BBC Scotland Investigates: Getting Scotland to Work

With unemployment still rising, this week's Budget at Westminster will have to address the public concerns and political pressure to find new jobs.

With politicians reluctant to say they can create those jobs, particularly with public spending squeezed, concerns are particularly high for the impact on young people.

More than 90,000 young Scots are thought to be seeking work.

Although many are also full-time students, many are not.

Research from past recessions shows those who enter the labour market when there is high unemployment, finding nothing to do or a succession of training schemes, are often doomed to repeat unemployment and lower pay continuing for decades afterwards.

But a documentary for BBC Scotland has found that the problem goes much deeper than this downturn.

It found there are bright spots in the economy, where flexibility and adaptability are moving people from declining industries towards the growing energy sector, both in the oil and gas industry and in renewable power.

But labour market experts contributing to the programme have said there are much bigger long-term challenges to be addressed, if Scots are going to be able to compete in the jobs market of the future.

Sharp cuts

Employment levels grew, uninterrupted, between 1993 and 2008, but the downturn has forced a shake-out in areas of work that never previously saw sharp cuts.

In the public sector, the current cutbacks are sharper than ever seen before. Some areas of the public sector, notably those in the control of the Scottish government, are seeing jobs of current staff protected from compulsory redundancy.

But the price being paid is partly by younger people, often having just completed extensive training, but unable to get the first step in public sector careers.

They are also the ones who face the consequences of labour law changes in the past two decades which have gone a long way to protect the rights of older workers against age discrimination.

And hearing their stories, they recognise the possibility that the lack of opportunities they now face and the squeeze on real incomes mean they may not do as well as their parents' generation.

Growing inequality

There is a real risk that this downturn in Scotland and the UK may mark the end of an era of rising prosperity for most people, as it is accompanied by a re-balancing of opportunity around the world.

Prosperity may belong now to those with internationally-marketable and scarce skills, as inequality grows between that elite and the others who face international competition for jobs, but who are ill-equipped to face it.

Globalisation affects the labour market in two main ways. One is obvious to anyone who is a regulator customer of the hospitality industry. Polish workers, for instance, continue to dominate much of the hotel sector.

The BBC Scotland investigation examined the claim that these people are taking jobs that could be done by workers recruited from closer to home.

What it found from employers is that such people are successful because they offer the skills and dedication employers typically want, particularly their social skills.

But it's worth noting that migrants out of Scotland tend to do well too, offering the same attitudes to employers elsewhere.

Some call centre roles have been coming back to the UK from India

The lesson may be that the act of migration, in or out of Scotland, can often be a sign of a person with get-up-and go - so much that they've got up and gone.

The other side of globalisation is in jobs moving to cheaper locations. Much manufacturing has gone to China, and wage inflation there is pushing some lower-end factory jobs to even cheaper locations in Asia.

India is specialising more in the services sector - its English-language skills have given it an advantage, but it also proving to be a disappointment to many who thought it could continue to attract call centre jobs.

Some of those roles are now coming back to the UK, having failed to meet customer expectations. But that is no block to the much wider range of tasks that highly-skilled, highly-motivated young Indians can take on, without needing voice contact.

Many of the tasks that can be carried out on screen in Scotland, or in other relatively high-wage economies, can also be carried out anywhere there's a fibre optic cable and skilled, motivated, reliable workers.

India is producing millions of them every year. Som Mittal, president of Indian technology industry body Nasscom, said his members already employed 2.7 million people.

'Young industry'

He said: "The average age of our industry and people who work in this is around 27 years.

"It's a very young industry, and this young talent pool has enormous capability to be able to re-skill themselves and reinvent themselves because technology is changing so rapidly that what used to be a skill three years back has probably changed, and you need new skills for what's ahead.

"That's capability we have strongly built into our industry."

One of many opportunities that come from this growth in India is for Scots to sell their expertise, in education for instance. In Noida, near Delhi, a campus of Strathclyde University is now recruiting its first full-year intake for this summer.

The opportunities of India's growth can also been seen in the impact of increasingly prosperous Indians wishing to invest in the UK. Tata, for instance, owns two steel processing plants in Lanarkshire, as well as Jaguar Land Rover.

Women workers have been most likely to secure newly-created managerial and professional jobs

And with some irony, Hero - a company that is ubiquitous in India for its manufacture of bicycles and scooters - has invested in Scotland's call centres.

HeroTSC is now the biggest private sector employer of call centre workers in Scotland. So the trade in jobs brings more trade, more investment and thus benefits back to Scotland.

One of the issues raised most often in the BBC Scotland investigation was of those soft or social skills necessary for many jobs now being created.

Their importance puts women at something of an advantage. Even though women workers have suffered heavily from the automation of many administrative and secretarial tasks, they've also been most likely to secure the newly-created managerial and professional jobs.

We've been told that some highly tech-literate young people have been found by recruiters to have spent too long engaging with others through technology, leaving them without the verbal skills for dealing with real people in real life.

Early investment

But according to Alan Sinclair, a workforce expert who founded the Wise Group training agency in Glasgow, such social skills can be secured or lost even before children get to school.

He argued for investment in those early years.

He added: "By the age of about three, you've either managed to get into work in the future or you're a lost cause. It's simple things: do your parents talk to you? Do you respond? Do you know how to play with toys? Do you know how to play with pals? Do you resolve conflicts?"

Will Hutton, an economist and former director of the Work Foundation, says the fundamental problem is not so much the way people are prepared for work, but the way the labour market operates.

He told BBC Scotland: "We live in a country in which unemployment is high, rising and going to stay high. A lost few years will be a lost decade.

"This is not because the labour market works badly. This is not because people aren't trying to find work.

"It is almost entirely because there is insufficient demand for goods and services, for people to buy, that in turn will generate work. And we should be bloody angry about running an economy when we have so much capacity to do differently in this way".