Friday 13 June 2025 5:34 am | Updated: Thursday 12 June 2025 11:44 am

Mind the skills gap: why lifelong learning Is key to economic growth

As jobs evolve and AI reshapes the labour market, aligning education with real-world skills is essential to close the productivity gap and future-proof the workforce, says Frances Haque

We have long talked about the growing divide between what we learn at school and what the economy needs. The difference now is that the consequences are becoming harder to ignore.

Wednesday’s Spending Review reconfirmed that “growth” remains the buzzword of 2025. Delivering it will take more than capital investment and infrastructure projects. It needs a workforce – trained, adaptable and ready to step into the new, evolving jobs the labour market requires.

The Labour Government has made promising early moves, prioritising training through a £3bn apprenticeship budget and £1.2bn per year for upskilling, new Technical Colleges, the growth and skills levy, and recent establishment of Skills England. The next step is delivery – ensuring training aligns closely with businesses’ changing needs.

At Santander we have a privileged window into the changing nature of jobs and skills across our global footprint. AI, automation and ageing populations are just some of the megatrends reshaping jobs as we’ve known them.

Our new global study Tomorrow’s Skills shows that 81 per cent of people across 15 of our core markets believe continuous training is vital to staying in work. One in three worry AI could replace their job altogether.

Yet only around half feel school prepared them properly for work.

This reflects a growing disconnect between education and the realities of the labour market: a gap that risks holding us back from reaching our individual potential, dragging on national productivity.

Upskilling and reskilling are still treated as long-term ambitions rather than immediate priorities. If the UK is to remain competitive, that needs to change.

Time to rethink what ‘education’ means

Traditional education alone no longer equips people with the skills today’s businesses require.

Careers are longer, more varied, and evolve faster. Yet most training still happens before or at the start of working life, with limited support to upskill later on.

The UK system still prioritises knowledge and qualifications over practical, work-ready skills. That’s no longer sustainable. This is especially true for those starting their careers today, who face a world of work evolving faster than ever.

Almost half of UK workers say soft skills, like communication, adaptability and leadership, matter more in their current roles than technical ones. But these skills are still overlooked in education, training and policy.

To build a resilient and competitive economy, we need a system that supports lifelong learning, not just at the beginning.

A shared responsibility

Fixing the UK’s skills gap will require a combined effort. It will take action from government, business, schools, universities.

There are some positive signs. The Government’s new foundation apprenticeships are a step in the right direction, but more is needed to ensure training is accessible throughout working life, not just at the start.

Universities have a part to play too. Many already work with businesses to give students real-world experience and practical skills. At Kingston University, one of Santander’s 75 university partners, students gain experience through Knowledge Transfer Partnerships, blending academic knowledge with practical application.

Meanwhile, businesses are investing in people, offering access to digital learning and tailored AI and leadership courses. As an Economist of twenty-five years, I thought I was done with new qualifications or training. Yet, we’re embracing opportunities presented by AI, data analytics and automation I hadn’t imagined a few years ago. Businesses must step up to provide the right opportunities to adapt and learn.