Upskilling and Training is the key to unlocking UK business growth

Entrepreneur

21-05-2025

The UK is facing a significant change across the economy. Whether this be the adoption of new technologies such as artificial intelligence and machine learning, or more rudimentary changes such as the major shift we have seen towards remote work since the pandemic.
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Throughout modern history, the UK has experienced seismic workplace shifts and with that comes a change in the skills requirements and needs of businesses and individuals across the country. As far back as the industrial revolution and as recently as the invention of the internet, the skills of the workforce have had to adapt in order to fulfil economic and business needs.
On an individual level, upskilling, reskilling and skills training has been vital in ensuring that the workforce has the adequate level of technical knowledge to ensure roles can be filled and in the present day, with new technologies emerging and being integrated at pace, this is more important than ever.
Addressing the skills gap and economic inactivity crisis
The importance of skills and upskilling is vital in today's economic landscape. This is not just as a consequence of emerging technologies but also the skill levels and qualifications we are currently lacking across the economy.
Many businesses across sectors with significant importance to the UK economy, such as technology and finance, are currently struggling to fill vacancies owing to a lack of skills in the workforce. Indeed, a recent report from the British Chambers of Commerce highlighted that 62% of organisations are facing skills shortages with 64% of organisations not confident about applying new technologies such as artificial intelligence or green technologies.
This has a major impact on organisational efficiency and innovation owing to not just the inability to recruit new members of staff but also placing an additional burden on the existing workforce. The same report highlighted that 68% of organisations say that skills shortages have increased the workload on existing staff and in turn removed the ability to work creatively and productively, which in the long run will stifle innovation.
The need for workers with new skillsets and demand for upskilling of existing staff is clear. This has been reflected in the Labour Government publishing its AI Opportunities Action Plan which will aim to train "tens of thousands" of AI professionals by 2030. While this is a positive development, it is crucial that businesses across the economy take immediate action in order to address the gaps they currently experience, rather than waiting for policy to shift the landscape for them.
SBOs (skills-based organisations)
Small and Medium Sized Enterprises (SMEs) play a significant role in the UK economy. The entrepreneurs that lead them and the employees that work for them are the dominant business population, representing over 99% of businesses in the UK and are a significant driver of economic activity. These are the organisations that are currently in desperate need of additional and new skillsets in order to thrive and innovate in whatever sector they operate in.
We are seeing a key gradual transition towards businesses adapting to become Skills-Based Organisations (SBOs), in a bid to be agile and fulfil the requirements of their operations. An SBO goes beyond the traditional viewpoint of a business that advertises using traditional job descriptions and fits employees into siloed workstreams where they are expected to fulfil a single role. Instead, the requirement for new skills is seeing many businesses adapt and embrace employees with diverse skillsets, moving beyond rigid job descriptions and allowing them to respond faster to market and technological changes. The businesses that embrace a skills-based future will thrive in an ever-changing economy as they enhance internal mobility and allow them to become nimble and adaptable.
Although in theory, SMEs may find it easier to become skills-based as they have fewer employees with a relatively flexible set of roles and responsibilities, along with a greater control over how skills requirements can be matched with each role. However, larger business will be more likely to drive a skills-based workforce due to the need to improve internal employee mobility, as there are not enough people in the job market to fill in the skills gaps at the larger scale needed. Larger businesses also tend to have the budgets and bandwidth to shift the way they plan their workforce compared to smaller businesses. SMEs can then gradually follow suit as it becomes more and more mainstream.
How skills can turbocharge innovation
Fundamentally, for SMEs to thrive in a modern landscape and in the context of economic and industrial changes, it is vital that skills are put at the heart of all business activities. The requirements for businesses are clear, that they are in need of the skills that fit into the modern day, and they require them quickly.
Upskilling and training will play a crucial role in fulfilling these requirements. As roles become redundant, change and are enhanced by the emergence of new technologies and working practices, businesses need to embrace being skills-based organisations and adopt routes such as apprenticeships.
Apprenticeships are a key solution to address skills needs, as they provide the opportunity for businesses to acquire new talent and transform the capabilities of their current workforce. Skills are a key tenet in ensuring that businesses of all sizes are able to innovate and for UK organisations to be world-leading in terms of productivity and delivery. In order to achieve this, embracing the concept of being a skills-based organisation will be essential and utilising apprenticeships that have the ability to train new staff and upskill existing staff is crucial.
The UK's policy landscape demonstrates that this is something the Government is keen on developing. By establishing Skills England, the Labour Government have highlighted that skills and training will be a key facet in the UK's economic armoury in years ahead. Similarly, the proposed devolution of skills to the regions also shows the awareness that businesses across the UK have individual geographic needs. The national skills framework therefore also needs to be addressed with a regional lens.
In order to be a successful and innovative economic powerhouse, businesses need to adapt to the change and engage with its existing and prospective workforce to train and upskill them to fit business needs. The requirements of businesses across different industries and regions are not and will never be homogenous, and a tailored approach to addressing individual skills needs will ensure that as an economy we can be world-leading.