Annual Business Inquiry reports, part one

Technorati tags: labour market information,statistics,UK economy

The Stats Office have issued the provisional results from the Annual Business Inquiry (the survey of employment and accounting information from businesses) for 2004 today.

Industries covered included construction, manufacturing and the service industries.

Construction overall turnover was up in 2004, from £152.2bn to £158bn, and service industries up hugely from £670.6bn to £756.2bn. But interestingly, production and manufacturing was actually up as well, from £526.3bn to £552.7bn. However, whilst the report makes play of the increases in production, no figures are given for manufacturing, which rings alarm bells, other than to note that the textile industry lost 17.9% of gross value in 2004, and the leather industry lost 14.8% of value.

So, service is king - but we already knew that.

Business to fund less university research?

Tags: higher education,research,university

The Council for Industry and Higher Education have just released their interim report on how UK HE can meet international business demand, and what effect this might have on investment.

Setting aside the extremely valid, but often-dodged question about whether university research departments really ought to be about providing industry with research that they do not want to do at their own facilities, then the interim conclusions are somewhat worrying.

After a period of steady increase in funding from 1992 to 2001, business investment in research has remained, as the report says, 'relatively static', which, of course, actually means it has fallen.

The CIHE suggests that the UK may have to go towards forms of research that do not necessary provide immediate returns, but which try to anticipate the future, or which address more fundamental issues. They also suggest that the UK may need to be prepared to do more research on very near-market applications that may be very heavily commercial in nature.

As The Lambert Review also stated, the report acknowledges how important the pharmaceutical industry to research funding in this country, and notes that increasing R&D spend is being diverted outside the UK, and, indeed, the EU to China and India, which have large numbers of skilled, cheap scientists and less regulation that even the notoriously regulation-light UK.
Currently, over 50% of all R&D money from business to universities comes from the pharmaceutical industry, and from a small number of large companies all based outside the UK. When the pharmaceutical industry goes through tough times, such as now, R&D spending is one of the first things to go - as it did in the early 90s. Ironically, that cut is one of the key reasons why the industry is suffering the problems that it is, but that is a separate issue.

UK universities need to diversify. Too much reliance on such a small group of funders is not healthy, and unless they find new ways of raising money and new fields of research, the necessary adjustment will be brutal and forced upon the sector. One excellent way is proposed in this report, and that is to be much more effective in engaging with the small and medium sized enterprises (SMEs) that drive innovation and growth.

The full report is due to deliver next year - watch with interest.

It is now out - read about it here - May 2006

New Graduate Job Options?

It's been far too long since we had a newspaper article telling us that we've too many graduates and that everyone ought to become electricians instead, so thanks to the Guardian, and to the Louise Tickle for this article from Saturday. Tickle writes interesting articles, and this is no exception, but I do have my reservations....

Buried in the piece, is the extremely interesting and sensible message put forward by Andy Powell of Edge (beware, Flash website), that it's foolish to see manual or vocational careers as second best for graduates, but it dilutes this excellent point by holding on to the 'too many graduates, not enough jobs' message.

Then we go to Iain Macdonald at the Electrical Contractors Association, who informs us that 'an apprentice electrician....will enter the job market on around £17,000. By the end of the first year, as a qualified apprentice, they will be on £22,000-£25,000."

So an electrician starts on just around the average going rate for a new graduate (£17,029, which covers all jobs), and then go on to what is, on the face of it, a pretty healthy wage. So why not rush out and become electricians? Good question. Because, as always, there's more to it than that.

According to the ASHE, the Annual Survey of Hours and Earnings, from the government, the median salary for someone in 'Skilled metal and electrical trades' in 2005 was £23,238 (you need Acrobat and Excel to get this link to work. Or you can just trust me). But isn't that supposed to be the salary they earn after just one year? No denying that it's a pretty decent salary, though.

But how does that compare with the average graduate salary? Well, let's be kind to the electricians, and look at the same survey, and look at the lowest earning category that contains mainly graduates - the "Associate professional and technical occupations". Median salary is £24,048, which rises to £26,247 for full time employees. That's because in these jobs, loads of people can work part-time- if they have a family, say. For your skilled metal and electrical workers, just 4.6% work part time - keeping that median salary high, whilst 19.6% of associate professionals do. So not only do you get paid more, but you can work more flexibly.

And it takes 2, count them, 2 graduates who have chosen to enter an industry that is currently in vogue (there haven't been too many Shakespeare adaptations set in a firm of civil engineers on BBC2 recently), claims that the restaurant industry has "job security", which must be exciting news for all those casual workers, and attempts to build a trend out of it. This is a bugbear for people like me who prefer data to anecdotes when we want to demonstrate to lots of people (like, say, a quarter of a million graduates) the pros and cons of different choices.

So the key point is that graduates have more options than what are largely regarded as 'standard' graduate jobs, and that these jobs shouldn't be regarded as second rate.

But the way it is initially put across looks rather negative, and it is rather selective about what is presented and is not stated. I hope readers take the sensible message from the piece and don't just read it as a 'going to university is a waste of time' article.

Open Access Journals, Slight Return

So, it seems that BioMed Central, commercial publishers of open access journals, were behind the letter mentioned in my last post, and the Royal Society are not best pleased.

BioMed state that it was a response to scientists upset by the Royal Society's position, and that all they did was help Fellows of the Royal Society write to the Royal Society. The Royal Society themselves say they're in favour of open access in principle, but not in a way that kills regular journals.

The Guardian covers this development here.

It's unfortunate that the Fellows' position does seem to be undermined by the input of an organisation that stands to materially gain if their side gets the upper hand. I think the Royal Society have good reason to be concerned about the way this has been conducted, and I hope that they don't use this as justification to pull out of the debate.

Open Access Journals

Last week, the Royal Society issued a statement outlining its disquiet at the drive, led by the Research Councils UK, for open access journals.

Essentially, the Royal Society is concerned that the movement is motivated in part by the desire for some of the participants to see profit-making journals go out of business. They acknowledge that some journal companies do make a lot of money, but also point out that to produce a journal to the standards that the scientific community demands, money has to be spent. They also state, with justification, that the financial model upon which the current proposal rest is not clearly stated and has not been tested, and that, in all, they feel that everything's moving a bit too quickly.

This has now upset a group of very eminent scientists, who have reproved the Royal Society for dragging their feet (and created a website just to do it).

So, on the one hand, you have the Royal Society, and the other you have the research councils, backed by the Wellcome Trust, with what looks to be an excellent idea. Neither side are anyone's idea of bad guys, but I think the Royal Society are perhaps being a bit too cautious on this one. I believe that they will be brought on side eventually and we can hopefully get some good, independent, open access journals that are run for the benefit of scientists rather than publishing companies.

The Leitch Review

Today saw the publication of the interim report from the Leitch Review.

Sandy Leitch is chairman of the National Employment Panel and formerly a chief executive of Zurich Financial Services, and he was commissioned by the Government to "identify the UK’s optimal skills mix in 2020 to maximise economic growth, productivity and social justice, and to consider the policy implications of achieving the level of change required."

The report states that if the Government meets its current skills targets, by 2020, the proportion of working age adults with a degree will have risen from 27% to 38%, and the result will be an increase in productivity growth by 0.2% per year - or about £3bn a year.

Whilst much of the report is concerned with the challenge of imparting skills to low-skilled workers, Leitch makes a number of interesting points about the graduate issue. He points out that the US, Canada and Japan all have a higher proportion of working age adults with degrees than the UK, and that China and India produce, between them, 4,000,000 graduates a year, compared to our 250,000.
He cites research from the US that suggests that the presence of people with university degrees in an area results in an increase in average salaries of people without degree. The clear conclusion is that it is vital for the UK's long-term economic health that we continue to produce more graduates - and Leitch makes the point that the increased supply of graduates has not had a detrimental effect on their salaries - therefore the market is not, as is often claimed, saturated with degree-holders.

There's also a good deal of interesting information about productivity (we're less productive per hour than France or Germany, and only stay ahead on productivity measures by working longer), and about the demographic slump we will enjoy in a few years, when the number of people between 20 and 35 will drop. Another very interesting point is that we have the most unequal regional wealth distribution in western Europe, with the exception of Belgium - and it constrains economic growth by denying some people the opportunity to contribute effectively to the economy.

The Leitch Review will deliver the final report in 2006.

Student loan information 'should be shared'

Interesting suggestion from internet bank Egg,who have called for debt information from the Student Loan Company to be made available to lenders.

At the core of this are two issues. Firstly, of course, is the fact that lenders want to make a great deal of money and don't really care who from. But educated people who are likely to be able to pay it back are an excellent risk.

The second, and unspoken in this article, is that the SLC is actually a fully-fledged charity, and is therefore bound by certain codes of conduct. The SLC is also keen to be seen to do the right thing, and Egg are probably aware of that.

I'm not quite sure about the statement, "It is in everyone's interest for banks (to) make the best lending decisions and to do this they need to be aware of a customer's existing financial position." since it seems that some parties (ie the banks) benefit rather more than others.

Of course, this information is unlikely to make it to financial institutions just yet, since it's without question that there are profound data protection issues. Which graduates would be delighted that all current existing banks should be fully aware of their debts to the SLC? That is also likely to produce a bit of resistance. Would the knowledge that all of their debt (and repayments - and so income details) would be available to all banks put graduates off taking out student loans?