaden upskilling to other sectors and industries in the economy," the report says.
NERI senior economist Paul Mac Flynn said the issue of skills has been central to discussions of the Northern Ireland economy for many years and action must now be taken to tackle the issue.
"We need a change in economic policy which seeks to coordinate the efforts of firms and workers in order to free the economy from its current predicament.”
NERI Director, Dr Tom Healy, added: “The shortfall in key skills is a problem in many indigenous enterprises in both parts of Ireland. There is an urgent need for public policy to invest in raising skills and shift the long-term profile of demand for skills as part of an enterprise/industrial strategy to reboot the domestic economy."
