Skills crisis could see the UK fall behind EU and China, says Dyson

By the Editorial Team · Tuesday, October 20, 2026

The UK is facing a critical shortage of skilled workers in manufacturing and technology, with fewer graduates in engineering compared to countries like Germany and China, and over one million young people not engaged in education or employment. Experts and policymakers are urging the government to invest in technical education and create specialized institutions to bridge this skills gap and boost economic growth.

The United Kingdom faces a growing skills crisis in manufacturing and technology that could hinder its competitiveness compared to countries such as China and Germany, industry figures and policymakers have warned. Inventor Sir James Dyson highlighted that only one in 11 UK graduates studied engineering or related subjects, a significantly lower proportion than seen in many developed countries. He emphasized that without a sufficient number of engineers, the country risks falling behind in innovation, production, and technological advancement.

A report by the think tank Policy Exchange, supported by Sir James Dyson and Labour peer Lord Blunkett, notes that while over one million young people aged 16 to 24 in the UK are not in education, employment, or training (NEET), there remain approximately 250,000 job vacancies that employers struggle to fill due to a shortage of the necessary skills. Lord Blunkett pointed to unequal access to skills training as a major factor driving regional economic disparities, stressing the importance of developing post-16 education pathways to support both small and medium-sized enterprises and larger infrastructure projects vital for economic growth.

The report paints a stark picture of the UK's labor market, describing it as undersupplied in skilled trades yet oversupplied in graduates with degrees in less technical fields. In 2023, only 9% of UK graduate degrees were in engineering, manufacturing, or construction, compared with 13% on average across developed countries, and significantly higher percentages in Germany (25%) and China (33%). It also highlights differences in higher education approaches, with countries like the Netherlands and Finland seeing a majority of students attending applied technical colleges rather than traditional universities—57% and 51%, respectively.

One example of a potential solution is the New Model Institute for Technology and Engineering in Hereford. This institution offers a two-year degree program combining a nine-to-five working week with focused engineering education and has been praised as a model for addressing the skills gap.

Calls have been made for the UK government to establish a £50 million fund to create up to ten similar technical institutions, aimed at improving opportunities for young people, particularly in northern England, and strengthening the country's skills base.

The urgency of the skills shortage has also been a focus for politicians. Prime Minister Andy Burnham described the NEET situation as an “economic catastrophe and moral failure” and committed to reforming the welfare system to prioritize getting young people into work, with welfare payments serving only as a last resort. Similarly, Labour figure Alan Milburn has advocated for reallocating welfare resources towards employment support to better address youth unemployment.

Together, these voices highlight the challenges and potential responses to a skills crisis that threatens the UK’s future industrial and technological competitiveness.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.