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Be flexible to altering focus as times change

Looking back, it all seemed so easy. More than a decade of steady economic growth, an apparently sustainable model of managing, the unstoppable shift from manufacturing to services, and trend lines in population, growth, prosperity and skills that were beginning to have the feel of inevitability about them.

Despite the apparent solidity of these trends, Lord Leitch reviewed the evidence and concluded that attempts to predict the skills needs of the nation in any meaningful detail were doomed to fail. The term "demand led" was resuscitated to symbolise the need for skills providers to respond to actual, rather than planned demand.

With the onset of the credit crunch and all that flows from it, the world has become even less predictable. Companies threaten to collapse without warning. Increasingly mobile workforces are tempted to seek employment in countries that offer a higher rate of return. Economic gurus ponder whether recovery will come from a reinvigorated financial sector, a return to manufacturing or something new and unexpected. The truth is, we don't know.

So, what are the implications for skills? Recent government pronouncements speak of continuing commitment to demand-led skills training but also hint at the need for "strategic intervention". Most frequently mentioned are investment in broad-based and development of "green" skills. Both are worthy of serious consideration.

When the dotcom boom encouraged huge investment in fibre optics, few of the ventures designed to benefit actually succeeded. However, investments in capacity lowered internet connection prices and encouraged a legion of entrepreneurs to bring their ideas to market. New forms of communications, social networking, media, business and retail markets followed, totally unanticipated by the skills planners.

What of green skills? What are they? Skills for loft laggers may be met easily, but developments in this area could encompass new fuel technology, construction materials and techniques, waste management, different approaches to transport, and other fundamentally new business models.

Overcoming the recession and supporting the subsequent recovery will create skills issues, but what precisely will they be? The truth is, we don't know. Training providers need to be prepared for a bit of turbulence. Demand in some areas may collapse as businesses move or disappear completely. Equally, new skills will be required. The FE sector must be prepared to react.

The skills of the unemployed this recession will be different from last time. With layoffs predicted to hit the professions harder, a rerun of the schemes rolled out in the 1980s will not be enough. There will still be a need for basic and employability skills training, plus specific vocational skills training where clear job opportunities exist; but there will also be a need to foster a spirit of innovation and enterprise. The economy will be built on new ideas and on people who are open to building the new businesses we need. Broader FE support for business start-up could add more value to the economy as a whole.

Government can do much to liberate the system. Flexibility is key to working with the unpredictable needs of an uncertain future. In particular, there is a need to liberate funding in ways that allow the FE sector to target increasingly scarce resources where they will have the greatest effect. In return, providers will need to demonstrate they are tuned in to the detail of local needs and have the will and ability to react.

John Stone, Chief executive, Learning and Skills Network.

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