Tackling Skills Shortage is Critical for Welsh Economy


Across the UK manufacturing sector 186,000 new engineers and manufacturers will be needed every year up until 2024. Currently there is a deficit of around 20,000 new graduates each year.

For Wales, the skill shortage across all sectors is currently costing the country £155.2 million.

Tackling this problem is therefore becoming a more and more critical issue for the Welsh Economy.

At the start of the year, 84% of Welsh SME Manufacturers were confident of future growth. Citing factors such as increased demand and diversification, it is therefore not just the current losses the skill shortage is affecting but also the prospects for future growth.

Two main solutions present themselves to dealing with the problem; Apprenticeships and Upskilling.


Apprenticeships are often seen as the keystone to increasing the number of graduates leaving education and entering the manufacturing workforce. One of Wales’ biggest manufacturers, Tata Steel, cited apprenticeships as the key to their success.

Research by the Centre for Economics and Business Research (Cebr) found that on average, each apprentice brings a £10,000 gain in productivity for their employer. Further industry research also found that 77% of employers found that apprentices helped make their organisations more competitive.


Due to the spectre of Brexit causing a potential shrinking in the available talent pool and the interconnectivity revolution of Industry 4.0. Upskilling current staff is also seen as a key method for tackling a changing manufacturing landscape and can help deal with talent retention by showing a willingness to invest in staff development.

Wales itself already has options for upskilling around I4.0 in the form of a Made.Wales project that offers bespoke training within the Welsh manufacturing sector.


Two issues that have already been mentioned in this article, Brexit and Productivity, present problems from both within and without.

While the future of Brexit is in the hands of politicians in Westminster and Brussels, productivity is something that will need to be addressed within the sector to ensure that, regardless of the Brexit outcome, Wales remains a competitive place for manufacturers.

In a recent interview in our ‘Carwyn Meets’ series. Carwyn spoke to Graham Howe, Principal Research Fellow for Advanced Manufacturing at UWTSD about many the issues around productivity and his current view of the Welsh manufacturing sector.