The UK economy can still create jobs | Geoff Mulgan

Traditional employers are shedding staff, but there will be major growth areas. We just have to plan

On both sides of the Atlantic there’s precious little sign of confidence in leaders’ ability to create jobs, whether with another round of fiscal stimulus, or promised waves of business start-ups. in Britain, the sectors that created most jobs in recent years are now shedding them fast – from disappearing high-street chains such as Clinton Cards, Blacks and JJB Sports, to a shrinking public sector and a voluntary sector where an estimated 10% of jobs are going each year. Even the most optimistic forecasts on manufacturing recognise there’s unlikely to be much net jobs growth – except for robots.

Yet economies do create jobs, and most past forecasts of jobless growth were wrong. So where will the jobs come from? Economies are complex beasts that need people to do an extraordinary range of tasks. But it is possible to spot the patterns; what’s strange is how little the UK is doing to make the most of the opportunities.

The first big area of likely jobs growth is care, and health more generally. Care is now one of the least rewarded and lowest-status sectors of all, with most workers on zero-hour contracts (which offer no guaranteed hours, but require people to be available at short notice). But the effect of an ageing society will be a jobs boom. As people get richer, they spend a disproportionate share of their income on care and health (and education). It’s no coincidence that half of the jobs created in recent decades in the US have been in healthcare, and most forecasters there expect the trends to accelerate. Yet Britain is hopelessly unprepared for this.

There are hardly any apprenticeships in care; hardly any schools preparing teenagers for jobs in care; and few signs that politicians know what to do to raise the status and rewards for what will soon be one of our most important industries.

The second area of likely jobs growth is computers. In The Graduate, Dustin Hoffman has an awkward conversation with a middle-aged man who tells him his future lies in plastics. Today he’d be advised to go into data. It’s estimated that half a million jobs have been created in the US just producing apps. We at Nesta predict a steady growth in jobs across the economy in manipulating and managing data – indeed, this will become ever more important for every business. Here too, the UK is unprepared. Standards of maths haven’t improved much in schools, and there are still too few opportunities for bright teenagers to learn how to programme and play with big data sets.

The third opportunity is globalisation, often seen as a scourge of jobs, which may now be working in our favour. Foreign-owned businesses raised their share of UK jobs from 11% in 1997 to 19% in 2010 – that’s 1.6m more jobs. As capital flows in from firms such as Tata, this trend is likely to continue. Generally it will be good for us, because these businesses also invest more in innovation and do more to drive up the quality of supply chains than British ones.

That’s a strong argument for remaining open to the world. Yet the recent moves to cut off inward migration signal an economic nationalism that is working against our interests on jobs – whether it’s putting off oil specialists in Aberdeen, internet entrepreneurs in Manchester, or Chinese students wanting to stay on in London. Immigration isn’t always good for the economy or jobs. But there’s been an overcorrection that will probably be bad for today’s teenagers.

In the big scheme of things, forecasts of the end of the job are as suspect today as they were 30 years ago. The jobs market has done a lot better than many expected at the start of the downturn. But why do we find it so hard to be strategic? Why does political rhetoric so often talk about jobs in the abstract, rather than about specific sectors and opportunities? And why can’t we do more to make our own luck rather than just hoping things will turn out OK? The US election hasn’t answered any of these questions. In the run up to our next one, let’s hope that we do better.

Geoff Mulgan is chief executive of the innovation foundation Nesta and a former head of policy in the prime minister’s office

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