Why vocational skills matter more than ever

The engineering and manufacturing sector is a significant contributor to the UK economy. Half of UK businesses’ R&D investment goes into manufacturing, while roughly half of the UK’s exports by value come from the sector. It’s also playing a big part in government plans to secure economic growth, with the Industrial Strategy outlining plans to double investment in the sector by 2035.

With so much resting on the engineering and manufacturing sector, we need to make sure the foundations are there to hold it all up – and continue our work to highlight the importance of vocational pathways.

That’s why Enginuity and EAL are proud to launch the first annual Vocational Celebrational Day taking place on Thursday 6 August 2026 – to shine a spotlight on vocational skills, and the hard work learners are putting in.

The skills gap has an impact on us all – not just the employers and recruiters struggling to find talent, but on a much wider scale where the sector’s contribution to the economy falls short of its full potential.

What the data shows on skills

The Institution of Engineering and Technology (IET) published some stats^[1] last autumn that suggest skills shortages are hampering employers’ plans for growth and innovation.

More than three quarters (76%) of employers say they’re struggling with recruitment for key roles, while respondents gave employee turnover and retirement among the reasons why sharing knowledge is becoming too difficult, affecting the ability to upskill colleagues with the necessary skills to work efficiently.

When retirement and role changes are reducing the expertise that’s necessary for companies to innovate, grow, or even meet current targets, we begin to see the need for action to close the skills gap and solve shortages.

Negative perceptions of vocational qualifications

Vocational qualifications, apprenticeships, and technical education are at a crossroads. Long considered the poor relation of academic study, the reputation of vocational qualifications diminishes in comparison to what some see as a more valuable commodity in a university degree.

But taken in its wider economic context, we see that the UK is more in need than ever of those with work-ready, hands-on skills.

Our most recent instalment of Thriving or Surviving? The Manufacturing Sector Health Check shows that manufacturing GDP rose while the overall UK GDP shrank, underlining the sector’s significant role as it displays growing momentum within our recent reports.

And the findings of an SQW report, commissioned by Enginuity, reveal that the issue is already affecting SMEs.

Mind the gap on skills

Of the skills-related challenges they face, two common issues for SMEs are:

• a skill gap (at least one employee who wasn’t fully proficient in their job)
• or a skills shortage (difficulty in filling a vacancy).

Our survey of 227 SMEs in the engineering and manufacturing sector across the UK, ‘Mind the Gap: The £5bn cost of missing skills’, showed that half of them face one or both issues.

Approximately one third of respondents asked about the most valuable skills in their business answered with each of soft skills, digital skills, and data and analytical skills. But almost three quarters (74%) answered that technical manual skills like welding were top of their list.

These difficulties in developing talent come at significant cost to the sector. Our report gives the overall cost as £5.2 billion per year – roughly 2% of the sector’s annual output. That’s a GVA gap of £1.2bn due to skills gaps, and £4bn due to skills shortages. It represents a respective hit per firm per year of £40,000 and £120,000.

That’s undoubtedly a lot of money left on the table. And vocational training can help to plug those gaps and ensure that the workforce is skilled enough to tackle not only the technical challenges of today, but the emerging technologies of tomorrow.

Can the sector turn things around? Can we provide SMEs with the opportunities to reduce those financial shortfalls and make the most of a thriving, skilled workforce?

The answer is about changing those perceptions of vocational qualifications and technical training as somehow ‘less than’ a university degree. The ‘Mind the Gap’ report makes a series of recommendations aimed to steer skills policymakers towards a solution designed to get more raw talent into the engineering and manufacturing skills pipeline through any of its access routes. For the UK to remain competitive and support future sector growth, the sector must continue to invest in these vocational routes – employers, educators, and policymakers alike.

In the meantime, employers and educators together can play a part to raise the profile of vocational skills, by joining the national conversation. And that’s where the new initiative by Enginuity and EAL comes in.

A skills celebration

Vocational Celebration Day is part of our efforts to give technical achievements and vocational pathways the kudos they deserve. We’re finally seeing that skills are the missing piece in the puzzle of sustained economic growth, productivity, and innovation. It’s never been more important to help employers tackle those skills shortages across key sectors.

The talented people picking up valuable skills deserve to be seen in the same light as the school and college graduates, which is the goal of Vocational Celebration Day – as part of a larger effort to recognise the contribution of vocational skills to the success of the UK workforce.

Vocational Celebration Day

^[1] https://www.theiet.org/media/press-releases/press-releases-2025/press-releases-2025-october-december/6-october-2025-latest-uk-engineering-and-technology-skills-stats-2025