How impact investors can use technology to help adults benefit from employment

Learning and Work Institute (L&W) and Ufi are exploring how to use technology to help every adult in the UK get the skills they need to participate and benefit from employment. We are bringing together organisations, learners and thought leaders from across the adult education sector and beyond as part of “VocTech Challenge: Skills for an Economy in Transition.” We are asking the question:

We are working at a time of rapid change in the UK economy and labour market, where we see that the UK’s needs will not be met unless there is greater and more equitable access to skills.

We know that economic growth comes from a better skilled workforce, and that must include every part of the workforce. This means ensuring that everyone has the opportunity to develop skills for work through their lives, building a future economy and labour market where people aren’t just playing catch up but have the chance to thrive in new industries and sectors.

In our Discovery Blog series, we are summarising a range of discussions and conversations that are taking place with stakeholders across the four nations of the UK.  We are looking to hear about the real lived experience of learners and examine the practical challenges and solutions in adult vocational education. These blogs will then form the bedrock of our Green Paper, to be launched on 26 April, which will draw out all our new findings.

Join the Green Paper launch event

These blogs reflect a fraction of the conversations we are having and if any of the topics or themes explored in these blogs are of interest, please do get in touch via VocTechChallenge@ufi.co.uk.

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Author: Nick Kind, Managing Director, Tyton Partners.

Tyton Partners is an advisory firm focused exclusively on the education and human capital management industry, offering both strategy consulting and investment banking services. Tyton and Ufi VocTech Trust are collaborating on an ongoing exploration of the opportunities for investors in the Future of Workforce Development.

Introduction

Ufi VocTech Trust, in collaboration with Tyton Partners and Learning and Work Institute (L&W), recently convened a workshop with key impact investors to explore how to use technology to help every adult in the UK get the skills they need to participate in and benefit from employment. I was fortunate enough to chair the discussion. In the interests of the wider VocTech and investment community, this blog post offers a brief summary of what we covered.

Identifying Gaps: Skills and the Future of Work

We started to unravel how impact investors can use technology to help adults benefit from employment by looking at the context for investing in VocTech and the Future of Work. We particularly focused on skills gaps amongst adults from low-income and otherwise, underserved communities. There was a general agreement that there were particular gaps in the following areas:

• Employability or ‘soft’ skills (sometimes also referred to as ‘power’ or ‘fusion’ skills), such as communication and collaboration skills
• Baseline digital skills, particularly the use of common software such as Word (rather than more technical capabilities, such as coding)
• Career planning and management, including the resilience required to deal with likely setbacks in finding or changing work.

Specific industries with notably large or acute skills gaps that were discussed included the childcare sector and “green jobs”; although we did not attempt to be exhaustive, the range of jobs covered a wide range of skill levels.

Outlining barriers in the system

The barriers to bridging these gaps are substantial. Government policy (including policy churn and system complexity) is a challenge; although, there was some optimism in the group about the Scottish Government’s NSET initiative. It’s difficult for investors to find companies and organisations that fit their criteria in the absence of clear funding flows, and governments can play a key part in making these visible and reliable. For startups to grow and succeed in the UK, investors need to be able to be confident that the funding landscape is clear and stable.

Continuity of policy across parties and electoral cycles was identified as another key factor. Given that people from lower-income groups are unlikely to be able to afford either the time or money to dedicate to training without some form of external financing (particularly during a cost of living crisis), government intervention is vital for them to access the opportunities they need. Furthermore, smaller, newer and more innovative organisations often find it difficult to get accepted by government bodies, given qualification criteria for tenders and other contract frameworks. This could be changed.

Changing the impact investing approach

Investors – especially those with an impact focus – may need to reconsider their approaches. Considerable money has gone into companies delivering training with low capital intensity requirements and offering solutions for corporations and “white-collar” work (e.g., in technology or leadership training). The group felt there were considerably fewer investments in companies reaching lower-qualified adult learners despite the societal need. We wondered if there was a need for more patience (i.e. accepting a longer time horizon for financial returns) and/or a broader spectrum of instruments from mission-driven investors (e.g., concessionary loans) to prove that such organisations could deliver satisfactory returns and attract more money into the space.

Where to next for tech solutions?

We continued with a discussion of what new products and services the group would like to see. Amongst those mentioned were…

• Solutions using familiar, “off-the-shelf” tools (such as WhatsApp) rather than proprietary technologies
• Data on what happens to school leavers who do not go to university, so that they can be better served
• Training modules to help childcare workers and providers gain and demonstrate work-related skills
• Green skills training to accelerate the net-zero transition, including offerings which blend digital and real-life experiences
• Tools which improve the management and experiences of placement students
• Soft skills and career preparedness using combinations of AI, virtual reality and augmented reality

At the end of a (packed!) hour, we concluded that a more “joined-up” ecosystem of philanthropic and commercial funders could also accelerate the development of effective interventions. If you would like to join us in helping to make that happen, please get in touch.

To see what Tyton Partners and Ufi have been working on, take a look at our latest annual report, The Jobs Frontier 2023 which includes our public analysis of key developments in the Future of Work investment landscape.

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The VocTech Challenge: Skills for an Economy in Transition

At Ufi we are committed to connecting solutions to problems and bringing people together to share and find new connections, in particular in these constrained times when we all have to find ways to work smarter, foster collaboration and accelerate the pace of change.

As an economy we are taking big steps forward into a sustainable, digital future where skills are key to unlocking UK productivity and competitiveness. At Ufi we want those opportunities to be for everyone, whatever their starting point in their journey into learning and work. Where people aren’t just playing catch-up but have the chance to thrive in new industries and sectors.

Together with Learning and Work Institute our VocTech Challenge will delve deeper into what has already been ‘learnt’ and seek new insights into how we can create a UK skills system, underpinned by tech, that helps to narrow inequalities and ensure every adult can participate in learning throughout their working lives so that as our economy continues to evolve and transition, no one is left behind.

We're excited to see what issues are surfaced. These will shape a grant call and other activities that Ufi will announce in June.

Take a look and get involved.