A skilled workforce is the bedrock of any modern economy. In our increasingly digitised and automated workplace, that is more true now than ever. That is why I was pleased to read James Withers’ recent review of skills provision and development in Scotland and, importantly, the opportunities we have to improve the system.

Withers’ review has correctly identified that we need major structural changes if we are to build a workforce with skills fit for the future. In financial and professional services alone, for instance, Scottish Financial Enterprise estimates the industry may need to fill as many as 50,000 key vacancies over the next three years, many of them in technology growth areas like data analysis, cyber security, AI and software development. That is a significant skills gap, and our sector is not alone.

As Withers notes in his report, simplifying the skills landscape will be an important first step in the right direction. As it stands, skills provision is too complex and cluttered to be truly effective. By streamlining and rationalising the skills landscape, we will be able to better understand what needs to be done and where, and act quickly to plug emerging gaps.

It is critical that skills provision is not only a top-down exercise, but is industry-led. It is employers themselves who best understand the workforce needs of their business now and in the years ahead. We already have some of these structures in place – not least through the successful creation of the Developing the Young Workforce programme, which has made significant progress.

This is more vital now than ever. Technology and the digitisation of industry is proceeding at pace, financial services is a globally competitive industry, and there is a serious risk the Scottish workforce will be left behind. We have all seen news reports about the development of programs such as ChatGPT and how they might affect employment going forwards. This is not some science-fiction fantasy, but a live prospect, with automation and artificial intelligence set to play an ever-increasing role in industry in the years ahead. It is vital our workforce has the skills to anticipate and adjust to not only face the challenges, but also seize the opportunities, of this rapidly changing environment.

We recognise that for many people upskilling or reskilling is not straightforward. In our own sector, we know that misconceptions and negative stereotypes can put people off considering a career in financial services, and are working to tackle such misunderstandings, particularly among younger workers. We also need to diversify our talent pipeline and encourage people from all backgrounds to consider a career in financial services. We value our partnerships with education bodies and third sector partners who help us enable and optimise this engagement. Our sector’s skills and inclusion action plan, endorsed by Scottish Government, breaks down into three key action areas: pathways, promotion and skills. Earlier this year, under the "promotion" theme, we launched our A Future in Finance programme, which is designed to encourage young people to consider a career in financial services and challenges the myths and stereotypes about who works in our industry and the types of roles available.

The Scottish Government will, of course, respond to the Withers Report in due course. But it could not be more important that we – as businesses, industry, government and society – get this right. The consequences of not doing so, for our economy and our people, will be long-lasting and severe.

Sandy Begbie CBE FRSE is Chief Executive of Scottish Financial Enterprise, and National Chair of Developing the Young Workforce