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Sector Information

Cogent is the Sector Skills Council for the science-based industries, including: chemical; pharmaceutical; nuclear; oil and gas; petroleum; and polymer. The main activities of these industries include:

  • exploration for and extraction of oil and gas from the UK continental shelf
  • refining of crude oil
  • storage, blending and distribution of petroleum-based fuels
  • retail sale of fuel on forecourts
  • manufacture of lubricants and bitumen, chemicals, consumer products and active ingredients for the pharmaceutical industry
  • nuclear propulsion
  • defence – nuclear deterrent
  • nuclear fuel cycle and heat generation, plus decommissioning and clean-up
  • conversion of raw polymer into products and components
  • manufacturing and designing machinery and equipment for polymer processing
  • manufacturing and installation of signs
  • design, innovation and research and development linked to new material and their applications

The Cogent sector contributes £49 billion to the UK’s Gross Value Added (GVA). Productivity is £98,394 GVA per worker, compared to an average of £31,419 in the UK. There has been a decline in the sectors GVA share from 7.2% in 1997 to 6.4% in 2006.

Key statistics on the sector:

  • covers over 19,000 employers
  • there are 503,000 people (excluding contractors) working in the sector
  • industry estimates (which includes contractors) suggest 906,000 people are working in the sector
  • sector accounts for 2% of all employment in the UKs
  • accounts for 6.5% of the UK GVA
  • 68% of employers in the sector have between 1-10 employees
  • 2% of employers have more than 200 employees
  • employs 12% of the manufacturing workforce
  • accounts for 7% of UK manufacturing enterprises
  • it is estimated that a further £2.4 billion would be added to GVA if workforce skills were improved

Sources: Cogent LMI report June 2009 and Cogent Sector Skill Needs Assessment 2006



Employment

Employment in the sector is expected to decline slowly over the next 10 years as with all industries based in primary and manufacturing industries. Cogent is one of 14 sectors predicted to decline over the next 10 years. However this hides trends of growth within industries and sub-industries in the sector. For example: in the chemicals industry demand for pharmaceutical preparations is increasing; the oil and gas industry is currently in a period of expansion with increased activity driven by the high oil price and; recycling and medical equipment manufacture are growth areas of the polymer industry.

The Cogent workforce is dominated by full-time employment (86%, compared to 74% across the UK) and this share is projected to decline by 3% over the next 10 years. Part-time employment is predicted to increase over the next 10 years by 1.5%, whilst self-employment is to decrease by 1.4%.

Sources: Cogent LMI report June 2009, Cogent Sector Skill Needs Assessment 2006 and Working Futures 2006

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Employment forecasts

Key statistics for the sector, by 2022:

  • total employment in the sector will be between 401,000 and 523,000 employees
  • there will be an estimated 145,000 retirements
  • an estimated 72,000 Technicians and Operators will need to be replaced
  • an estimated 55,000 Managers and Professionals will need to be replaced
  • 99,600 workers are forecast to enter the sector
  • 31,600 apprentices will have entered the sector
  • 68,000 graduates will have entered the sector

N.B. These data are based on current forecasts.

Source: Skills for Science Industries 2008

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Recruitment and skills shortages

As the Cogent industries have either static or decreasing workforce volumes, recruitment is predominantly a result of replacement demand, i.e. turnover and retirements. The exception is the oil and gas industry where employment has increased due to high levels of industry activity stimulated by the oil price.

All of the Cogent industries have older workforce profiles highlighting the need for recruitment. The oil and gas and chemical industries have the highest proportions of workforce in the 55 plus age group. However, all of the Cogent industries, with the exception of polymers, the proportion of workforce in the 16-24 age groups is lower than the national average.

The retiring workforce is also more pronounced in Skilled Trades and Process, Plant and Machine Operative occupations with higher proportions than average in the 55 plus age group. The workforce is concentrated in these occupations so a concerted effort will be required to cope with replacement demand. There is also a relatively low volume of the workforce in the 16-24 age group for Skilled Trades, Associate Professional and Technical workforce.

Turnover within the industries in the Cogent sector is in line with that found across the broader manufacturing sector.

Skill shortage vacancies are as much an issue for employers in the Cogent sector as for all employers. Approximately one in four vacancies are hard-to-fill as a result of skill shortages - however the problem is more acute in the oil and gas industry. Skill shortage vacancies are most prevalent among:

  • associate professional and technical workers (38% of skill shortage vacancies) - for example process and maintenance technicians
  • process plant and machine operatives (18%)
  • sales and customer service staff (15%)
  • Among applicants, skills shortages are mainly for technical and practical skills. Other skills lacking were problem solving, management, communication, and team working skills.

As there is a great demand for Technicians and Process & Machine Operator workforce by the sector (and other manufacturing/process industries) there is rising concern – particularly over the future supply of this type of workforce through the contractor supply chain. There has been a decline in people interested in craft and technician type work. Young people are choosing to go to university instead of embarking upon an apprenticeship. This is particularly an issue raised by Cogent sector employers in North East of England.

Across the sector, employers also question the skills of graduate engineers and scientists. There is a perception that many new graduates lack the softer/core skills required in the workplace, such as team working, communication and report writing skills.

Source: Cogent Sector Skill Needs Assessment 2006

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Future skills supply

This sector is in competition with other science, engineering and technology based industries for skilled and qualified workers. The number of potential workers is decreasing so attracting these workers has to be a priority.

While the Cogent sector industries make a significant investment in training this is largely health and safety focused. More investment is needed in up-skilling and maintaining the current workforce skill levels to ensure that it can meet the changing needs of the sector.

To resolve the current skills shortage some employers are recruiting from the wider European Union and Eastern block countries. However, this does not address issues relating to the education and training system in the UK supplying the sector with potential recruits.

Source: Cogent Sector Skill Needs Assessment 2006

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Future drivers in the sector and its industries

Several external factors impact on the sector and its primary aim to ensure sustainability of the chemical, nuclear, oil and gas, petroleum and polymer industries.

For continued productivity, competency and innovation in the sector it is dependent on:

  • a range of science, technology and engineering skills
  • investment in ensuring the right people with the right skills are in place

The UK has strict regulatory and employment frameworks which increase operating costs. The current fiscal regime is causing concern and uncertainty in future investment by the oil and gas industry. Energy related policies and defence policies all impact on the sector. The propulsion and weapons programmes are set to continue for the next few years. Over the last few years changes in health and safety regulations, together with changes in environmental policies, have resulted in additional process and monitoring requirements affecting the operating costs and, therefore, the competitiveness of the sector.

The sector will continue to face greater competition from both home and overseas companies. Companies in the sector, and particularly those in niche markets, will need to produce higher value added quality processes, products and services.

Source: Cogent Sector Skill Needs Assessment 2006

Further future changes and drivers in the sector are focused on: economic changes such as globalisation; social drivers such as skills supply and reputation; and, finally, technical drivers based on technological solutions and the environment. The specific impact of some of the changes on the sector’s industries follow:

Chemical industry
  • It is expected to become more globalised in the future with worldwide distribution and consolidation of companies at an international level.
  • 75% of UK chemicals production is exported and activities are being refocused to higher added value consumer and speciality chemicals.
  • Public perceptions of the industry are deteriorating so new product developments is a key driver in changing the face of the industry.
  • To maintain a competitive edge, this industry will need future support as new technologies and business improvement techniques are implemented.
  • Future environmental performance will continue to focus on reducing CO2 emissions, energy and water usage.

Source: Cogent Sector Skill Needs Assessment 2006

Nuclear industry
  • It provides services to Europe and East Asia and it is expected that decommissioning and domestic clean-up will be in international demand.
  • 18% of the electricity for the UK market is provided by the nuclear industry. Customer demand for energy is expected to rise while nuclear capacity is declining.
  • There is a potential extension of the life for some nuclear facilities.
  • Nuclear energy is increasingly becoming seen as a reliable source of clean energy for the future.
  • It is focused on developing new technologies for enhancing safety, for effective waste disposal and for cleaning-up and decommissioning.
  • A future challenge for the industry is effective transition from operating to decommissioning activities, and the need to develop higher level skills.

Source: Cogent Sector Skill Needs Assessment 2006 and Cogent LMI report 2009

Oil and gas industry
  • UK operations in oil and gas are more expensive due to higher labour costs and regulatory compliance, but successfully competes in the global market. The UK workforce is employed globally, but there is a growing demand to train indigenous workers.
  • In the developed world, demand for oil and gas is slowing.
  • Exploration for new fields in the UK continental shelf has been increasing in the current climate of high oil prices, which will impact through the rest of the industry.
  • Technological developments are centered on improving exploitation of new and mature fields.
  • The industry is continually working towards improving its environmental performance.

Source: Cogent Sector Skill Needs Assessment 2006 and Cogent LMI report 2009

Petroleum industry
  • The petroleum industry is becoming increasingly globalised with a declining number of players.
  • Economic incentives to increase investment in refining, part of the petroleum industry, has been the result of increasing world demand.
  • Consumers and government policy are driving the demand for more sophisticated environmentally friendly products which is changing both processes and product development.
  • IT development in the development of cleaner fuels, transport of fuels, engines, refinery development and electronic data exchange are likely to be key in driving the industry in the future.
  • The industry will need to continue enhancing environment management processes in the future.

Source: Cogent Sector Skill Needs Assessment 2006 and Cogent LMI report 2009

Polymers industry
  • Increasing competition in the polymers industry has resulted in operations being based outside the UK and is a significant concern for the future of the industry.
  • Low labour costs in China, India and Eastern Europe have put pressure on the polymers industry. The industry has changed to rapid delivery of bespoke products for domestic customers with a move to more niche products.
  • Consumers are driving the demand for stylised polymer based products which is, and will continue to changing the industry in the future.
  • As in the chemical industry, to maintain a competitive edge, this industry will need future support as new technologies and business improvement techniques are implemented
  • Innovation, design and technology enhancement will provide continued growth opportunities.

Source: Cogent Sector Skills Needs Assessment 2006

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