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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Contents

Executive Summary

The Emerging Technology Sector Skills Plan

Context for Emerging Technology

Impact of Emerging Technology in New Anglia

Consultation Feedback

Emerging Technology Skills Plan

Skills Actions to be Taken

Action 1 - ICT and Digital in the Local Industrial Strategy

Action 2 - Train Young People to be Industry 4.0 Professionals

Action 3 - Upskill existing Industry 4.0 workforce

Action 4 - Integrate Industry 4.0 awareness into all courses at school/FE/HE

Action 5 - Upskill existing sectors workforce to adopt Industry 4.0

Annex 1 - Background to the Emerging Technology Challenge

What is Industry 4.0?

Impact across the Economy

The Evidence Base

International Reports

EU Report and Initiatives

National Reports

Regional Reports

Annex 2 - New Anglia Sector Skills Plans & the Adoption of Emerging Technology

Digital Tech

Life Sciences and the Bio-economy

Advanced Manufacturing and Engineering

Agri Food Tech

Energy

Ports and Logistics

Financial and Insurance Services

Cultural Sector

Skills Needs in Construction and Health and Social Care

Future work on Digital Creative and Education sectors

The Retail Sector

Annex 3 - Common Themes on Emerging Technology in the Sector Skills Plans

Annex 4 - Consultees

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Executive Summary

The development of emerging technology or Industry 4.0, based on digital and

engineering technologies, is leading to major changes in large sectors of the

economy. The obvious example is retail and distribution, where online sales now

represents £1 in every £5 of the sector. Not surprisingly we are seeing jobs

displaced from the traditional retail sector and many established retail companies

failing whilst new online only companies emerge.

Reports suggest that 30% of current job roles in New Anglia, could be lost or change

fundamentally and many more will need new skills as digitalisation and automation

impactson both public and private sectors. Allaying fears, the rebalancing of jobs

towards higher skills presents a real opportunity for upskilling and lifelong learning.

However, the Industry 4.0 revolution is occurring at a time of historically low

unemployment, with the dependency ratio rising and most employers struggling to

secure the workforce needed. The local economy will also be able to expand if it is

nationally and internationally competitive. If New Anglia is World class in its adoption

of Industry 4.0, the productivity benefits this brings will lead to economic growth,

more higher paid, higher skilled jobs and enough jobs for everyone.

The technology supply sector is anticipated to grow as the demand for Industry 4.0

solutions grow offsetting some of the jobs displaced in other sectors. Job creation

will though not be limited to the technology sector, with new jobs and job roles

created right across the economy as Industry 4.0 facilitates the creation of new

products and services, improves competitiveness and enables new job roles.

Skills is an essential enabler of this transition. Whilst new skills will be needed in the

companies supplying Industry 4.0 solutions, in terms of scale, the bigger opportunity

is in ensuring that the 90%+ of the economy which is an end user of Industry 4.0

technologies has the skills to be expert in using Industry 4.0 to increase productivity.

The scale and speed with which job roles will change means that the transition to

Industry 4.0 will require a substantial increase in retraining for the existing workforce.

Given the focus in the New Anglia Local Industrial Strategy on digitalisation,

addressing the implications of Industry 4.0 should be a strategic priority for the LEP.

Action is needed in 4 main areas to deliver on the potential of Industry 4.0:

• Increasing student supply into the technology sector with Industry 4.0 skills;

• Upskilling the technology workforce to spearhead adoption of Industry 4.0;

• Ensuring all students, regardless of sector, have Industry 4.0 in their courses;

• Upskilling and retraining the existing workforce in end user sectors for new or

changed job roles enabled by Industry 4.0.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

The Emerging Technology Sector Skills Plan

The Emerging Technology Sector Skills Plan has been developed by Norfolk and

Suffolk, working alongside the New Anglia Local Enterprise Partnership, the New

Anglia Skills Board and supported by SkillsReach.

SkillsReach was contracted to facilitate and prepare sector skills plans for the New

Anglia LEP priority sectors. The project was commissioned by the Education and

Skills Funding Agency, in partnership with New Anglia LEP, and funded through the

European Social Fund. Each Sector Skills plan and supporting Data Pack has been

developed in collaboration with local employers and other stakeholders.

The New Anglia Skills Board places employers at the centre of decision making on

skills in Norfolk and Suffolk to ensure the skills system becomes more responsive to

the needs of employers, and the future economy.

Whilst there is currently not a formal industry led sector group for Emerging

Technologies which covers the whole of New Anglia, there are a range of bodies

such as the Institute of Productivity (IoP) and proposed Eastern Institute of

Technology (EIoT), which focus on and represent the stakeholder community.

SkillsReach is an established East of England-based strategic skills consultancy with

an associate project team with extensive experience of developing skills plans.

Acknowledgements

The New Anglia LEP wish to thank the employers, training providers and

stakeholders who contributed to the plan by attending events, being interviewed or

by making referrals to employers and organisations in the sector. This sector skills

plan was developed in 2018 by SkillsReach.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Context for Emerging Technology

The World Economic Forum report in 2018 on the Future of Jobs¹ states that:

The Fourth Industrial Revolution is interacting with other socio-economic and

demographic factors to create a perfect storm of business model change in all

industries, resulting in major disruptions to labour markets. New categories of jobs

will emerge, partly or wholly displacing others. The skill sets required in both old and

new occupations will change in most industries and transform how and where people

work. It may also affect female and male workers differently and transform the

dynamics of the industry gender gap.

The Fourth Industrial Revolution is being driven by Emerging Technology and in its

breadth and speed is creating a rapid change in the skills needed right across the

economy.

This skills plan is therefore different to the other Sector Skills Plans developed by

New Anglia during 2016-’19, because it has to cover the whole economy. This need

to focus on emerging technology and Industry 4.0 was clearly evident in the New

Anglia Cross Cutting report (summer 2018) which reviewed the common themes

which were emerging from the individual New Anglia sector skills reports.

The Fourth Industrial Revolution is also called Industry 4.0 and many descriptions

also uses terms such as the Internet of Things or the Internets of Data, Systems and

People - in practice it is all of these and is the transition in the economy facilitated by

the merging of the physical and digital environments.

The results are potentially very large for the economy with reports suggesting that:

•

15-30% of jobs could be displaced completely within the next decade;

• And, the nature of the roles in a further 30-40% of jobs may change substantially;

• New roles will also be created as all employers (public and private) utilise

emerging technology to offer new or enhanced products and services.

Applying analysis by PWC (2017) to assess which jobs are at risk due to Industry 4.0

suggests that over 303,000 jobs in New Anglia could be displaced, with similar

analysis by McKinsey (2016) on jobs which have potential for automation suggesting

that 287,000 jobs in New Anglia could be affected by automation (see figure 1). The

magnitude of this change, by 2030, clearly shows the scale of potential impact.

¹ World Economic Forum (2018), Insight Report: The Future of Jobs Report 2018, Centre for the New Economy

and Society

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

In responding to Industry 4.0 the region will obviously require new skills in

technology supply companies, but the larger effect in terms of the numbers of people

impacted will be in those sectors which use technology (in both the public and

private sectors).

This is because these end user sectors are physically much larger and have more

job roles which are at risk or will change due to automation and Industry 4.0. Whilst

this is a challenge for initial training, the larger need will be for new skills amongst

the existing workforce if we are to help the established workforce adapt to these

changes.

Process to Develop the Plan

The process to develop the Emerging Technology Sector Skills Plan has involved:

• Drawing on other New Anglia Sector Skills plans;

• Reviewing reports on emerging technology from local to global level;

• Developing data to explore the impact of emerging technology on job roles and

the workforce at aggregate and sectoral levels;

• Attendance at and running meetings and events to consult with stakeholders on

the way in which emerging technology will impact workforce and skills issues.

New Anglia Sector Skills plans

Over the last 2 years New Anglia has developed 10 sector skills plans:

•

2 in 2016 (in house) which looked at: Construction; Health and Social Care.

•

8 during 2017-18, led by SkillsReach, which looked at: AgriFood Tech; Digital

Tech; Advanced Manufacturing & Engineering; Financial & Insurance Services;

Energy; Life Sciences & the Bio-economy; Ports & Logistics; Cultural Sector.

• A further 2 (in addition to this plan) are currently in development.

Details of the way in which each of these plans approached emerging technology

and the key conclusions in each plan in relation to this challenge are set out in

Annex 2.

In addition to the individual sector skills plans, in summer 2018, SkillsReach also

developed a cross cutting report which brought together common issues from across

all the individual sector skills plans. This process clearly identified emerging

technology as a cross cutting theme (figure 3):

• Both as a challenge in its own right - Industrial Revolution 4.0;

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

• And also through the pervasive nature of digitalisation of the economy and thus

workforce skills, which is a key enabler and driver of the fourth Industrial

Revolution, or Industry 4.0.

Figure 3 - Drivers of Skills Change, New Anglia Cross Cutting Report 2018

(Source: New Anglia Sector Skills Plans Cross Cutting Report, 2018)

This same approach, with Industrial Revolution 4.0 (or Industry 4.0) as both a

challenge in its own right and as a driver of change across the economy, was also

recognised in the Made Smarter Review (originally known as the Industrial

Digitalisation Review or IDR) published by the UK government in November 2017.

Accenture led this national work which concluded that investing in digitalisation could

be worth £455bn to the UK economy over a decade³.

Reports on emerging technology from local to global level

This plan also reviews a wide range of reports from regional to global level which

have looked at how new, digitally enabled, technologies and Industry 4.0 will impact

on job roles and the workforce. Annex 1 includes highlights from these reports.

³ HMG (2017), Made Smarter Review

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Impact of Emerging Technology in New Anglia

Data on job roles and potential impacts

In parallel to the consultations and review of reports undertaken, SkillsReach have

mapped the impact that the expected change in job roles created by Emerging

Technology will have on the workforce at aggregate and sectoral levels in Norfolk

and Suffolk (at both district and LEP levels).

The data is presented in full in a separate datapack, which supports this sector skills

plan.

The key conclusions drawn from these assessments, which draw on global and UK

research by McKinsey Global Institute (2016)⁴ and PWC (2017)⁵, suggests that the

New Anglia economy is as exposed as any region to the changes which Industry 4.0

and Emerging Technology will mean for the economy, employers and workers

themselves (see figure 4)

Figure 4 - Total Jobs by Sector ‘At Risk’ (PWC) or with ‘Automation Potential’

(McKinsey)

⁴ McKinsey Global Institute (2016), Where machines could replace humans - and where they can’t (yet)

⁵ PWC (2017), UK Economic Outlook, March 2017

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

The main impacts are likely to be:

• Employees with lower levels of qualifications are more at risk of seeing their job

automated - 46% of those with only GCSE or below levels qualification are at

risk, compared to only 12% of those with degree level qualifications (see table 1);

Table 1 - New Anglia workforce ‘At Risk’ of Automation by Qualification Level

(see datapack for full details and referencing)

Higher

% with degree or equivalent & above - aged 16-64

221,300

Education

Number at Risk

26,600

(12% at Risk)

% with higher education below degree level - 16-64

73,800

% with GCE A level or equivalent - 16-64

247,600

Medium

% with GCSE grades A-C or equivalent - 16-64

222,100

Education

(36% at Risk)

Total

543,500

Number at Risk

195,700

% with other qualifications (GCSE) - 16-64

99,500

Low

% with no qualifications (GCSE) - 16-64

77,400

Education

Total

176,900

(46% at Risk)

Number at Risk

81,400

Total at Risk

303,600

Population Aged 16-64

941,700

Totals

% at Risk

32%

•

15-30% of jobs could be displaced completely within the next decade by new

technology which automates a role entirely making it redundant, but with large

variation between sectors (see table 2);

• The nature of the job roles which need to be undertaken in a further 30-40% of

jobs may change substantially, necessitating these staff to develop new skills

(see table 3);

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Table 2 - Analysis of Key Determinants of Job Numbers at risk by sector (see

datapack for full details and referencing)

Highest impact

Lowest impact

Number of

70,000 jobs have automation

4,800 jobs have automation

job roles at

potential (McKinsey) &

potential (McKinsey) & 4,000

risk by

63,200 (PWC) are at risk in

(PWC) are at risk in mining, energy

sector

retail, wholesale & transport

& water

The sector with the highest

The sectors with the lowest

proportion of automation

proportion of automation potential

potential (McKinsey) is

(McKinsey) are manufacturing with

accommodation & food

30% and business & public

service with 75%

administration with 31%

Table 3 - Analysis of Key Determinants of % of Job at risk by sector (see

datapack for full details and referencing)

Highest impact

Lowest impact

Sector

46% jobs in manufacturing at

8.5% jobs in education sector at

risk (McKinsey 2016)

risk (PWC 2017)

The impact on sectors varies due to:

• Substantial difference in terms of the numbers of job roles at risk, based on both

the proportion of job roles in the sector at risk and large variations in employment

by sector. The largest impacts are likely in sectors with a large workforce, many

of whom do repetitive roles.

• Using PWC analysis 3 sectors account for 63.5% of all jobs at risk:

o Retail, wholesale & transport at 70,000 jobs;

o Business & public administration at 32,900 jobs;

o Manufacturing at 30,600 jobs.

• In contrast other sectors are likely to see many fewer staff displaced as they are

smaller employment sectors with a smaller % of job roles at risk of automation.

• In some sectors there is a big gap between jobs at risk (PWC analysis) and those

where the job role may change due to automation of some roles which are

currently performed by people (McKinsey analysis) e.g. health and social care,

accommodation and food service.

The conclusion is that there is a large degree of variation between sectors of the

economy in terms of what proportion of jobs are at risk. As a generalisation sectors

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

which have more jobs roles which require problem solving, creativity & inter-personal

skills have less potential for automation than those where repetitive, manual tasks &

routine data recording or input are required.

Furthermore:

• New job roles will be created as all employers (public and private) utilise

emerging technology to offer new or enhanced products and services, but many

of these new roles are not yet apparent and so are hard to plan for;

• Industry 4.0 will require new skills in technology supply companies, whose market

is likely to grow necessitating the recruitment of extra staff as well as the

development of new skills;

• Overall, the changes expected will have a larger effect in terms of the numbers of

people impacted in those sectors which use technology (in both the public and

private sectors), with most sectors seeing half or more of their current job roles

either displaced completely or substantially changed by technology;

• The speed of change also means that we cannot be focused just on young

people entering the workforce for the first time. To respond positively to Industry

4.0 will require a significant increase in upskilling of the existing workforce.

The data analysis therefore shows that the impact of Emerging Technology will be

felt right across the economy and across all districts in New Anglia.

Every sector will be affected, with some sectors which have not been seen as

priorities by New Anglia e.g. retail and public and business administration, seeing

some of the biggest anticipated changes in terms of the number of job roles which

are at risk.

In the case of retail, the development of online retailing and the displacement of high

street stores means that the largest private sector employer in New Anglia, the retail,

wholesale and transport sector, is likely to see a rapid displacement of workers (see

annex 2 for further analysis of this).

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Spatial Impact

The variation between districts in terms of the % of jobs with automation potential is

relatively low, suggesting that all districts will be impacted to a medium to large

extent (figure 5).

The district level variation is primarily driven by variations in the sectors which

predominate in the local economy at district level (table 4).

Figure 5 - Proportion of Jobs with Automation Potential by Norfolk and Suffolk

Local Authority

Table 4 - Districts level impact (see datapack for full details and referencing)

Highest impact

Lowest impact

District

Proportion of jobs roles with

Proportion of jobs with automation

automation potential is

potential is lowest at 37.1% in

highest at 45.2% in Great

Breckland

Yarmouth

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

The potential for economic gain

However, reports also suggest that, in common with previous Industrial Revolutions

the changes we are likely to see due to Industry 4.0 will also:

• Increase growth;

• Create new industries and job roles, many of which don’t currently exist.

The Made Smarter Review (2017), as noted above, projects that embracing Industry

4.0 will unlock growth across the economy, worth £455billion in the first decade.

Other reports make similar projections with a recent report from BEIS (2019) on

Artificial Intelligence (AI)⁶ reporting on work by Accenture which suggests that AI

could add £630billion to the UK economy by 2035 and increase GVA growth from

2.5% to 3.9% (much higher than has been seen in the last 20 years).

Furthermore, wider changes in the economy and demographics mean that young

people entering the jobs market and those displaced from existing roles are likely to

find jobs, because:

• In New Anglia and the UK, over the long term birth rates have fallen meaning that

there are fewer young people entering the workforce;

• Average age in the workforce is increasing and many industries are struggling to

find enough young entrants to replace those who retire;

• Unemployment rates have fallen and are now at the lowest rates since the early

1970s meaning that there is very little slack in the jobs market.

The real economic challenges are therefore that:

• The economy needs to address wage growth which lagged inflation for nearly a

decade after the economic crash in 2007-’08, with a squeeze on family incomes

and growing political impacts as workers saw the value of their earnings eroded

by inflation for the longest period in at least 70 years;

• The dependency ratio is rising (i.e. how many people each worker supports),

meaning that the economy needs to increase the productivity generated by each

worker so they can support more of those who are not working (whether as

children, students or the retired);

• Workforce supply is the growing challenge for most employers.

⁶ Professor Dame Wendy Hall and Jérôme Pesenti (2019), Growing the Artificial Intelligence Industry in the

UK, BEIS

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Productivity growth is therefore needed to increase wealth and real wages through

creating higher paid, higher skilled jobs which are more productive.

This analysis suggests that even if 30% or more of current job roles are lost to

digitalisation & automation (as some suggest), we will not be short of jobs.

Those displaced will find new jobs, in new industries or by undertaking new roles in

their current industry or for their current employer. However, Industry 4.0 is, like

other industrial revolutions, likely to change the structure of the economy across the

country and indeed the World.

No LEP area is immune from this change and whether this change allows an area to

improve its position will primarily depend on the speed with which it is able to

respond.

A critical determinant of whether an employer, sector, LEP area or the whole of the

UK is able to benefit from the potential productivity gains created by Industry 4.0 will

be its ability to ensure that it has the skills and knowledge to embrace this change.

This must encompass both ensuring the young have the skills needed to prosper in

the new working environment and that the existing workforce is supported to gain the

skills needed for new or changed job roles.

In a new paper McKinsey⁷ argues that we have to embrace lifelong employability by

changing the way that we train workers for new roles. The key need they identify is

to support existing workers to gain the new skills needed through tailored, bite sized,

regular, participatory and social learning, which becomes a standard part of

organisational culture, rather than formal, standardised and occasional courses.

They argue that unless this change is embraced workers will find it increasingly

difficult to keep up to date with the skills needed in the workplace as it embraces

technology, with artificial intelligence (AI) being particularly disruptive to job roles.

⁷ McKinsey (2019), Competitive Advantage with a Human Dimension: from Lifelong Learning to Lifelong

Employability

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Consultation Feedback

Meetings and Events

In developing the Emerging Technology Skills Plan a number of local, regional,

national and international meetings were attended to provide feedback on how

different sectors, stakeholders and regions see this challenge. This included:

• Liaising with providers and stakeholders in the Institute of Technology (IoT)

(meetings in July and September 2018) & Institute of Productivity (IoP)

development group (meeting October 2018) to understand how these initiatives

can support New Anglia in responding to the Emerging Technology challenge;

• Engaging with employer stakeholders to understand how the challenge paper

conclusions relate to their experience through consultations at:

• The 17th September 2018 productivity challenge event run by Hethel

Innovation at UEA;

• The 16^th November 2018 employers engagement event run to support the

Eastern Institute of Technology (EIoT) proposal.

The plan was also be informed by feedback gained by Martin Collison (SkillsReach

team) from engaging with a range of regional, national and international events

focused on Industry 4.0 and digital technology adoption, including (all funded

separately to the skills plan):

• Speaking to the Lincolnshire Industry 4.0 skills working group 30th August 2018;

• Speaking at the Agricultural Economics in Transition conference XV in Budapest

on how technology will change the food chain 11th September 2018;

• Attending the Greater Lincolnshire Innovation Council meeting on Industry 4.0 on

19th September 2018;

• Speaking at the EU SKIN Project technology event in Hungary on 25th

September 2018;

• Speaking at the EFFAT EU Trade Union’s events: Budapest on 25th October

2018; Copenhagen on 5^th February 2019, on technology impacts on job roles;

• Speaking at the West Sussex Growers Association in Chichester on 26th October

2018 on how technology will affect the agricultural and horticultural industry;

• Presenting the draft plan to the New Anglia Innovation Board on 19^th February

2019 to debate how best the region can rise to the challenge of Industry 4.0.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Employer Consultee Feedback

Employer representatives at the EIoT meeting reported that many people and

organisations are still not clear what is meant by Industry 4.0, or how this will impact

their workplace and thus are uncertain how skills needs are likely to change.

It was reported that some major sectors, e.g. construction, know that Industry 4.0 will

impact them, but very few in this sector have begun to address this challenge to

date, largely due to more pressing short term issues and a lack of certainty about

how it may impact them.

A straw poll of 12 employers at the consultation exercise for the Eastern Institute of

Technology (EIoT) showed that on a scale of 1-5 (where 1 = not ready and 5 =

ready):

• For employers who were primarily technology end users (7 companies): the

average score for their organisation’s preparedness for Industry 4.0 was 2.7

compared to 2.4 for their sector as a whole;

• For purely technology provider companies (1 company) they rated their own

company at 5, but their sector still only at 1;

• For companies which both provide and buy technology (4 companies), the rating

was 3.8 for their own readiness but only 2.0 for their sector as a whole.

This is broadly consistent with other reports and surveys, which show that many

companies and employees rate their own preparedness for Industry 4.0 more highly

than the sector in which they work.

In August 2018 the Fabian Society and Trade Unions launched a 2 year commission

into Workers and Technology⁸, with the publication of new evidence on British

workers hopes and fears for automation in the next decade. Their initial evidence

shows that (based on an online survey of over 1,000 workers):

• Overwhelmingly, workers are positive about their own ability to navigate change:

73% are confident they will be able to change and update their skills if new

technology affects their job. After learning about how technological changes will

affect the workplace, over half (53%) were optimistic about their future working

life and job prospects.

• However, a significant minority were anxious about the impact of automation over

the next 10 years: 37% of workers (i.e. circa 10 million people nationally) are

⁸ Fabian Society (2018), Workers and Technology https://fabians.org.uk/workers-and-technology/

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

worried their job will change for the worse; and 23% of workers (i.e. 6

million people) are worried that their current job may no longer be needed.

Whilst the balance of those consulted were optimistic about their own chances of

coping with the changes brought about by Industry 4.0, this contrasted sharply with

their views about the help on offer to them to help them embrace Industry 4.0:

•

9% of workers think that the UK government is taking steps to prepare them for

new workplace technologies;

•

16% (with a trade union in their workplace) think their union is taking steps to

help ensure new technologies improve working life;

• And, only 27% think their employer is taking action to prepare them for change.

Caution is needed in interpreting this data, because those who are more likely to

respond to these surveys are usually those who have already engaged with the

issues and are thus likely to be more prepared.

However, the local evidence and national reports consistently suggest that, at

sectoral or economy level, many employers have yet to understand the impact that

Emerging Technology may have on their organisation.

What Action is Needed

Key areas which local employer and stakeholder consultees considered the region

needs to focus on to provide the skills needed for emerging technology were:

• Apprenticeships - there was concern that the levy and reforms have disrupted

established successful models in the technology sector. There is a need for

apprenticeships to have more status and for greater flexibility in how

apprenticeships are managed. Employers felt that the frameworks and standards

were too rigid and not flexible enough to meet the rapidly changing employer

needs which Industry 4.0 implies;

• Applied courses - degrees need to be more applied e.g. including placements, so

that students are prepared for the way in which emerging technologies can be

applied. Employers also favour ‘HNC’⁹ type provision and think this should be

used to address the emerging technology skills need;

• Work experience - it was felt strongly that current work experience is failing

young people and that children, from age 14, should be supported to use their

holiday time to gain experience of work (employers stressed that the excuse that

this is stopped by H&S can be overcome with the correct risk assessments even

⁹ Employers favoured part time, practically applied provision which employees can combine with work and

which are delivered on a block or day release basis with further practical study in the workplace

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

in very physical environments such as construction). This work experience should

be accredited;

•

Vocational pathways - there is a need for a vocational pathway at GCSE. It was

felt that ‘T’ Levels are too late as by this stage most students are fixed on an

academic route even if this does not suit them;

•

Young workers as trainers - employers reported that many young staff in their

organisation had a much better understanding of the potential of emerging

technology and could be used to train older staff in how to optimise the use of

new technology;

•

Local delivery - employers stressed that local delivery is essential because many

students and workers will not/cannot travel easily across the region. To deliver

new skills for Emerging Technology it will therefore be important to include virtual

outreach, blended learning (so that learners get a social experience as well) and

similar models (e.g. video conferencing), so that the whole workforce can

participate at a time and pace which suits them and their other commitments;

•

Bite size delivery is also needed for industry 4.0 using videos, practical

applications and test centres, with this particularly important for the established

workforce who need to fit training in around their other commitments;

•

Culture change - it was felt that the biggest challenges to adopting Industry 4.0

relate to culture change and thus a focus on soft skills is needed alongside

technical education and training to support business uptake.

Delivery also needs to recognise that:

• Working through established business groups can be very effective - many

business groups have HR manager forums/groups which can be used as an

effective conduit to promote training and to ensure that regional programmes

align with employers’ internal programmes;

• Need to reduce the bureaucracy - if businesses are expected to manage the

process this is likely to fail, because the administration of publicly supported

training is simply too complex (including apprenticeships) and, if businesses are

expected to do this themselves, many will not take part.

It was felt that the most important issue for employers is to get rid of educational

jargon and produce a simple, clear 2 page explanation of the emerging technology

training offer, which ends with a very clear set of next steps which they can take to

engage in the process. It was felt that unless this is implemented most businesses

will not choose to engage and will continue to try to meet their needs through

recruitment rather than training their own staff.

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Emerging Technology Sector Skills Plan, February 2019

Strategic Alignment

Consultees at the New Anglia Innovation Board suggested that:

•

There is a need to co-ordinate local action being taken on Industry 4.0 related

provision by the Institute of Productivity (IoP) at UEA with the Institute of

Technology (subject to approval);

•

The review of Post-18 Education¹⁰ led by Philip Augar is important in reviewing

both FE and HE provision and how this can provide seamless progression, which

is important in the context of Industry 4.0;

•

It is important for the work on Industry 4.0 to focus on how to support productivity

growth by working with employers to co-create programmes which meet their

changing skills needs;

•

It is important to recognise that many young people have excellent digital skills as

‘digital natives’, but don’t have the formal qualifications to prove these skills. It is

important for employers to utilise these skills even if they are unaccredited;

•

Meeting the training needs of the established workforce in relation to Industry 4.0

is a larger challenge than training young people and it is important that

educational policy and local delivery embraces this so that the benefits of

Industry 4.0 can be captured across the economy;

•

It is important for Industry 4.0 transition support to integrate training provision with

business support, as is proposed in the New Anglia Strength in Places Fund

application (subject to approval);

•

Employers engaged in existing business support programmes have very mixed

views on digitalisation, but most don’t know what possibilities digital technologies

offer to them. This means they are unable to identify their needs unless they are

supported to understand what might be possible. This is a key role for the

Growth Hub and local business support programmes so that employers can be

signposted to the most appropriate provision;

•

The needs of technology adoption in end user sectors of the economy is more

important than the needs of the technology sector itself, due to the scale of the

wider economy and the need to ensure that the breadth of the economy (public

and private sector) is World class in technology adoption;

•

It would be useful to use LEP sector groups to help undertake and regularly

update foresight exercises to identify how Industry 4.0 may impact their sectors

and to identify the training needs which arise from this;

¹⁰ DfE (2018), https://www.gov.uk/government/publications/review-of-post-18-education-and-funding-terms-

of-reference

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

• This foresight activity must link to the LEP economic strategy and be clear on

both the opportunities and challenges facing the area in adopting Industry 4.0.

This also needs to be clear why it maybe more challenging in areas such as New

Anglia, e.g. the rural and sparse nature of much of the geography, or the absence

of a Mayoral Authority with greater delegated powers;

• The magnitude of the change which Industry 4.0 will lead to means that a

strategic approach is needed. To deliver this it is important to establish an

Industry 4.0 task force or similar structure to co-ordinate the actions taken both to

support the technology industry, e.g. by the Digital Skills Taskforce, IoP and IoT,

with wider support for the adoption of technology across the economy by the

Skills Board, Innovation Board and Local Industrial Strategy. Alignment with the

ICT and digital strand of the Local Industry Strategy is important.

Summary of Findings on Training Provision for Emerging Technology

In developing a skills plan for how to support the adoption of emerging technology,

there are a series of key questions which need to be addressed about whether the

current skills system is equipped to respond to this challenge, as set out in table 5.

Table 5 - Headline Questions and Evidence on Industry 4.0

Key questions and

Evidence

challenges

Starting points - are school,

Evidence from the earlier skills plans and the

college and university leavers

consultations for this plan suggests the answer is

gaining the right skills (hard

no.

and soft) to embrace current

Too few students study the skills which are

and future technologies?

needed and the curriculum is poorly aligned with

employer needs.

There are big gaps in the supply of students with

the skills needed despite those with the right

skills to power the adoption of emerging

technology commanding higher salaries.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Do the trainers have the right

There are reports showing this is a major problem

skills to facilitate the take up

nationally and the skills plans developed in 2016-

of emerging technology in

18 for New Anglia showed this is a challenge

education?

locally across multiple sectors.

And, is there an adequate

The earlier sector skills plan identified challenges

supply of trainers?

in recruiting staff with digital/ICT skills, as well as

related areas such as engineering. The main

challenge is that staff in these areas can earn far

more in industry than they can in education and it

is therefore very hard to retain them in the

education system.

Technology is a major driver of change in the

economy and it is vital that the educational

workforce itself has the skills to develop students

abilities in the skills needed to adopt Industry 4.0.

Is there appropriate

Evidence from the New Anglia skills plan

curriculum available or will it

consultations show that there is a problem with

have to be adapted or made

the curriculum failing to keep up with the speed of

bespoke?

technological change.

What levels and delivery

There is also clearly a link to the point above on

styles will be needed?

teachers and trainers lacking the skills needed

and providers struggling to recruit staff in many

Will accredited or non-

technology focused disciplines.

accredited training be

needed?

Some data has also shown that the number of

students studying ICT has been falling despite

How can funding be aligned

increased demand for these skills.

with employer needs?

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Are there cultural barriers

National and EU level reports suggests that in

which restrict the willingness

many cases culture change and skills challenges

to embrace technological

are more significant than the availability of

change amongst both

technology itself and our local consultations

employers and employees?

reached the same conclusions.

If so, how can these be

Employers recognise that adopting new

tackled?

technology normally requires new systems to be

designed, management structures to change and

companies to change working practices.

Globally the availability of technology will

continue to develop rapidly, but whether local

economies, such as New Anglia, benefit will be

more to do with whether their economies

embrace the possibilities it provides, with culture

change and skills at the heart of the economy’s

ability to respond.

To respond to these challenges there is a need to

provide leadership, both technical and

management, whilst helping employers to

recognise the potential that emerging technology

may have in their organisation.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Emerging Technology Skills Plan

Many commentators argue that we are truly on the cusp of the next Industrial

Revolution, Industry 4.0, which will, like previous revolutions, affect the whole

economy. However, this time the transition is likely to be faster (as we are already

seeing in retailing) and in the process we are likely to see many business failures

whilst new ones emerge.

There is growing awareness that whether employers survive this process will, as with

Darwin’s Theory of Natural Selection, be more dependent on the ability to adapt

rather than their fitness for purpose at any particular time.

It is this ability to adapt rapidly which is at the heart of the skills challenge which

Industry 4.0 (and the Emerging Technology which is driving it) is creating across the

New Anglia economy.

Evidence shows that there is a generic shortfall of workforce supply across the

economy (not only in New Anglia, but across much of Northern Europe) as birth

rates have fallen, average age is increasing and unemployment rates have fallen.

The challenge is therefore that:

• The dependency ratio is rising (i.e. the number of people who are dependent on

each worker) and this means that society needs to focus on increasing the

productivity of those in the workforce;

• Workforce supply is the growing challenge for most employers with vacancies

across the economy and historically very low unemployment (lowest for 2

generations);

• Productivity growth is needed to increase wealth & real wages following a

decade, since the global slowdown, of falling real wages.

This suggest that even if 30% or more of current jobs are lost or changed

substantially by Industry 4.0 digitalisation & automation (as some suggest), we will

not be short of jobs. Those displaced will find new jobs or new job roes with their

current employer, assuming that they are assisted to transition to new job roles by

investing more in skills & retraining & doing this fast enough.

Whilst the adoption of technology can increase productivity it will also lead to many

jobs roles being completely or partially automated and this process needs to be

managed. Evidence also suggests that new job roles will need to be undertaken to

support the adoption of emerging technology.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

These new job roles could be to design, build, install and manage the new systems

which are created, but are equally likely to be created by allowing end user sectors

of the economy to develop new or enhanced services.

For example, in health and social care, telemedicine, automated diagnosis or robotic

care assistants may well render many current roles redundant, but could free

clinicians and care assistants to interact more directly with those in their care

focusing on the person and their psychological as well as their physical care needs.

In the logistics industry automated cranes, forklifts and trucks are likely to reduce the

demand for drivers, whilst at the same time increasing the demand for engineers,

ICT specialists and logistics planners.

In other sector, such as retail, the transition is likely to mean completely different

business models reduce workforce size and release staff to join other sectirs.

For New Anglia it is important to consider how Emerging Technology will enable the

Industry 4.0 transition and to provide leadership to this process, so that the region

gains from the opportunities Industry 4.0 provides.

The transition in the economy, will, as is shown in the evidence base for this plan,

have different impacts in different sectors, impact those with higher qualifications

less than those with lower qualifications and affect some job roles far more than

others. However, no sector is immune from the change and as shown all districts in

New Anglia currently have between 37-45% of their job roles at risk from automation.

The impacts will thus be region wide and affect every sector, with most areas seeing

both positive and negative changes which they need to respond to.

The result is likely to be that:

• Some sectors grow their workforce whilst that in other sectors fall substantially

(even if the GVA or economic value of the sector does not change given the

different potential for automation);

• The aggregate demand for some skills will fall whilst for others it will rise. For

example every report suggests the demand for digital skills is rising, but this is

not being reflected in more course enrolments. If the region wants to

successfully manage the transition to Industry 4.0, this needs to change;

• The need for different skills should impact the choices made by young people to

help prepare them for the new job roles which will be available in the economy,

but in terms of numbers the bigger challenge is how to help existing workers

develop the skills needed to remain relevant in the workforce;

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

• The demand for hours spent across the economy on physical, manual and basic

cognitive skills will fall by 14-15% by 2030¹¹, whilst the demand for hours spend

on higher cognitive skills will rise by 8%, those on social and emotional skills by

24% and technology skills by 55%;

• Furthermore, the impact of new technology on new skills requirements will

disproportionately impact those with lower qualifications. More jobs roles will also

demand higher levels of qualification and thus reduce the jobs market potential

for those with skills at lower levels;

• Most employees are likely to have multiple job roles during their career and as a

result rather than seeing education as a single major event followed by a career,

we need to see education and training as a continuous process throughout life.

This is a major challenge to established educational and funding models. In the

consultation for this plan the need for change in educational structures was

clearly identified by employers.

However, the challenge created by emerging technology and Industry 4.0 is not

simply a skills one and in addressing this proactively New Anglia needs to

understand, plan for and proactively support economic change by using all the levers

it and its partners have, including planning, business support, incentives and grants,

thought leadership and skills.

Consultees were clear that the transition to Industry 4.0 needs to be a strategic,

cross sectoral challenge which the LEP seeks to address both through its economic

strategy as well as through skills policy.

Existing New Anglia skills plans, notably the ones for DigitalTech and Advanced

Manufacturing and Engineering (AME), already deal with the skills challenges of the

technology sector itself. Therefore in addressing the supply of emerging technology

skills for those companies in New Anglia who provide Industry 4.0 technologies and

solutions, these two existing skills plans should be used.

As noted by consultees the larger challenge, in terms of numbers of students or the

existing workforce, who will need new skills due to Industry 4.0, arises in those

sectors which will use Industry 4.0 solutions (supplied to them in most cases by

companies in the DigitalTech and AME sectors) to improve productivity. It is these

end users of Industry 4.0 on which the skills actions identified in this plan should

primarily focus.

¹¹ McKinsey Global Institute (2018), Skill Shift Automation and the Future of the Workforce

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Skills Actions to be Taken

Based on the evidence collected it is recommended that embracing Industry 4.0 is

adopted as a cross cutting need which pervades all aspects of the New Anglia

economy and linked to the ICT and Digital strand of the Local Industrial Strategy.

To address this successfully New Anglia will need to provide leadership on the

economic changes which this will lead to across the economy and consider how:

• The region ensures that it can grow sectors to the economy which will benefit

from Industry 4.0;

• Manage the decline or reinvention of sectors where Industry 4.0 may eliminate

many of the existing jobs, job roles and/or companies/organisations;

• Facilitate the movement of the existing workforce between sectors or job roles as

some existing jobs are displaced and new ones created;

• A co-ordinated effort by skills providers, working collectively given the magnitude

of the impacts which are likely to be seen, can proactively facilitate the resultant

economic transition.

If this transition is successfully managed it could:

• Allow New Anglia to embrace the new economy Industry 4.0 will lead to more

rapidly than other areas, increasing its growth rate and economic success;

• Support the move to a knowledge led economy;

• Help workers to have more rewarding, higher skilled and better paid jobs, with

less physical stress and a reduced need to undertake boring repetitive roles.

The all-encompassing nature of Industry 4.0 means that the region will need to

address:

Two key challenges:

• Ensuring that the technology industry itself can scale up to provide the solutions

needed across the economy;

• Supporting adoption of industry 4.0 by end user sectors so that they remain

competitive (commercial sector) or can deliver enhanced public services within

constrained budgets (public sector).

Each of which in turn have two dimensions:

• Initial training and education so that those entering the workforce for the first time

bring with them the skills needed to embrace the opportunities, offered by

Industry 4.0;

• And workforce development so that the existing workforce is equipped with the

skills needed to enhance their career prospects as Industry 4.0 pervades the

economy.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Action 1 - ICT and Digital in the Local Industrial Strategy

To successfully deliver a response to the challenges created by Emerging

Technology a commitment is needed to put in place a robust leadership model,

supported by both the public and private sector, to proactively drive this change in

the New Anglia economy.

The challenge requires leadership in terms of both thought leadership as well as

proposing, developing, resourcing and leading practical actions to position New

Anglia to benefit from the 4^th Industrial Revolution.

This could be best delivered through a public/private Industry 4.0 led theme in the

ICT and digital strand of the Local Industrial Strategy (LIS), to develop and

implement practical policies to support positive economic change.

This must embrace both the opportunities provided by Industry 4.0 at the same time

as addressing the socio-economic challenges created by rapid changes in how and

where people work. In doing this it is important to address:

For major sectors of the economy:

• How industry 4.0 will affect the sector (public and private sectors) by working with

established New Anglia sector groups to continually update foresight exercises

for their sector relating to the technology that they will adopt;

• Clarify the skills and knowledge challenges the sector has to address to adopt

Industry 4.0;

• Identify how skills and knowledge interventions can be aligned with other support

for technology adoption (e.g.: business support; innovation support and grants;

commercial investment and grants for investments in new technology).

For the education and skills response:

• The changes needed to education and skills provision to meet future economic

needs due to Industry 4.0;

• How education and training provision and economic development support can

work together to support the transition to a new economy through packages of

training and education, business support and investment.

New Anglia is fortunate that local partners have already begun to develop work in

this area and should seek, in developing the ICT and digital strand of the LIS, to

build on the initiatives already being taken.

Consultees stressed that the breadth of the challenge means that this should seek to

unite those who focus on technology development with representatives of those who

need to adopt Industry 4.0 solutions. They stressed the need to support technology

adoption as the prime focus.

This work will initially focus on four additional skills actions:

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

• Action 2 Train Young People to be Industry 4.0 Professionals - to increase

recruitment and training of young people for Industry 4.0 technology supply

companies;

• Action 3 Upskill existing Industry 4.0 workforce - workforce development for

the Industry 4.0 supply industry;

• Action 4 Integrate Industry 4.0 awareness into all courses at school/FE/HE -

to ensure they understand how Industry 4.0 will impact their chosen career;

• Action 5 Upskill existing sectors workforce to adopt Industry 4.0 - to develop

awareness of Industry 4.0 amongst the existing workforce across all sectors.

Actions 2 and 3 will be delivered primarily by building on and uniting the interventions

identified in the New Anglia DigitalTech and Advanced Manufacturing and

Engineering Sector Skills Plans and be led by the groups already charged with

delivering these plans.

Actions 4 and 5 are new and will be the core delivery focus for this Emerging

Technology Sector Skills Plan, aligned with the LIS theme on ICT and digital. They

will be delivered by working with the sector skills plans sub groups for each of the

existing plans to support their work on emerging technology adoption.

The Industry 4.0 theme in the LIS will also need to advocate with employers on the

need to adopt Industry 4.0 and produce a simple employer guide on Industry 4.0 and

where they can seek help with skills for technology adoption.

The Industry 4.0 deployment agenda in the Local Industrial Strategy needs to draw

on local existing expertise and activities linked to Industry 4.0, including:

• New Anglia Innovation Board

• Institute of Productivity (IoP including NAAME)

• Eastern Institute of Technology (EIoT)

• Digital Skills Task Force

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

The suggested Industry 4.0 delivery structure brings together a range of existing

initiatives aligned with the ICT and Digital strand of the LIS, including:

New Anglia LEP Board

New Anglia Skills Board

Industry 4.0 theme under ICT and Digital strand of the Local Industrial

Strategy (LIS), drawing on expertise from:

New Anglia Innovation Board

Institute of Productivity (IoP including NAAME)

Eastern Institute of Technology (EIoT)

Digital Skills Task Force

Action 2:

Action 3:

Action 4:

Action 5:

Train Young

Upskill

Integrate

Upskill

People to be

existing

Industry 4.0

existing sectors

Industry 4.0

awareness into

workforce to

professionals

workforce

all courses at

adopt Industry

school/FE/HE

4.0

Digital Skills

Task Force,

LIS ICT &

IoP & EIoT

digital theme

Sector skills plan sub groups for:

Link to & support sector skills

plans sub groups for:

Digital Tech;

AgriFood Tech;

Advanced Manufacturing &

Construction;

Engineering (AME)

Energy;

Financial & Insurance Services

Health & Social Care;

Life Sciences & the Bioeconomy

Ports & Logistics

Tourism & Culture

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Action 2 - Train Young People to be Industry 4.0

Professionals

Rationale: the technology suppliers (e.g. ICT, engineering companies) who

support the adoption of Industry 4.0 can expect to see their market grow as the

uptake of Industry 4.0 grows. It is essential that the industry promotes the

opportunities in the sector and works with education and training providers to

ensure that the technology suppliers can expand their workforce.

Action to be Taken: the supply of young people with the right school and post

compulsory training and education to support the development and deployment of

Industry 4.0 has to be increased. This action has to start in school and ensure that

more children study the STEM subjects which underpin Industry 4.0 adoption.

This requires:

• More students to leave school with formal STEM and particularly digital

qualifications & training and to progress to College and University courses

which equip them for careers in the supply of Industry 4.0 solutions;

• Careers information and guidance has to be reinforced to promote the growing

importance of Industry 4.0 and the skills needed to enter the sectors which will

support adoption of emerging technology across the economy;

• Work placements which include Industry 4.0 applications;

• A focus on apprenticeships, including higher apprenticeships, focused on the

technology supply industry;

• Colleges and Universities need to provide more courses which combine digital

and Industry 4.0 themes with other disciplines to drive applications of the

technology across the economy (e.g. digital with management, arts, design,

sectoral/vocational etc.).

Leadership: this action will be led by the Digital Skills Task Force and Institutes of

Technology and Productivity to help Universities and Colleges increase their focus

on courses which provide Industry 4.0 skills. The sector skills plan groups for

Digital Tech and AME will align their work to provide employer input to guide this

action.

When: the need to increase the supply of young people in the Industry 4.0 sector

is current and work has already begun through initiatives such as the EIoT, IoP

and new facilities at Colleges and Universities.

Resources and support: this action requires constant updating of the curriculum

for technology courses and investment in the technology available to deliver

courses.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Action 3 - Upskill existing Industry 4.0 workforce

Rationale: the speed of technological change in Industry 4.0 means that there is a

need for constant updating and expansion of the existing workforce in technology

supply companies to ensure they have the skills needed to help their customer

base adopt the latest technology

Action to be Taken: the key action to be taken is to ensure that the New Anglia

emerging technology supply industry is embracing the latest technology from

across the World and developing the skills to help implementation of these

technologies across the economy. This action should also encourage those with

strong sectoral backgrounds and understanding of how technology can support

organisational performance to join Industry 4.0 technology suppliers to help

facilitate adoption of emerging technology across the economy.

This requires:

• Bite size, blended local delivery of training and education to communicate the

latest technology effectively to those already in the technology sector;

• A focus on additional training to help technical experts in Industry 4.0 acquire

the skills to support their customer base in adopting Industry 4.0. This needs to

include training in both technology and how it can be implemented (e.g. the

business case and soft skills required in the end user company etc.);

• More focus on the development of multi-skilled professionals to deliver

applications across the economy (e.g. emerging technology for health care), by

ensuring that staff with a range of technical backgrounds can work together to

deploy Industry 4.0. This can include recruiting and training workers from other

sectors with sectoral specialism and understanding to work alongside technical

experts to deploy Industry 4.0 solutions.

Most programmes will include a range of these skills and attention will also focus

on ensuring that clear progression pathways for the industry are established.

Leadership: this action will be led by employers with the support of the Digital

Skills Task Force and NAAME.

When: the need for updating is ongoing and needs to build on existing in house

and sector based programmes of professional development, training and

demonstration.

Resources and support: the resources needed for this action will primarily come

from employers, but will be supported with specialist input and advice from the

Digital Skills Task Force, NAAME, IoP and EIoT.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Action 4 - Integrate Industry 4.0 awareness into all courses

at school/FE/HE

Rationale: the future workforce will be entering jobs in which the use of technology

based on Industry 4.0 is a standard feature of their working life. Whichever part of

the public or private sector students will ultimately work in, it is therefore vital for

them to gain experience in how Industry 4.0 based technologies will support the

job roles they will undertake and to ensure that they have the skills to apply these

technologies effectively. If students acquire these skills they will be able to secure

good jobs, not least because they will be able to bring new skills to their employers

and potentially fulfil a role in helping existing employees understand how these

technologies can be applied effectively.

Action to be Taken: the key action which is needed is to ensure that all young

people, regardless of the disciplines they study, learn the skills to successful adopt

emerging technologies which drive productivity and effectiveness. This requires:

• The integration of Industry 4.0 adoption skills (technical, management of

change and culture) into all programmes at all levels;

• Digital and Industry 4.0 skills to be treated like Maths & English as foundational

skills which are central to employability in every sector.

Most programmes will include a range of these skills and attention will also focus

on ensuring that clear progression pathways for the industry are established.

Leadership: this action needs to be taken forward by Universities and Colleges in

New Anglia with the Enterprise Advisor Network (EAN) and initiatives such as the

Institute for Technology and Institute of Productivity, which can provide specialist

expertise to help lecturers and academics identify areas to apply Industry 4.0

within the curriculum.

When: there is a need to start the redesign of courses during 2020 and to maintain

this action for at least the next 5 years as Industry 4.0 continues to change the

skills needed right across the economy.

Resources and support: the main resources needed initially are for curriculum

redesign to ensure that Industry 4.0 is integrated into courses. This will lead to a

need for continued investment in facilities (potentially with technology suppliers) to

provide examples of technology. Given that many lecturers and academics are not

technology experts, a project to assist them to review their curriculum and identify

areas in which Industry 4.0 can be applied should be supported by the LEP in

conjunction with the Institute of Productivity and Institute of Technology. Training

for lecturers is also needed to equip them with the skills to deliver Industry 4.0.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Action 5 - Upskill existing sectors workforce to adopt

Industry 4.0

Rationale: the majority of the workforce in New Anglia work in ‘end user’ parts of

the public and private sector, where the challenge is how to adopt Industry 4.0 so

that it improves productivity and effectiveness. Evidence suggests that over a third

of the current New Anglia workforce will be impacted by either the need to develop

a new career if their job is displaced by technology, or to obtain new skills to

secure their job role as technology changes how work is performed.

Action to be Taken: the scale of the long term challenge and lack of established

provision at the scale or with the focus needed, means that action needs to be

developed in at least two phases:

• A pilot phase during 2020-’21 to work with at least two end user sectors to

undertake a foresight exercise to understand how Industry 4.0 will change the

skills needed in their sector and to pilot ways of supporting members of the

existing workforce to either gain the skills needed in the future in their sector, or

to retrain for other sectors where demand in increasing;

• Rollout of the successful models for workforce upskilling developed in phase 1

to the rest of the New Anglia economy.

This action is central to the ability of the New Anglia economy to respond to the

opportunities and challenges resulting from Industry 4.0 and must therefore be

aligned with the Economic Plan and the Local Industrial Strategy.

This action can be supported by the Mid Life MOT support linked to the

government Pension Service and National Careers Service. This also needs to

build on Adult Education and Skills Support for the Workforce programmes.

Leadership: this will be led by the LIS ICT & digital team in conjunction with the

sub groups of the Skills Board working on each sector skills plan.

When: there is a need for a major programme over at least the next decade to

develop models of support which work for this challenge. Pilot projects should be

run in the next 2 years to identify how best to support employers and training

providers to deliver the training needed.

Resources and support: the scale of the upskilling challenge will continue to

grow as emerging technology impacts on more areas of the economy and as new

technology is developed. The replacement for structural funds, the UK Shared

Prosperity Fund, should be used to support upskilling of the existing workforce

alongside employer investment. Consideration should be given to whether for

larger employers the apprenticeship levy can also be aligned with this challenge.

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Annex 1 - Background to the Emerging Technology

Challenge

It is widely accepted that the economy is seeing a period of rapid change as

technology pervades virtually every aspect of the economy. Whilst clearly

technology has been with us for hundreds of years, starting with the industrial

revolution, most commentators suggest that we are now witnessing the start of the

4^th Industrial Revolution, or Industry 4.0.

The World Economic Forum (2016)¹² has defined the position as:

‘The First Industrial Revolution used water and steam power to mechanize

production. The Second used electric power to create mass production. The Third

used electronics and information technology to automate production. Now a Fourth

Industrial Revolution is building on the Third, the digital revolution that has been

occurring since the middle of the last century. It is characterized by a fusion of

technologies that is blurring the lines between the physical, digital, and biological

spheres.

There are three reasons why today’s transformations represent not merely a

prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and

distinct one: velocity, scope, and systems impact. The speed of current

breakthroughs has no historical precedent. When compared with previous industrial

revolutions, the Fourth is evolving at an exponential rather than a linear pace.

Moreover, it is disrupting almost every industry in every country. And the breadth and

depth of these changes herald the transformation of entire systems of production,

management, and governance.’

The World Economic Forum (2016) goes on to state that:

Like the revolutions that preceded it, the Fourth Industrial Revolution has the

potential to raise global income levels and improve the quality of life for populations

around the world. To date, those who have gained the most from it have been

consumers able to afford and access the digital world; technology has made possible

new products and services that increase the efficiency and pleasure of our personal

lives….

In the future, technological innovation will also lead to a supply-side miracle, with

long-term gains in efficiency and productivity. Transportation and communication

costs will drop, logistics and global supply chains will become more effective, and the

¹² World Economic Forum, Klaus Schwab (2016), The Fourth Industrial Revolution: what it means, how to

respond

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

cost of trade will diminish, all of which will open new markets and drive economic

growth.

At the same time, as the economists Erik Brynjolfsson and Andrew McAfee have

pointed out, the revolution could yield greater inequality, particularly in its potential to

disrupt labor markets. As automation substitutes for labor across the entire economy,

the net displacement of workers by machines might exacerbate the gap between

returns to capital and returns to labor. On the other hand, it is also possible that the

displacement of workers by technology will, in aggregate, result in a net increase in

safe and rewarding jobs.

We cannot foresee at this point which scenario is likely to emerge, and history

suggests that the outcome is likely to be some combination of the two….. This will

give rise to a job market increasingly segregated into “low-skill/low-pay” and “high-

skill/high-pay” segments, which in turn will lead to an increase in social tensions.

….. Technology is therefore one of the main reasons why incomes have stagnated,

or even decreased, for a majority of the population in high-income countries: the

demand for highly skilled workers has increased while the demand for workers with

less education and lower skills has decreased. The result is a job market with a

strong demand at the high and low ends, but a hollowing out of the middle.

This section of the World Economic Forum report neatly summarises the challenges

which many others have discussed in relation to Industry 4.0 or the 4^th industrial

revolution:

1. Will Industry 4.0 displace so many employees that it is impossible for the creation

of new, as yet unimagined, jobs or growth of new industries to replace the jobs

lost?

2. Or will the wave of productivity growth created drive an economic renaissance by

increasing the quantity, quality and value of jobs benefitting everyone?

History suggests that the second scenario is more likely, but others argue that this

time is different, not least because of the speed with which whole industries are

being transformed and the fact that this is happening across so many industries at

the same time.

Building on this earlier work the World Economic Forum published a report in 2018

on the Future of Jobs¹³. This states that:

The Fourth Industrial Revolution is interacting with other socio-economic and

demographic factors to create a perfect storm of business model change in all

¹³ World Economic Forum (2018), Insight Report: The Future of Jobs Report 2018, Centre for the New

Economy and Society

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industries, resulting in major disruptions to labour markets. New categories of jobs

will emerge, partly or wholly displacing others. The skill sets required in both old and

new occupations will change in most industries and transform how and where people

work. It may also affect female and male workers differently and transform the

dynamics of the industry gender gap.

A key issue for New Anglia (and all other economic agencies to address is):

• Whether to focus on meeting the demand for digital technology skills in the digital

and AME sectors with the aim of being World class at developing digital

technologies?

• Or, whether to focus on being World class at adopting digital technologies,

whoever developed them, so you can apply them across your whole economy

through equipping the workforce in every sector with the skills needed to be

digital pioneers?

There is no easy answer to this conundrum and as the World Economic Forum

suggests in relation to the impact of Industry 4.0, probably a combination of both

approaches is needed.

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What is Industry 4.0?

PWC (2018)¹⁴ defines it as: ‘Industry 4.0 encompasses end-to-end digitization and

data integration of the value chain: offering digital products and services, operating

connected physical and virtual assets, transforming and integrating all operations

and internal activities, building partnerships, and optimizing customer-facing

activities.’

Deloitte in The Industry 4.0 Environment¹⁵ stresses the point that Industry 4.0 brings

together multiple ‘smart systems’ which collectively are supported by internets of:

things; data; people; and, services (see figure 6). This provides a useful graphical

representation which shows the inter-dependency between sectors and participants,

which create some of the non-technical skills challenges which Industry 4.0 leads to,

including: the need for cross functional teams and working; integration skills; and,

innovation in working methods and organisational structures.

Figure 6 - Industry 4.0

¹⁴ PWC (2018), Digital Champions: How industry leaders build integrated operations ecosystems to deliver end-

to-end customer solutions

¹⁵ Vikram Mahldhar and David Schatsky: The Internet of Things. Deloitte University Press, 4^th September 2013

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Impact across the Economy

Whilst technology comes in many forms, many of the most disruptive changes

arising from the 4^th Industrial Revolution are focused on what has become known as

Industry 4.0, which brings together digital technologies with engineering to develop

autonomous systems with the potential to lead to rapid changes in job roles.

Most reports expect Industry 4.0 to impact across the economy with, potentially

substantial, impacts on how many people work and the types of skills employers will

need.

The development of Industry 4.0 will therefore increase demand for new skills and a

larger workforce in the sectors which supply the technology (e.g. through increased

demand for computer control, mechanised system suppliers etc.). The sectors

supplying these services are likely to grow their share of the economy as end user

companies and consumers buy products and services which allow them to adopt

Industry 4.0 solutions.

In end user sectors, industry 4.0 is likely to displace many existing job roles (as is

being seen in traditional retail as sales move online in the so called ‘retail

armageddon’¹⁶), but at the same time it will create new roles demanding new skills in

technology adoption and optimisation. This will create a big increase in the need for

workforce retraining and upskilling in end user companies.

A recent report on BBC News¹⁷ suggests that ‘The popularity of online shopping has

contributed to a near doubling in demand for warehouse space over the past 10

years’, citing figures from property research firm CBRE, which went on to state that:

’About 235 million square feet of warehouse space was leased or purchased

between 2007 and March 2018. That figure is up from about 130 million square feet

in the previous decade. About 60% of the space is now used by retailers, according

to CBRE.’

This clearly shows the impact that online sales is having right across the economy

and its potential, over time to change the high street, business parks and the jobs

roles that people fill in the economy.

¹⁶ In New Anglia, whilst no retail sector skills plan has been developed, the impact of technology led changes in

the retail sector could be profound given that Norwich in particular has developed a real strength as a regional

retail, top 20, centre in the UK to serve a large rural hinterland in the East.

¹⁷ BBC News online (27th August 2018), Online shopping drives demand for warehousing space

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Current end user sectors are likely to see a static or smaller workforce after adopting

industry 4.0, even whilst growing their economic output, but will need higher skill

levels and potentially new areas of in house skills to remain competitive. In end user

companies the key challenges will include needing the skills to:

• Adopt a ‘technology watch’ mentality so that the company understands what new

technologies may be appropriate to its processes;

• Redesign processes or change the organisation to allow new technologies to be

used;

• Specify areas in which new technology can be applied, so that they are ‘expert

clients’ when working with technology suppliers to design the most appropriate

solutions;

• Manage the technology adoption process including: adopting new business

models; financing capital investment (in lieu of revenue staff costs); supporting

process changes; supporting workforce development.

The combined affect across the economy is likely to be a period of rapid change with

potentially major economic and social challenges unless the skills system responds

proactively to these changes.

New Anglia has to embrace and invest in the future jobs which will fuel its economy

and has to do this at least as fast as other areas of the UK or wider World so that the

local economy remains competitive.

To address this challenge the emerging technology plan focuses on two parallel

strands to deal with this expected rapid increase in the use of digitally enabled

technologies across multiple sectors, by focusing on:

1. Meeting the demand for emerging technology skills in technology

supplying industries: this will focus primarily on how to ensure that New

Anglia’s Digital Tech, Advanced Engineering and Manufacturing and Digital

Creative sectors can work together to ensure they have the workforce and skills

to design, build, supply and maintain products and services which deliver

productivity growth in the wider economy. This will include focusing on areas in

which New Anglia can develop products and services which can be sold into

national and international markets;

2. Meeting the demand for skills to optimise the use of emerging technology

in end user sectors: this will focus on how to equip sectors which need to adopt

emerging technologies with the skills to remain competitive. To do this they will

need to acquire the skills to be ‘expert clients’ and to get the productivity gains

from the technologies which will be available to them. Major sectors where this is

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needed include: AgriFood Tech, Ports and Logistics, Life Sciences and the Bio-

economy, Energy, Construction and Health and Social Care.

Arguably for an economy such as New Anglia’s, the first focus on developing the

emerging technology sector itself, i.e. ‘suppling the picks and shovels’ for the

technology (gold) rush, is an important goal and can lead to economic growth,

particularly in areas where the region has globally significant R&D and innovation

capabilities (e.g. NRP for the life sciences and the bio-economy and Innovation

Martlesham for ICT and communications technology).

However, the second focus on ensuring that the wider economy has the skills to

embrace emerging technology, is also important as this will ensure that the whole

economy is able to make progress in delivering higher productivity, leading to growth

and competitiveness in New Anglia’s other key sectors.

The balance of the economy is clearly focused on end user companies and

employment (the second focus) and thus if the area only concentrated on the first

focus, the impact is likely to be modest and could indeed lead to major disruption

across swathes of the wider economy even if the region managed to develop and

market World class emerging technologies.

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The Evidence Base

The impact of emerging technology and Industry 4.0 on employment, productivity,

the workforce and the skills needed has received a lot of attention in the last 3-4

years and the number of reviews, reports and foresight exercises continues to rise

as more policymakers, business and employee groups become involved.

The review below brings together the evidence and conclusions from many of these

reports at the international, national and more local levels and then cross references

these with the evidence from the New Anglia sector skills plans developed during

2016-’18.

International Reports

The OECD (2018) report¹⁸ on automation, skills use and training found that:

• Across the 32 countries [studied], close to one in two jobs are likely to be

significantly affected by automation, based on the tasks they involve. But the

degree of risk varies. About 14% of jobs in OECD countries participating in

PIAAC are highly automatable (i.e., probability of automation of over 70%)…. In

addition, another 32% of jobs have a risk of between 50 and 70% pointing to the

possibility of significant change in the way these jobs are carried out as a result of

automation - i.e. a significant share of tasks, but not all, could be automated,

changing the skill requirements for these jobs.

In 2015 McKinsey Global Institute¹⁹ reported that: ‘for the applications that we size,

we estimate that the Internet of Things has a total potential economic impact of

$3.9 trillion to $11.1 trillion per year in 2025. On the top end, the value of this

impact—including consumer surplus—would be equivalent to about 11 percent of the

world economy in 2025’. It predicted that interoperability could enable gains of 40%

in system efficiency, reduce the costs of human disease treatment by as much as

50% and using real time data to predict maintenance needs could reduce downtime

by 50%.

In 2018, McKinsey reported²⁰ that: ‘we expect productivity growth to recover and see

the potential for at least 2 percent growth a year over the next ten years, with

60 percent coming from digital opportunities’.

¹⁸ OECD, Ljubica Nedelkoska and Glenda Quintini, Directorate for Employment, Labour and Social Affairs

Employment, Labour and Social Affairs Committee (14^th March 2018), Automation, skills use and training

¹⁹ McKinsey Global Institute (2015), The Internet of Things: Mapping the Value Beyond the Hype

²⁰ McKinsey (2018), Solving The Productivity Puzzle: The Role of Demand and the Promise of Digitization

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World Robotics reported²¹ that in 2016:

• Robot sales increased by 16% to 294,312 units, a new peak for the fourth year in

a row.

• There are five major markets representing 74% of the total sales volume in 2016:

China, the Republic of Korea, Japan, the United States, and Germany. Since

2013 China has been the biggest robot market in the world with a continued

dynamic growth.

• It predicted that in 2018 the UK will buy 2,000 industrial robots, against 21,500 in

Germany (the most in Europe), with the US buying 38,000 and China installing an

anticipated 140,000 robots.

World Robotics²² predicted that the largest markets for service robotics in 2018-2020

would be in four sectors:

• Medical: $7.8billion

• Logistics: $5.9billion

• Field use: $4.2billion

• Defence: $3.6billion

McKinsey Global Institute in a June 2018 paper²³ for the French Presidency

predicted that:

•

‘as AI and automation bring benefits to business and society, we will need to

prepare for major disruptions to work. About half of the activities (not jobs) carried

out by workers could be automated. Our analysis of more than 2000 work

activities across more than 800 occupations shows that certain categories of

activities are more easily automatable than others. They include physical

activities in highly predictable and structured environments, as well as data

collection and data processing. These account for roughly half of the activities

that people do across all sectors. The least susceptible categories include

managing others, providing expertise, and interfacing with stakeholders.’

•

‘about 30 percent of the activities in 60 percent of all occupations could be

automated. This means that most workers—from welders to mortgage brokers to

CEOs—will work alongside rapidly evolving machines’.

²¹ International Federation of Robotics (2017), Executive Summary World Robotics 2017 Industrial Robots

²² International Federation of Robotics, (2017), Why service robots boom Worldwide, IFR press conference

Brussels 11^th October 2017

²³ McKinsey Global Institute (2018), AI, Automation, and the Future of Work: ten things to solve for,

Briefing note prepared for the tech4good summit, organized by the French Presidency June 2018

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•

‘we have found that around 15 percent of the global workforce, or about

400 million workers, could be displaced by automation in the period 2016-30’, but

said that ‘additional economic growth, including from business dynamism and

rising productivity growth, will also continue to create jobs. Many other new

occupations that we cannot currently imagine will also emerge’.

•

‘jobs changed: More jobs than those lost or gained will be changed as machines

complement human labor in the workplace Partial automation will become more

prevalent as machines complement human labor. For example, AI algorithms that

can read diagnostic scans with a high degree of accuracy will help doctors

diagnose patient cases and identify suitable treatment’.

This summary report built on more detailed work in other McKinsey reports

including²⁴:

•

‘Our research finds that the strongest growth in demand will be for technological

skills, the smallest category today, which will rise by 55 percent and by 2030 will

represent 17 percent of hours worked, up from 11 percent in 2016. This surge will

affect demand for basic digital skills as well as advanced technological skills such

as programming. Demand for social and emotional skills such as leadership and

managing others will rise by 24 percent, to 22 percent of hours worked. Demand

for higher cognitive skills will grow moderately overall, but will rise sharply for

some of these skills, especially creativity.’

•

‘Some skill categories will be less in demand. Basic cognitive skills, which include

basic data input and processing, will decline by 15 percent, falling to 14 percent

of hours worked from 18 percent. Demand for physical and manual skills, which

include general equipment operation, will also drop, by 14 percent, but will remain

the largest category of workforce skills in 2030 in many countries, accounting for

25 percent of the total hours worked. Skill shifts will play out differently across

sectors. Healthcare, for example, will see a rising need for physical skills, even as

demand for them declines in manufacturing and other sectors.’

•

‘Companies will need to make significant organizational changes at the same

time as addressing these skill shifts to stay competitive. A survey of more than

3,000 business leaders in seven countries highlights a new emphasis on

continuous learning for workers and a shift to more cross-functional and team-

based work.’

•

‘Competition for high-skill workers will increase, while displacement will be

concentrated mainly on low-skill workers.’

²⁴ McKinsey Global Institute (2018), Skill Shift Automation and the Future of the Workforce

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• In 2014 PWC²⁵ reported that based on a survey of 120 manufacturers in the US:

28% believe that replacement of workers will be the biggest impact of robots on

the US manufacturing workforce in the next 3-5 years; but, 35% believe the

biggest impact will be the creation of new job opportunities to engineer advanced

robots and robotic operating systems.

Figure 7 - source: McKinsey, Skill Shift Automation and the Future of the

Workforce (2018)

This dichotomy on the prospects for jobs was also found in Jobs Lost, Jobs Gained

(2017)²⁶, in which McKinsey & Company argues that: 15% (midpoint estimate) of

current jobs will be lost to automation, but that the proportion varies widely between

countries and industries, with on balance more jobs likely to be affected in countries

and industries where industry is more developed and wages are higher (such as the

UK). They expect the overall economy and the demand for workers to grow, due to

economic growth, but as with other reports argue that these changes ‘will challenge

current education and workforce training models, as well as business approaches to

skill-building’. They suggest that the change seen in the economy could be faster

and more profound than in previous industrial revolutions and will require major skills

initiatives to enable the response to keep pace with the changes seen.

In AI, Automation and the Future of Work, McKinsey (2018)²⁷ stated that a key

area for change was: ‘Evolving educational systems and learning for a changed

²⁵ PWC (2014), The New Hire: How a New Generation of Robots is Transforming Manufacturing

²⁶ McKinsey Global Institute (December 2017), Jobs Lost, Jobs Gained: Workforce Transitions in a Time of

Automation

²⁷ McKinsey Global Institute (June 2018), AI, Automation and the Future of Work: ten things to solve for

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workplace. Policy makers working with education providers (traditional and non-

traditional) and employers themselves could do more to improve basic STEM skills

through the school systems and improved on-the-job training. A new emphasis is

needed on creativity, critical and systems thinking, and adaptive and life-long

learning. There will need to be solutions at scale.’

World Skills Russia²⁸ identified three layers of nested (like Russian Dolls) skill sets

needed to effectively deliver Industry 4.0:

• Inner layer - Hard skills: Design; Programming CPS (Cyber-physical systems)

dispatching; CPS maintenance; Data management; Knowledge transfer and

usage; Quality control

• Middle layer - Soft skills: Communcation; EQ (emotional intelligence); Safety

skills; Collaboration (human-human and human-machine); Problem identification

& solving

• Outer layer - Metaskills: Environmental intelligence (sustainability); Sustainability

skills (Green including recycle); Continuous learning; Multidisciplinary transfer,

creativity; Adaptivity.

The development of Industry 4.0 is being assessed across the World and a report for

the BRICS²⁹ economies in 2016, specifically focused on whether these economies

have the skills so that they were ready to adopt the potential offered by Industry 4.0.

It concluded that more work was needed to improve: the quality of course content

and trainers; align with World Skills so that vocational education in the skills needed

to drive Industry 4.0 was given more recognition.

EU Report and Initiatives

In a report for the European Parliament in 2015³⁰, it was noted that: ‘the nature of

manufacturing work has been shifting from largely manual labour to programming

and control of high performance machines. Employees with low skill levels risk

becoming replaceable unless they are retrained. On the other hand, workers able to

make the transition to Industry 4.0 may find greater autonomy and more interesting

or less arduous work.’

They also reported that more creativity and decision-making skills were required as

well as technical and ICT expertise. They predicted that by 2020, labour markets in

²⁸ World Skills Russia, Future Skills: Skills for Industry 4

²⁹ BRICS India 2016, FICCI and Roland Berger (2016), Whitepaper: Skill Development for Industry 4.0,

BRICS Skill Development Working Group (The BRICS are: Brazil, Russia, India, China, South Africa)

³⁰ European Parliamentary Research Service (EPRS), Author: Ron Davies (2015) Industry 4.0 Digitalisation for

productivity and growth, EN PE568.337

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the EU could be short of as much as 825,000 ICT professionals, but reported

concerns that young people may not necessarily be interested by the digitalisation of

the workplace: in one survey only 13% of young adults in Germany would definitely

consider a career in ICT despite the majority view that the sector offered the best job

prospects.

The EU has also promoted eSkills to reduce shortages of workers with ICT skills,

including a multi-stakeholder partnership called the Grand Coalition for Digital Jobs

to make ICT education more attractive and better aligned to industry needs.

The partnership for robotics in Europe, SPARC, is the largest research and

innovation programme in civilian robotics in the world. It was launched in 2014 by

the joint public-private partnership between the European Commission, the robotics

industry and academia. Investments are expected to reach €2.8 billion with €700

million in financial investments coming from the European Commission under

Horizon 2020 over 7 years.

In a recent paper published by SPARC, the question of whether robots will reduce

employment was addressed³¹ and it stated that ‘robots perform tasks, not jobs’. This

distinction is interesting as the paper points out that most jobs require workers to

have more than one skill and therefore argues that it ‘makes sense to think of robots

as tools that can be used by people in their workplace, ideally helping with the dull,

dirty, or dangerous tasks and boosting productivity. This has spurred a new area of

collaborative robots, or cobots, that are easy to work with’.

National Reports

In September 2018 the Migration Advisory Committee (MAC)³² report on EEA

Migration in the UK was published. This recommended that post Brexit the UK

should focus on high skilled migration and not low skilled, with migrants from both

Europe and other countries treated equally. It proposed that the salary level for

migrants should be set at £30,000 and below this the only sector where it suggested

some low paid migration maybe allowed was for seasonal agricultural work (it is

worth noting that DEFRA have announced a pilot on low paid seasonal agricultural

workers from April 2019, but will only issue 2,500 visas in the first season - widely

reported as being only circa 2% of the total needed by the industry).

Given that the majority of migrants working in New Anglia (with the exception of

those in R&D, Universities and offshore energy), and indeed the average local wage,

³¹ SPARC (9^th August 2018), Robots and Jobs

³² Migration Advisory Committee (2018), EEA migration in the UK: Final report

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are both below £30,000, this suggests that there is, if these proposals are adopted,

unlikely to be access to future migration to fill most roles currently occupied by

migrants.

The initial government response to this MAC report suggests that these proposals

are likely to be adopted. The need for new labour saving technologies, particularly

for lower paid roles is therefore likely to become even more important than some

reports have suggested.

In the Future of Skills: Employment in 2030³³, NESTA states that:

•

‘THE FUTURE DEMAND FOR OCCUPATIONS - We predict that around one-

tenth of the workforce are in occupations that are likely to grow as a percentage

of the workforce. Around one-fifth are in occupations that will likely shrink. This

latter figure is much lower than recent studies of automation have suggested.

This means that roughly seven in ten people are currently in jobs where we

simply cannot know for certain what will happen. However, our findings about

skills suggest that occupation redesign coupled with workforce retraining could

promote growth in these occupations.’

NESTA also says:

• We find that many of the jobs likely to experience a fall in employment are,

unsurprisingly, low- or medium-skilled in nature. However, in challenge to some

other studies, not all low- and medium-skilled jobs are likely to face the same

fate;

• In general, public sector occupations — with some exceptions — feature

prominently and are predicted to see growth.

• We also expect buoyant demand for some — but not all — professional

occupations, reflecting the continued growth of service industries.

NESTA’s conclusions on what this means for skills are:

• We find a strong emphasis on interpersonal skills, higher-order cognitive skills

and systems skills in both the US and the UK;

• We show that the future workforce will need broad based knowledge in addition

to the more specialised features that will be needed for specific occupations;

• Complementary skills that are most frequently associated with higher demand are

customer and personal service, judgement and decision making, technology

design, fluency of ideas, science and operations analysis.

³³ NESTA (2018), In the Future of Skills: Employment in 2030

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This report is consistent with others, in showing that the future demand for skills is

uncertain in magnitude and speed and will have different effects on different sectors

and roles within each sector. However, the overall conclusions are reported as

being clear, with a trend towards inter-disciplinary and higher level skills increasing in

importance, whilst across the economy the demand for lower skill levels and single

disciplines is likely to decline.

On 6^th August 2018 the Fabian Society and Trade Union Community launched a 2

year commission into Workers and Technology³⁴ chaired by Yvette Cooper MP

(chair of the House of Commons Home Affairs Select Committee), with the

publication of new evidence on British workers‘ hopes and fears for automation over

the next decade. Their initial evidence shows that (online survey of over 1,000

workers):

• Overwhelmingly, workers are positive about their own ability to navigate change:

73% are confident they will be able to change and update their skills if new

technology affects their job. After learning about how technological changes will

affect the workplace, over half (53%) are optimistic about their future working life

and job prospects.

• However, a significant minority are anxious about the impact of automation over

the next 10 years: 37% of workers (i.e. 10 million people) are worried their job will

change for the worse; and 23% of workers (i.e. 6 million people) are worried that

their current job may no longer be needed.

Few workers think the government, employers or trade unions are taking action to

support workers as technologies change: only 9% of workers think that the UK

government is taking steps to prepare them for new workplace technologies; only

16% of employees with a trade union in their workplace think that their unions are

taking steps to help ensure that new technologies improve their working life; and,

only 27% of employees think their employer is taking action to prepare them for

changes.

An RSA commission has recently been set up on the future of work in farming, food

and sustainable rural economies³⁵. This has yet to report any findings but is looking

nationally at the challenges created by the all the structural and technology

challenges in the sector.

³⁴ Fabian Society (2018), Workers and Technology https://fabians.org.uk/workers-and-technology/

³⁵ RSA Food and Farming Commission (2018), The Future of Work in Food, Farming and Sustainable Rural

Economies: Discussion Paper

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The Industrial Strategy (2017)³⁶ sets an overall government vision for the UK

economy and outlines key ways in which the UK needs to prepare itself for the

future. Published in 2018, it tackles the issues created by Brexit and aims to make

the UK more competitive to drive exports and trade post Brexit. It promotes

apprenticeships, investment in technical education and a major focus on STEM skills

to address the shortages of technical skills in across a wider range of technology

intensive sectors.

The Technology and Innovation Futures report³⁷ (2017), published alongside the

Industrial Strategy White Paper, noted that ‘The greatest future opportunities lie in

enabling existing and emerging technologies to interact with each other’.

Furthermore, it identified that Government should make early interventions in its role

as ‘Skills planner - Prepare for growing demand for workers with multi-disciplinary

technical skills, and mitigate the impact of robots and machine learning replacing

unskilled and graduate-level roles’, and noted that: ‘other countries are similarly

engaged, such as Singapore, which has gained a leading international position in

information technology through ensuring a pipeline of highly skilled workers’.

The Made Smarter Review³⁸ (formerly the Industrial Digitalisation Review) was

published in autumn 2017 and considered how digital technologies in all forms will

impact UK industry. It calculated that embracing the transformative power of

digitalisation has the potential to increase UK GVA by £455bn (cumulative) over the

next decade by improving productivity, reducing waste and developing new markets.

The review included a cross cutting theme of skills, which was a recurrent theme in

all the consultations held for the review.

The Centre for Economic Performance (supported by ESRC, the Economic and

Social Research Council) produced a report on Robots at Work in 2015³⁹ which

looked at the potential for robots to delivery economic gains. They concluded that:

the likely contribution of robots on future growth is substantial.

Localis In the Place of Work (2017)⁴⁰, suggests that of 47 local authorities studied

in England Suffolk was ranked 46^th and Norfolk 33^rd most exposed to the aggregate

risk from four structural labour market risks: migrant labour supply, automation of

manual jobs, skills base and demographics. Norfolk at 43^rd and Suffolk at 45^th (out

³⁶ HMG (November 2017), Industrial Strategy: Building a Britain Fit for the Future,

³⁷ HMG, Office for Science (2017), Technology and Innovation Futures

³⁸ HMG (2017), Made Smarter Review

³⁹ Georg Graetz and Guy Michaels (2015), CEP Discussion Paper No 1335 March 2015 Robots at Work

⁴⁰ Localis, Liam Booth-Smith and Joe Fyans (2017), In Place of Work, Influencing local labour markets

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of 46) on the skills base ranking is reported to have particular challenges in the

availability of skills to respond to changes in the economy.

The Impact of AI in UK Constituencies⁴¹ (2017) looked at where in the UK would

be most affected by automation, with the South West Norfolk and Suffolk Coastal

constituencies predicted to be the most affected in New Anglia as they have more

staff in likely to be automated low skill jobs. The study found that between 22-39% of

the workforce of every constituency would be affected by automation and argued

that: ‘UK government should: develop smart, targeted strategies to address future

job displacement …. The importance of targeting these interventions to those at

most risk cannot be overemphasised. Such interventions could include supporting

businesses to retrain employees and providing financial and psychological support to

people impacted.’

The same themes have been picked up by the Engineering Employers Federation

(EEF) in a series of recent reports including:

•

In An Up-Skill Battle⁴² EEF (2016) reported that ‘we will struggle to find a

sufficient number of candidates to satisfy the demands of our sector, and too

many candidates lack the skills that manufacturers need’. The report identifies

that 49% of employers already think UK productivity is lagging competitors and

recommends greater focus on management, technical and production skills to

address this. This report argues for supporting more young people to take

apprentices and for ‘an integrated approach to skills, both vocational and

academic, which has so far eluded the UK’.

•

In September 2017 the EEF⁴³ predicted the development of an ‘hourglass’

economy with a growth in higher skilled jobs at expense of those in the ‘middle’,

and predicted that 54% of all jobs in the engineering sector would need L4+ skills

by 2024. They also highlighted that 76% of engineering employers employed at

least one migrant, with the current workforce comprising 87% UK nationals, 11%

from other EU states and 2% from outside the EU. It also noted that employers

had already seen a reduction in job applications from EU nationals and an

increase in EU nationals leaving their jobs.

•

In The 4^th Industrial Revolution: a primer for manufacturers⁴⁴ the EEF

reported that 80% of manufacturers thought that the 4^th Industrial Revolution

⁴¹Future Advocacy (2017), The Impact of AI in UK Constituencies

⁴² EEF (2016), An Up-Skill Battle: EEF Skills Report 2016

⁴³ EEF (15^th September 2017), Richard Halstead, State of UK Manufacturing and Brexit, Greater Lincolnshire

Manufacturing Conference

⁴⁴ EEF (2016), The 4th Industrial Revolution: a primer for manufacturers

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Regional Reports

The East of England Science and Innovation Audit (SIA)⁴⁵, identified four sectors

as regional strengths: life sciences; agritech; ICT; advanced manufacturing &

materials. However, it stated that the real potential for economic growth lay in the

overlaps and called for investment in inter-disciplinary skills e.g. the chapter for

advanced manufacturing and materials stated that: ‘The sector is in the process of

being transformed - particularly through digitalisation’.

The SIA executive summary also identified digital & ICT skills as central to the

delivery of all four themes & regional growth: ‘There is an overarching requirement to

address major issues relating to skills - particularly … data science & computer

science…. found shortages across all four Themes …. the scale of the problem is

such that unless addressed, it will stymie business growth’. Under overarching

technology trends, the SIA also notes that: ‘Intelligent manufacturing …. Industry 4.0

involves pervasive digitalisation’.

The New Anglia Economic Strategy⁴⁶ (2018) targets a 2% average increase in

annual GVA to 2036, with productivity growing by 1% per annum and 0.5% growth in

jobs per annum, supported by increasing the workforce with NVQ L3+ to 66% by

2036. The strategy also recognises that ‘many of our growth opportunities involve

collaboration and partnership between firms in different sectors’.

The New Anglia Advanced Manufacturing and Engineering Sector Growth Strategy⁴⁷

(2017) focused on six areas to drive sector growth:

• Financially backing the sectors as drivers of economic growth;

• Embed supply chains and knowledge locally;

• Bring together businesses in special interest groups;

• Improve the infrastructure across Norfolk and Suffolk;

• Increase the engagement between schools and businesses;

• Focus on New Anglia’s emerging sub-sectors.

⁴⁵ East of England Science and Innovation Audit (2017)

⁴⁶ New Anglia LEP (2018), Norfolk and Suffolk Economic Strategy: a strategy for growth and opportunity

⁴⁷ Hethel Innovation, NAAME Sector Group (2017), Norfolk and Suffolk Sector Growth Strategy: Advanced

Manufacturing and Engineering

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Annex 2 - New Anglia Sector Skills Plans & the Adoption of

Emerging Technology

During 2016-18 New Anglia LEP developed 10 sector skills plans to identify, at

sectoral level, the way in which sector growth or changes in job roles may affect the

demand for skills and the degree to which current provision will meet future

workforce needs. A further three plans, including this Emerging Technology plan are

in development.

Each plan concludes with a series of recommendations for the areas in which new

initiatives or additional investment is required to ensure that future skills provision

meets employers’ needs for workforce and skills.

These plans covered the following sectors:

• Primarily technology providing sectors which supply technology to other

industries:

• Digital Tech

• Life Sciences and the Bio-economy

• Advanced Manufacturing and Engineering

• Predominantly sectors which use technology, much of which comes from other

sectors:

• Construction

• Health and Social Care

• Agri Food Tech

• Energy

• Ports and Logistics

• Financial and Insurance Services

• Cultural sector

• A plan for the Digital Creative sector is still in development

In addition a Cross Cutting Report⁴⁸ was produced which brought together common

themes from the individual sector skills plans. This concluded that:

‘Across Norfolk and Suffolk we will support individuals and businesses to

maximise their potential through: digital literacy; strategic application of digital

technology; investing in and realising the economic and human potential from

Industry 4.0 technologies such as Artificial Intelligence and Robotics’

⁴⁸ New Anglia (2018), Norfolk and Suffolk Cross-Cutting Skills Report

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New Anglia LEP

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The section below highlights the key findings from the individual LEP sector skills

plans which relate to the skills challenges arising from the development and adoption

of emerging technologies:

Digital Tech

The New Anglia Digital Tech plan⁴⁹, not surprisingly, focuses almost exclusively on

challenges which are relevant to the Emerging Technology skills plan. The key

findings were:

• Nationally, the 2017 TechNation Report50 highlights that the Digital Economy is

growing twice as fast as the wider economy, with an economic output of

approximately £100 billion per year. The Digital Tech sector has been placed in

the centre ground of driving UK competitiveness, with the emerging Industrial

Strategy and the emerging UK Digital Strategy. It is recognised as a sector that

is a driver for innovation and economic growth and an enabler for a digitally

fluent, more resilient economy.

• New Anglia’s Digital Tech sector is diverse and productive, with a total

employment base of 16,600, up nine per cent since 2010, and a GVA of around

£1.3bn. Employment opportunities in the region are increasingly requiring higher

skills, creating even greater demand for qualifications at degree level and above.

As well as businesses that self-define as Digital Tech, this plan recognises Digital

Tech professionals employed across all sectors in the area. There is an

expanding digital economy across New Anglia, involving marketing, finance,

public services and tourism, and recruitment opportunities for digital workers with

transferable digital skills are set to accelerate according to replacement demand

forecasts. Also, there is significant demand for competencies across marketing

and sales within a Digital Tech environment and this is set to increase.

Life Sciences and the Bio-economy

The New Anglia LEP Sector Skills Plan - Life Sciences & Bio-economy (2017)51

focused heavily on the need to commercialise the region’s strong life sciences R&D

base and recognised that to achieve this the industry needed to embrace advanced

manufacturing skills drawing on emerging technology. Specifically it identified that:

⁴⁹ New Anglia LEP (2017), Digital Tech, A Skills Plan for New Anglia, Putting skills at the heart of building a

competitive and sustainable local economy, November 2017

⁵⁰ TechNation 2017, TechCity

⁵¹ The New Anglia LEP Sector Skills Plan - Life Sciences & Bio-economy (2017), Enabling Growth in the

New Anglia Life Sciences & Bio-Economy Sector through Skills Development, 2017-’25, November 2017

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

• Industry 4.0/Internet of Things is now ubiquitous in health care, the food chain,

the environment and resource sectors and requires a step change in skills

provision. The demand for staff who combine life sciences with data

management and technology skills is growing at every level

ICT and Digital

• The use of data analysis and big data platforms is at the heart of the life sciences

and bio-economy research and commercial deployment. Consultees reported

that staff with skills in both biological sciences and ICT/data were in particular

demand and commanded much higher salaries than staff who only had one of

these two skill sets.

• Big data analytics and digital sensors are leading to the Internet of Things (IoT),

which is being taken up in the NHS (to monitor health); in bio-processing to

monitor production and in the agrifood sector to monitor agriculture and food

production. Consultees reported that the uptake of these types of technology

was being hampered by a shortage of staff who could apply ICT and digital skills

in practical contexts in industry.

Advanced Manufacturing

• Consultees reported that a big limitation in growing the life sciences and bio-

economy sector in New Anglia was the need for process engineering skills which

they considered to be weak in Norfolk and Suffolk. As sectors such as bio-

refining, bio-materials and medtech grow engineering and advanced

manufacturing skills are essential to take innovative products to market in a cost

effective way.

• Consultees saw the need to develop process engineers with specific skills in

designing, scaling up and running plants which process biological raw materials.

Advanced Manufacturing and Engineering

The New Anglia LEP Sector Skills Plan for Advanced Manufacturing & Engineering

(2018)⁵², had digitalisation as a major cross cutting theme, which would both enable

the sector itself to be more competitive and productive whilst delivering new services

to other sectors. It specifically identified that:

• The sector is, however, facing significant challenges in meeting its future

workforce and skills needs and expected changes in the industry are likely to

⁵² New Anglia LEP Sector Skills Plan for Advanced Manufacturing & Engineering (2018)52, Enabling Growth

in the New Anglia Advanced Manufacturing & Engineering Sector through Skills Development, 2018-’25,

January 2018

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

exacerbate this challenge. Notably the engineering and manufacturing sectors

are on the cusp of widespread adoption of new technology, often called Industry

4.0 or the 4th Industrial Revolution, through which traditional engineering is

becoming intimately entwined with sensors, automation and ICT.

• These changes in the context for the industry are an enormous opportunity and

one which we know will change the skills we need, probably ultimately in ways

we have not yet even considered. As with earlier industrial revolutions the prize

is economic growth, better and safer working conditions and enhanced life

opportunities, but Norfolk and Suffolk are not alone in the race to adopt this new

technology.

• The skills that our existing workforce have and continue to develop will help us

lead this process of change, but we also need to attract many more young people

by helping to describe clearly how a career in our industry is dynamic and has

real prospects. If we are right about Industry 4.0 these prospects will not only be

in the traditional AME sector, the skills we have in manufacturing and engineering

will also be enablers of change right across the economy, from health care to

transport to food production and science.

Throughout the consultation process it was clear that employers and providers

shared a view that the demand for AME skills was likely to see a step change in

three important ways:

• Total demand - the total demand for AME skills will increase as the use of

automation and robotics, self-driving vehicles and other similar developments

advance;

• New Skills and Combinations of Skills - the nature of the skills needed will

change quickly as technology advances and boundaries between disciplines

become blurred;

• Diversify into new sectors - as the demand for AME solutions moves into new

sectors (e.g. health care) and affect the demand for skills and employees with

AME skills across many other industries.

Consultees felt that incremental, organic growth of training and skills provision was

likely to mean that the current shortage of AME skills becomes a crisis and

constrains future growth of the sector.

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New Anglia LEP

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Agri Food Tech

The New Anglia LEP Sector Skills Plan - AgriFood Tech (2017)⁵³ identified that

emerging technology is a major driver of change in the food chain both locally and

internationally as the sector tries to develop its productivity sustainable. It

specifically identified:

Labour Substitution Through Automation - the industry is rapidly adopting new

technology enabled by digital technology, sensors, data analysis, robotics and

control systems. This may reduce the workforce needed for the same level of output

and could thus be expected to cost jobs, but will also address key local weaknesses

by raising labour productivity and creating higher skilled, higher paid jobs. If this

development improves competitiveness of the New Anglia AgriFood Tech sector it

may also lead to growth of the sector through import substitution and growth in

exports. It could also help the industry address challenges created by a lack of

supply of labour, rising wage costs and potential further restrictions on supply post

Brexit. However, this will create skills challenges including:

• Skills for engineering, soft robotics, artificial intelligence (AI), data are growing in

importance and more supply will be needed to meet industry needs;

• An agile workforce with higher level technical skills will be needed given the

speed of change in the industry;

• There will be a need for applied research and skills in new disciplines such as

acoustics and vibration sensors to identify problems early in mechanised systems

to allow timely remedial action to be taken.

The skill set that unites all these areas is the need for skills in the collection,

manipulation, presentation and use of data. Employers reported that current maths

performance is poor for those entering the industry from school and, that even those

with degrees in data focused disciplines, often struggled to apply their knowledge to

business problems.

The need for data skills supports AgriFood Tech companies in assessing markets,

driving production efficiency and managing their businesses.

The growth in demand for technical and data skills will also need to be underpinned

by a supply of soft skills in leadership, management and project working, to enable

⁵³ New Anglia LEP Sector Skills Plan - AgriFood Tech (2017), Enabling Growth in the New Anglia AgriFood

Tech Sector through Skills Development, 2017-’25, Submitted to the New Anglia Food, Drink & Agriculture

Board in September 2017

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Emerging Technology Sector Skills Plan, February 2019

new production systems or the use of data to support decisions to be integrated into

the workplace.

Energy

The New Anglia Energy Sector Skills Plan 2018⁵⁴ highlighted that:

• There is a growing demand for intelligent sensoring solutions to regulate heat,

lighting, power output/generation and consumption - linked to plugs, domestic

sensor units with digital capture and transmission technologies

• Employers highlighted the need for the workforce to demonstrate greater

transferability of skills between digital, surveying, engineering/manufacturing and

maintenance services. Key examples include:

o The transition from CAD to GIS cloud / thin client web based mapping

systems for marine surveying, including an increasing use of drone

technology. Surveying practice is becoming increasingly sophisticated

through digital and automation technologies;

• The growing importance of aligning advanced manufacturing and engineering

with energy in the context of Industry 4.0, particularly on the back of the

increasing use of digital and cloud based technologies

Ports and Logistics

The Ports and Logistics sector skills plan⁵⁵ noted that:

• Change in the industry is being enabled by digital technologies to plan logistics

(e.g. backloading, most efficient routes and rerouting, geofencing, load

optimisation etc), energy efficiency (storage and transport) and, it is expected,

that further major changes will occur in the next decade for example through the

potential widespread adoption of autonomous and/or electric vehicles.

• Automation of vehicles and warehousing is already beginning to be seen in the

sector. Whilst there are different views about how quickly the transition to

automation will occur, there is a broad consensus that in some areas automation

will have a large impact by 2023, whilst other areas may take longer. The cost

and efficiency savings which automation can bring will ultimately drive adoption

rates, but will be contingent on the availability of skills to design, develop, install

and operate these new systems

⁵⁴ New Anglia LEP (2018), ENERGY SECTOR SKILLS: A Skills Plan for New Anglia, Putting skills at the

heart of building a competitive and sustainable local economy, March 2018

⁵⁵ New Anglia LEP (2018), Enabling Growth in the New Anglia Ports & Logistics Sector through Skills

Development 2018-’25, A Skills Plan for New Anglia, March 2018

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Subsequent to the LEP Ports and Logistics Sector Skills Plan the Government Office

for Science (2019) had released a report⁵⁶ on how emerging technologies may affect

the freight sector. This looked at 7 technologies including: cloud computing; Internet

of Things (IoT); social media networks; Artificial intelligence (AI); big data analytics;

immersive technologies; and, distributed ledger technology (DLT). This review

concluded that:

‘These technologies were found to enable smart and digitalised applications and

to support various practical, sector-specific activities, such as digital rail, smart

motorways and smart port programmes. These and similar digital applications

have great potential to enhance the sustainability of transport in respect of its

physical, environmental, economic and social dimensions. However, with the

exception of cloud computing and IoT, the review found limited empirical

evidence to demonstrate the value created by these technologies for freight,

mainly due to their early stage of deployment in this sector’

This need for further work to understand the impact of emerging technologies is

common across all sectors.

Financial and Insurance Services

The New Anglia sector skills plan for financial and insurance services (2018)⁵⁷ noted

that:

• Support digital tech capability, (which is increasingly important given digital

automation across key parts of the sector).

• To this end there is a significant crossover skills ‘relationship’ to foster between

the sector and digital technology, with the New Anglia ‘Digital Tech’ skills plan

activity led by TechEast, aiming to better define and influence the supply of skills

for the New Anglia area. This will be an important link to the Financial Services

and Insurance sector skills plan.

• Overall employers highlighted the increasing impact that digital automation has

had on consolidating and restructuring services into accounts (often by industrial

sector for commercial banking) and area based roles, with general ‘digital literacy’

needed to provide appropriate advice and customer management. Technical

capability for larger businesses is often retained within the employer through

⁵⁶ Dr Yingli Wang (2019), Understanding the impact of emerging technologies on the freight sector,

Government Office for Science

⁵⁷ New Anglia LEP (2018), Financial Services & Insurance Sector, A Skills Plan for New Anglia, Putting skills

at the heart of building a competitive and sustainable local economy, March 2018

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

specialised IT contractor roles and through an increasing need to provide digital

data analysis, using cloud based solutions.

•

Digital AI (artificial intelligence) for the insurance industry means that claim

handling and renewals will increasingly be issued automatically, including some

initial underwriting considerations.

•

Across the board concern for the mismatch between changing skills demands

and ‘softer skills’ output- with digital automation impacting on the nature of

business services being far more relationship management and account

management focused for the client and less focused on compliance and

administration.

•

Financial technology- known as ‘FinTech’ describes a business that aims to

provide a service financial service- directly to the end customer or to a business

client, which makes use of digital modern technology. In 2017 KPMG reported

that around 42% of global financial services firms have a fintech strategy⁵⁸, in

reflection to the increasing demand of customers wanting to access their financial

services online and on their mobile devices.

•

KPMG report: “At the rate the industry is evolving, financial products and services

- and the technological infrastructure behind them - will look remarkably different

in a decade. Financial institutions that take the time to define their fintech strategy

and align it to their future vision and business goals will be best positioned to

forge the future of financial services.”

•

Key facts made available through the FCA highlights the extent to which

digitisation of products and services has played a significant role shaping the

overall service offer for the industry, impacting on functional roles and skills

requirements- 53% of payments are made electronically (2015), with a 228%

increase in contactless payments⁵⁹. In 2013 Ernst and Young reported that

globally there are approx 7 billion mobile subscriptions and that 57% of insurers

were aiming towards the development of a ‘digital business case’ to respond the

fundamental demand for online product channels.⁶⁰

•

Although the employer consultation highlighted a view of ‘levelling off’ for SMEs

within the sector in terms of digital technology and automation- particularly within

the financial advice and planning industries- the extent to which fintech is seen as

a key catalyst for driving competitiveness for the sector as a whole and in turn the

skills demands to support it- should not be overlooked. Norwich as a business

cluster for the sector- is already highlighting the important relationship between

⁵⁸ KPMG 18^th October 2017- FinTech Strategy- Forging the Future

⁵⁹ UK Payments Markets 2016, Payments UK

⁶⁰ Ernst & Young, 2013- Insurance in a Digital World

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the financial services industry and the creative digital industry, which also has a

significant presence. There is already an ‘industrial heritage’ between

contactless payment and the initial application and testing development through

Norwich enterprises, with firms like AVIVA also championing the role that creative

digital enterprises can play in diversifying the reach of financial services across

online, app and mobile technology. AVIVA also cite UEA’s role in the sourcing of

suitably qualified ‘web app’ programmers, more than any other UK HEI.

Cultural Sector

The cultural sector skills plan noted that a cross-cutting theme seen by stakeholders

as providing a direction across the whole skills plan was digitalisation: embracing of

technology with the understanding and practical skills to exploit it for artistic,

commercial and community benefit.

The Independent Review of the Creative Industries⁶¹ noted that the Creative

Industries are also enablers to other industries. Not only is there is significant

overlap between the creative and digital sectors (for instance the IT, software and

games sub-sector contribute almost 40% of the GVA of the Creative Industries) but

the wider creative economy - industries which include creative roles - also has a far

larger footprint. For example, 3D modelling - a technology pioneered in the video

games sector - is helping Rolls Royce to develop their understanding of engines,

improve their efficiency and enhance performance in their manufacture.

Skills shortages exist in relation to creative sectors like animation, visual effects and

video games. Digital skills remain a systemic problem throughout the sector⁶².

Creative, digital, design and engineering occupations have bright outlooks and are

strongly complemented by digital technology⁶³.

⁶¹ Sir Peter Bazalgette. (2017) Independent Review of the Creative industries

⁶² NESTA - Armstrong, Harry, et al. (March 2018) ‘Experimental Culture: A Horizon Scan Commissioned by

Arts Council England’

⁶³ Nesta (2017) The Future of Skills: Employment in 2030

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New Anglia LEP

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Skills Needs in Construction and Health and Social Care

New Anglia also produced two other sector skills plans in house (early in 2016), but

neither has any real focus on digitalisation or the uptake of emerging technology:

• Construction - The current published New Anglia Skills Plan has no mention of

‘digital’ and only one mention of adopting new ‘technology’.

• Health and Social Care - The current published plan has no mention of ‘digital’ or

adopting new ‘technology’, which is surprising as the consultations with senior

NHS managers for the Life Sciences and Bio-economy plan identified that the

NHS will be unable to meet its future commitments practically (labour supply) or

financially without adopting new digitally enabled technologies.

Both sectors are increasingly using new technology including digital solutions and

numerous reports are identifying that automation and robotics will have a major

impact on these sectors in the medium to long term.

Both sectors are also very exposed to restrictions on migration following Brexit as

their workforce uses a high proportion of EU migrants. Further consideration of

these challenges is therefore urgently required including:

In Construction:

• Digital design, 3D printing and other forms of automated construction. There is a

recent McKinsey report (2018)⁶⁴ which looks in detail at the way in which digital

and new technology is being integrated into the construction sector at every

stage of the process from design to build and operation. It identifies that

investment in construction technology has doubled in the last decade to over

$1billion of venture capital investment in 2017;

• In November 2018 BEIS announced an investment of £72 million to create a

Core Innovation Hub⁶⁵, as part of the modern Industrial Strategy to make the UK

a world leader in the latest construction techniques. Linked to the Industrial

Strategy and Construction Sector Deal, the hub will support essential research

and development in digital and offsite manufacturing technologies, focusing on

technologies such as augmented and virtual reality. The aim is to transform the

sector and improve UK infrastructure;

• The Transforming Construction Alliance (TCA) has been selected to deliver the

national hub. It is partnership between 3 centres of established excellence:

⁶⁴McKinsey (2018), Seizing opportunity in today’s construction technology ecosystem

⁶⁵BEIS (2018), Virtual reality to revolutionise UK’s construction sector

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Manufacturing Technology Centre (MTC); BRE; and, Cambridge University’s

Centre for Digital Built Britain (CDBB). The UEA already has links to BRE having

included them in the UEA led InCrops partnership (2008-’15) which also included

Cambridge University. The UEA Adapt Group has also been active in this area.

In Health and Social Care:

• Telemedicine, sensors to monitor health, AI and imaging technologies for

diagnosis, robotics to help with social and physical care needs and cobots to

assist carers so that the musculo-skeletal problems experienced by many staff

through lifting patients are reduced;

• A consultation with an NHS board chairman for the New Anglia Life Sciences and

Bio-economy Sector Skills Plan (2018), explored the premise that to be able to

provide future services successfully the NHS had to embrace new technology. A

key blockage in achieving this was felt to be the fact that most current NHS staff

do not have the technical skills to be an ‘expert client’ and thus cannot specify

and embrace the potential which digitalisation has;

• This need to embrace digitalisation was at the heart of the announcements in

January 2019 of the NHS Long Term Plan⁶⁶, from Matt Hancock MP Secretary of

State for Health (and Suffolk MP). This signalled a move to embrace

telemedicine and the potential of digitalisation more broadly in diagnosis and

treatment, with a focus on prevention as well as cure.

Future work on Digital Creative and Education sectors

A sector skills plan for Digital Creative, building on both the plan for Digital Tech and

Cultural Sector skills plans, is currently being developed.

Given the focus on digitalisation this plan is expected to focus heavily on how digital

technologies can support this emerging sector.

Further work is looking at whether and how to develop a skills plan for the education

sector itself, to address the challenges reported across many of the sectors in

securing the lecturers needed. In New Anglia, reports also regularly show major

challenges with attracting graduates with STEM skills into teaching. Given the focus

on digital skills across the economy, this plan would, if developed, clearly explore the

need for digital skills amongst teachers and lecturers.

⁶⁶ Department of Health and Social Care (7^th January 2019), NHS Long Term Plan launched

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

The Retail Sector

The one large sector in New Anglia which has not yet been covered by a skills plan

is the retail sector. Given the magnitude of change which is already happening in

this sector due to digitalisation, it is proposed to cover at least the digital aspects of

the retail industry in the Emerging Technology Sector plan.

Retail is the largest private sector employer in New Anglia and widely accepted to be

very exposed to digitalisation:

• In 2017, IPPR reported that retail was one of four sectors where collectively

5million jobs were at risk due to automation.

• BBC News in August 2017⁶⁷ reported that: The popularity of online shopping has

contributed to a near doubling in demand for warehouse space over the past 10

years, according to figures from property research firm CBRE. About 235 million

square feet of warehouse space was leased or purchased between 2007 and

March 2018 - equivalent to more than 3,000 Wembley Stadiums. That figure is

up from about 130 million square feet in the previous decade. About 60% of the

space is now used by retailers, according to CBRE.

• Online sales now account for 18.2% of all Great Britain’s retail trade⁶⁸ and have

grown by 15.2% in value in the year to July 2018, against growth of 5.1% (value

excluding automotive fuel) for the sector as a whole. High street food stores only

saw growth of just over 2% and non-food retail stores saw growth of less than 1%

when online sales were excluded.

Analysis by PWC in autumn 2018⁶⁹ has shown that the challenges for the high street

have intensified with the biggest gap between the number of store openings and

closures in 5 years. In the first half of 2018 there was a net loss of 1,123 shops from

the UKs top 500 high streets as 2,692 shops closed and only 1,569 opened. In

contrast the figure for the first half of 2017 was a net loss of 222 shops.

Earlier in 2018, PWC⁷⁰ had reported that ‘many retailers are increasingly feeling the

impact of the acceleration of online shopping as consumers begin to feel more

comfortable with the price transparency and reliability of delivery options offered by

online retailers’.

⁶⁷ BBC News Online 27th August 2018, Online shopping drives demand for warehousing space

⁶⁸ ONS (August 2018), Retail Sales, Great Britain: July 2018

⁶⁹ PWC (9^th November 2018) , British High Streets Weather the Most Testing Retail and Leisure Climate in Five

Years as Gap between Store Openings and Closures Widens

⁷⁰ PWC (11^th April 2018), Store Openings at Lowest Level in Seven Years, as Digital Demands and Appetite for

Experiences Continue to Redefine British High Streets

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Analysis by SkillsReach for this plan has looked at the Retail sector and has found

that:

Table 6 - Retail Centre Consumer Spending⁷¹

Rank

Centre

Retail Spend Potential

London West End

£9,141,226,044

Glasgow

£4,260,877,222

Birmingham

£3,738,666,154

Manchester

£3,534,636,565

Leeds

£3,180,292,167

Liverpool

£3,102,829,857

Nottingham

£3,003,776,127

Cardiff

£2,798,170,147

Newcastle upon Tyne

£2,796,940,154

Edinburgh

£2,346,843,910

Norwich

£2,318,506,810

Peterborough

£1,776,537,193

Ipswich

£1,570,249,828

Cambridge

£1,513,016,237

Referring to retail specialists Harper Dennis Hobbs ‘2017 Vitality Rankings - Top 50

British Centres’ publication we can see that Norwich is ranked just outside the top 10

retail centres nationally with a retail spend potential of approximately £2.3bn.

Only three other areas in the East of England region appear in the top 50, all with

much lower retail spend figures. This means that Norwich is particularly exposed to

the changes being seen in retail.

⁷¹ 2017 Vitality Rankings - Top 50 British Centres’, Harper Dennis Hobbs, June 2017

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New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Table 7 - East of England Major Retail Centres⁷²

Retail Trade

Retail Units per

Major Town/City

Population

Business Units

1,000 Population

Norwich

1,070

140,353

7.6

Cambridge

755

124,919

6.0

Luton

1,030

214,658

4.8

Ipswich

630

138,480

4.5

St Albans

590

147,100

4.0

Peterborough

795

198,914

4.0

Chelmsford

540

176,200

3.1

This conclusion is further reinforced by looking at the ratio between population and

the number of retail units in a retail centre. Despite having one of the lowest

populations of major towns and cities in the East of England, Norwich has the

highest number of retail business units

This implies that Norwich services both a much wider area and larger population

than other major towns and cities in the region.

As the retail sector transitions to an online model facilitated by, often automated,

ordering, warehousing and delivery systems, the sector’s skills needs and workforce

requirements will change very rapidly.

With this sector being (retail, wholesale and transport) New Anglia’s single largest

employment sector, it is vital to look at how the region can support positive change in

this sector of the economy.

⁷² Sources: UK Business Counts 2017, Office for National Statistics; 2017 Mid-year Population Estimates,

Office for National Statistics

Annex 3 - Common Themes on Emerging Technology in the Sector Skills Plans

Across all the sector for which skills plans were produced common themes in relation to digital and emerging technologies are

apparent (drawn from the skills plans and national reports):

Sector Skills Plan

Industry 4.0 Technology provider

Industry 4.0 application & user

Data, AI, VR, Machine Learning

Robotics & Automation Systems

(RAS)

SkillsReach led plans in 2016-18:

Digital Tech

Central role as developer of

Provide the ICT and data analytics

key role to provide the control

technology alongside Digital

to underpin the developing of

systems for robotic and automated

Creative and AME sectors

smart systems including AI, VR

systems (RAS)

and machine learning

Life Sciences & Bio-economy

Centres such as Earlham Institute

Major end user of AI, machine

Major challenge regionally to turn

have helped spearhead new data

learning and data analytics in

R&D base into saleable products,

analytics platforms and

research and commercial

which will require cutting edge

technologies to help DNA profiling

applications

manufacturing

Advanced Manufacturing &

Central role as developer of new

Control systems, sensors and

Investment RAS across many

Engineering (AME)

Industry 4.0 systems alongside

AI/machine learning all being

other sectors anticipated to

Digital Tech and Digital Creative

applied extensively with an

increase demand for AME

sectors, but also a major end user

expectation of much faster

company services to design, build,

of the technology as well

adoption in future

install and maintain RAS

emerging-tech-sector-skills-plan-skills-board-final-feb-19 (1)

Page 69

New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Sector Skills Plan

Industry 4.0 Technology provider

Industry 4.0 application & user

Data, AI, VR, Machine Learning

Robotics & Automation Systems

(RAS)

AgriFood Tech

Sector combines both end users

Still in its infancy, but multiple UK

UK adoption is accelerating rapidly

(majority) and companies

and global start ups targeting the

due to labour constraints, wage

developing new technologies for

food chain with data platforms,

cost pressures and availability of

agrifood, although New Anglia

MIS and control systems

automated systems as global

R&D base mainly focused on other

investment accelerates

tech areas

Energy

Mainly an end user sector

Smart grid technology will increase

Applications for dangerous roles

the use of data, AI and machine

(e.g. marine or nuclear) is driving

learning across the energy

adoption and supported by

economy and move it from a

government ISCF programmes

technology used by energy

More broadly adoption is

companies to technology adopted

supporting energy infrastructure,

by energy using companies and

smart grid technology (sensors)

households

and logistics for energy

Page 70

New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Sector Skills Plan

Industry 4.0 Technology provider

Industry 4.0 application & user

Data, AI, VR, Machine Learning

Robotics & Automation Systems

(RAS)

Ports and Logistics

Mainly an end user sector

The use of digital systems to track

Major investment in automation

and plan logistics is established

expected, including self driving

vehicles, automated warehousing,

However, the expectation is that

ports loading and unloading and

the growth of direct delivery

delivery using drones, autonomous

services, automated supply chains

vehicles etc.

and new transport infrastructure

will increase the demand for data

Major disruption to existing skills

services substantially.

base and need for new skills.

Improved health and safety is a

Potential for substantial disruption

key driver of RAS adoption

to other sectors, such as retail,

whose business models will be

displaced

Financial & Insurance

Mainly an end user sector,

Fintech is changing the way

No major needs identified

Services

although some new technologies

financial services are delivered

are being developed by the sector

and is attracting substantial

directly (including start ups)

investment. UK is leading some of

this work globally based on the

strong UK financial services sector

Page 71

New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Sector Skills Plan

Industry 4.0 Technology provider

Industry 4.0 application & user

Data, AI, VR, Machine Learning

Robotics & Automation Systems

(RAS)

Cultural Sector

Mainly an end user sector

Digital is revolutionising the way

No major needs identified

that cultural services are

developed (e.g. animation,

gaming) and delivered (apps, VR).

Virtual tours, marketing, online

media and information services

expected to grow in importance in

the future

Earlier plans developed by the LEP:

Construction

Mainly an end user sector

Digital technology already used

Technology being developed to

extensively for design and

reduce costs, increase efficiency

engineering for construction.

and improve health and safety. 3D

Smart building technology utilises

printing of buildings, offsite

data analytics (including sensor

construction and automated

networks) and AI and machine

building systems in development

learning to manage build

environment services and

funtionality

Page 72

New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Sector Skills Plan

Industry 4.0 Technology provider

Industry 4.0 application & user

Data, AI, VR, Machine Learning

Robotics & Automation Systems

(RAS)

Health and Social Care

Mainly an end user sector

Telemedicine, real time monitoring

Automated procedures being

of patients conditions and imaging

developed for diagnosis and

are all growing rapidly

treatment of a wide range of health

needs

New diagnostic tools using AI and

machine learning many replace

Robots and cobots for care being

many traditional clinician roles

developed across the World to

allowing more focus on patient

reduce danger to staff (from lifting)

care

and to provide costs effective 24

hour care services

Social care services will be

supplemented with digital

monitoring of patients

Plans in development:

Digital Creative

Yes, central role as developer of

Provide the ICT and data analytics

key role to provide the control

technology alongside the Digital

to underpin the developing of

systems for robotic and automated

Tech and AME sectors

smart systems including AI, VR

systems (RAS)

and machine learning

Page 73

New Anglia LEP

Emerging Technology Sector Skills Plan, February 2019

Sector Skills Plan

Industry 4.0 Technology provider

Industry 4.0 application & user

Data, AI, VR, Machine Learning

Robotics & Automation Systems

(RAS)

Education

Skills for technology is a key role

Online, digitally enabled education

Limited applications, but key role

for the education sector in the

and training systems are becoming

in providing skills for this

delivery of Industry 4.0

more common with VR and AI

technology

being used to enrich the

experience

Clean Energy

Mainly an end user sector

The development of smart grids

Limited applications

and smart energy systems will

create demand for technology and

new skills to support new

technology and business models

Sectors not covered by a skills plan where Industry 4.0 will impact substantially

Retail

Mainly an end user sector

Online retail is growing very rapidly

Changes in retail distribution is

at the expense of traditional high

being enabled by RAS and future

street sales. The retail sector

prognosis suggests a continued

employs 3.1m staff and so change

move away from high street stores

has major impacts on the

and shopping centres to

workforce. AI and machine

warehouses, direct delivery

learning are allowing retailer to

services and automated logistics

directly target consumers

solutions

Annex 4 - Consultees

In developing this plan the SkillsReach team consulted directly with:

•

Adam Golding, Tait Technologies Ltd

•

Andrew Whilding, Institute of Productivity

•

Bradley Rowley, New Anglia LEP

•

Carolyn Barnes, East Suffolk Councils

•

Clare Harding, West Suffolk Councils

•

Clarke Willis, New Anglia AgriFood Skills Group

•

Colin Noble, Noble Group

•

David Parfrey, Norwich Research Park

•

David Sparkes, New Anglia Growth Hub skills advisor

•

Deborah Blumfield, Estrata Recruitment

•

Eve Cronin, Norfolk County Council

•

Gary Jefferson, West Suffolk College

•

Gordon Jones. Suffolk County Council

•

Helen Clements, Morgan Sindall

•

Helen Lewis, UEA

•

Howard Partridge, Innovate UK (UKRI)

•

Jo Pearson, Pearsons Capital Projects Ltd

•

Jonathan Reynolds, Nautilus Associates Limited

•

Julia Nix, Department for Work and Pensions

•

Julian Munson, New Anglia LEP

•

Laura Smith, Broadland District Council

•

Madeleine Coupe, New Anglia LEP

•

Michael Gray, Suffolk County Council

•

Natasha Waller, New Anglia LEP

•

Paul Reed, Anglia Innovation Partnership LLP

•

Phil Stittle, West Suffolk College

•

Professor Fiona Lettice, UEA

•

Professor David Richardson, UEA

•

Richard Bridgeman, Warren Services Limited

•

Richard Denetto, CBI

•

Robert Campbell, Breckland Council

•

Roderick Sutherland, Suffolk New College

•

Simon Coward, Hethel Innovation

•

Vimmi Hayes, Suffolk County Council

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