Media Release

Economic rebalancing to be thwarted by 40,000 annual science graduate shortfall and immigration clampdown

The Government’s aim to rebalance the economy away from financial services is inconceivable due to a 40,000 per year shortage of home-grown graduates in the science, technology, engineering and maths (STEM) sectors, a think tank reveals today (Monday 18 March).

The Social Market Foundation’s report, In the Balance: The STEM human capital crunch, uses the latest industry figures to analyse the mismatch between the future employment requirements and the supply of home-grown skills in the STEM sector.

The study reveals that just to replace an ageing workforce, a massive uplift in the numbers of UK STEM graduates is required in the face of a government clampdown on immigration. To achieve the aims of economic rebalancing, the SMF concludes that policy must focus on strengthening science and maths teaching at pre-GCSE level to boost home-grown skills by even more in the long-term.

Key findings include:

  • 40,000 extra graduates a year in science, engineering, maths and technology will be needed to fill the 104,000 graduate-level STEM jobs the economy is predicted to require annually, assuming that the numbers of STEM graduates entering other professions stays the same;
  • This will mean that the number of UK STEM graduates each year will have to increase by almost half;
  • As the majority of the STEM jobs of the future will be in engineering, almost one in five 21-year-olds will need to be entering the engineering profession each year if the UK’s young people are to meet demand.

Nida Broughton, Senior Economist at the SMF and author of the report said:

“The Government has made clear its aim to rebalance the UK economy towards manufacturing and away from financial services. But it has also pledged to reduce immigration. Our analysis shows that the gulf between skills and jobs makes these aims incompatible in the short-term.

“We’re heading for a human capital crunch unless we can rapidly increase the numbers of young people taking science-related subjects at school”.

In the Balance looks at what the likely impact would be if disparities in the take-up of science between different groups of pupils could be levelled up. The SMF’s analysis found that:

  • Tackling underperformance at GCSE among boys and low A-Level science take-up among girls will result in around 12,000 more pupils taking science A-level, and roughly 7,000 more STEM graduates;
  • Taken together, the impact of redressing gender, socioeconomic and regional disparities is likely to result in a further 18,000 STEM graduates – less than half of the 40,000 needed to fill the STEM skills deficit;

Nida Broughton continued:

“Widening the pipeline of STEM students by raising GCSE science achievement and A-Level take-up among some groups will make modest inroads towards narrowing the skills gap. But this alone will not be enough. The real solution to the UK’s huge STEM deficit lies in starting much earlier to boost GCSE attainment across the board.

“Expanding the supply of science and maths teachers will therefore be vital in the long-term if we are to avoid a vicious cycle of self-perpetuating STEM skills shortages.”

The SMF recommends measures to make the teaching profession more financially attractive to science and maths graduates, vastly expanding the Teach First scheme for science and maths teachers, and encouraging more international recruitment in the short-term.

Notes to Editors

  • The SMF report combines analysis of the current skills gap with data on projected employment requirements from a variety of sources, including the UK Centre for Skills and Employment, Royal Academy of Engineering and Big Innovation Centre, Engineering UK and Warwick Institute for Employment Research.
  • On Monday 18 March the winner of the £1m Queen Elizabeth Prize for Engineering will be revealed. The prize will reward and celebrate an individual (or up to three individuals) responsible for a ground-breaking innovation in engineering that has been of global benefit to humanity.
  • The 40,000 additional graduates needed in every year to 2020 is calculated by taking the difference between 104,000 predicted demand for STEM graduates (Royal Academy of Engineering/ Big Innovation Centre figures) and the 82,000 UK domiciled STEM graduates, stripping out the estimated 18,000 UK STEM graduates that go into non-STEM professions each year.
  • In the Balance: The STEM human capital crunch is sponsored by Engineering UK.
  • The Social Market Foundation (SMF) is a leading UK think tank, recently named UK Think Tank of The Year and Economic and Financial Think Tank of the Year.
  • The SMF develops innovative ideas across a broad range of economic and social policy, champions policy ideas which marry markets with social justice and takes a pro-market rather than free-market approach.


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