We need more graduates if we’re really serious about growth

The belief that there are too many graduates in the UK persists in the minds of many. It is a popular perception that higher education has expanded too quickly and too far but is there any truth to this claim?

It is important to look at the evidence. Getting this right has big implications for the direction government policy should take as well as for individuals and the wider society. Seeking to increase the proportion of the UK workforce with degrees would be a waste of public (and, increasingly, private) funds if there really are ‘too many graduates’. Equally, moves to increase other forms of education and training or encouraging moves straight into the workforce at the expense of higher education could be detrimental to individuals, the economy and society if we do in fact need more graduates.

Our latest report, ‘The way we’ll work: labour market trends and preparing for the hourglass, draws on the large body of evidence on labour market trends, looks at economic indicators measuring graduate saturation and discusses the implications for the UK. The evidence is that graduate vacancies continue to grow. Jobs in ‘graduate dense’ occupations are an increasing proportion of the total workforce. Graduate employment rates have been maintained despite the rapid expansion in the number of graduates and there is still a significant graduate premium. Contrary to popular belief, the evidence suggests that we need to increase the number of graduates in the UK workforce to meet the growing demands of the labour market.

Advances in technology are changing the way we work and the type of work we do. Employment growth is concentrated in occupations involving analytical, problem solving and complex communication activities: typically graduate attributes. We need to create genuine in-work and in-education progression opportunities to equip the population for the demands of the labour market. In light of this, the Coalition Government’s decision to cut around 25,000 university places for next year could seriously limit opportunities for individuals and hinder the nation’s capacity for economic growth.

Worryingly for the UK, global competitors are continuing to invest heavily in expanding higher education despite their own budget deficits. In contrast, England has had to reduce the number of places available at university to control expenditure. If the UK is to remain globally competitive we will need more graduates in our workforce. In light of the evidence, we must continue to seek ways to increase investment, public and private, in universities.  We need to think creatively about how to increase the total number of well-funded, high quality student places to meet the growing need for workers with graduate attributes and to equip the population for the way we’ll work.

This is why we are launching a new project, university_vision sponsored by Hewlett-Packard. Drawing together thought leaders from across the university sector, business and think tanks the project will explore, amongst other things, how the UK needs to be preparing itself now to deliver the workforce we’ll need in the future to remain globally competitive.

Further reading