Chemistry’s Contribution: Workforce trends and economic impact

A new report from the Royal Society of Chemistry highlights how important the chemical sciences sector is for the present and future prosperity of the UK and its regions, and calls on Government to deliver against its investment commitments in research and development to boost productivity and fully deliver on its levelling up agenda for the UK’s green economic recovery.

As the UK approaches the end of the transition period of its EU withdrawal process – amidst a COVID-19-driven recession and the Government pushing its levelling up agenda for the nation’s future prosperity – the report, conducted by Cambridge Econometrics, demonstrates the substantial economic contribution of chemistry using professionals at an average of £83bn per year and their through skills and innovation to the UK.

Investment in research and development, which is vital in developing crucial talent and the innovations the UK needs to secure long-term economic recovery, still lags behind cohort nations at 1.7% GDP compared to Germany’s 3.1%.

Given the agility and resilience chemical science businesses have demonstrated during the COVID-19 pandemic, the Royal Society of Chemistry is calling on the Government to ensure critical financial support to research intensive SMEs to retain talent and innovation within the UK economy and support future economic growth should the sector experience a further lockdown.

In light of this report, the Royal Society of Chemistry is calling on government to ensure it delivers on its commitment to invest 2.4% of GDP in R&D, to retain crucial chemical sciences talent and deliver the innovations the UK needs to address the pandemic and grow back green. 

Professor Tom Welton, President of the Royal Society of Chemistry, said: “The chemical sciences make a significant contribution to the UK, playing a vital role across essential sectors in beating COVID-19 and delivering a green recovery for the UK.

“The government has a real opportunity to drive that recovery by ensuring it prioritises long-term investment in R&D to boost and sustain productivity. The chemical sciences in the UK are world-leading and are absolutely critical in responding to the many challenges COVID-19 has thrown at us.

“The agile, research-intensive SMEs that form such a significant part of our sector have clearly demonstrated they can operate in a COVID-safe environment – their ability to innovate and adapt is one of their most valuable strengths – but it’s equally important to highlight that there is a limit to how resilient they can be in the context of ongoing economic threats.”

Cambridge Econometrics’ research of a range of reputable data sources shows that:

• In 2019 there were 275,000 chemistry-using jobs in the UK, with a further 425,000 jobs supported by this workforce throughout the UK economy.
• It also demonstrates that Chemical Science professionals are highly skilled and make a significant contribution to the UK economy, generating on average £83bn in economic output (2013-19) and returning £3.2bn to the exchequer (2018).

Professor Welton continues: “We are calling on Government to carefully consider sector-specific conditions when deciding on business or sector closures in the face of second wave of the pandemic. Another lockdown means specific financial support will be absolutely critical to research-intensive SMEs, to retain talent and ideas within the UK economy and support future economic growth.

“We must ensure that strategies for economic recovery include processes to improve place-based understanding of sector capacity and strategies which support levelling-up across nations and regions in the UK.

“In short, the chemical sciences are what you need for the recovery you want”.

The report also contributes to evidence of a growing disparity between the nation’s regions.

While the South East saw the number of chemistry-using professionals grow to 51,093 in 2019 (up from 36,988 in 2013), the North West witnessed a drop of 11,339 (to 30,105) in the same period. This downward trend was reflected in the West Midlands (down 7,968 to 14,305), the North East (down 3,882 to 12,251) and Wales (down 3,996 to 4,981).

Now is the time for action

The RSC’s five-point action plan aims to strengthen the chemistry workforce to enable economic recovery from COVID-19.

1. SME support: Research intensive SMEs in the chemical sciences have clearly demonstrated that they can operate COVID-safe. Government, should consider sector-specific conditions when deciding on business or sector closures in a second wave. If locked down, financial support will be critical to research intensive SMEs to retain talent and ideas within the UK economy and support future economic growth.
2. Place is important: Monitoring is required to inform a place based understanding of sector capacity and strategies which support levelling up across the UK.
3. Chemical science professionals are key to recovery: Effective collaboration between government and professional and sector bodies is essential to supporting environmental and economic recovery.
4. Teacher support: Teachers in the chemical sciences are a diversely and highly skilled workforce. Wider evidence suggests that the most effective teachers have good knowledge of their subject and how to teach it successfully. High-quality subject specific training and development should be an ongoing entitlement for all teachers, whatever stage they are in their teaching career.
5. Chemistry knowledge and skills retention: Chemistry knowledge impacts the generation of an average of £83bn annually for the UK economy. In these challenging times the workforce’s professional standards and underpinning knowledge must be retained within the UK economy to support Government’s ambitions for R&D and deliver a sustainable green recovery.

The report identifies the strong link between skills and innovation, which boosts productivity and economic growth. This link means the chemistry-using workforce plays a vital role in boosting the UK economy and shaping society and our environment. The UK needs a strong chemistry sector that will continue to play this role in the coming years, to help deliver on key health and environmental challenges and to create new jobs.

Skills improvements have accounted for one-fifth of UK labour productivity growth in recent decades. However, skills shortages have a real impact on firms’ day-to-day ability to do business, with higher skills shown to be related to greater levels of innovation. Chemistry-using professionals tend to be highly qualified and are therefore likely to make a significant contribution to innovation and, in turn, productivity and economic growth.

Digital skills are becoming increasingly important across the economy and the chemical sciences are no exception, as highlighted in the RSC’s recent Digital Futures report.

What do chemistry using professionals say about the current climate?

Dr Paul Colbon, CEO of Liverpool Chirochem, said: "At the start of lockdown, we faced a total shutdown of our business operations because our state-of-the-art university-based labs were closed literally overnight. Obviously that was a massive threat to our business and the livelihoods of all our staff in the UK and China, so it was devastating to me personally and professionally.

"As an expanding business, we were in the process of employing three new lab-based chemists, so I felt a huge personal responsibility for their welfare. As we had no way of telling when the labs might re-open, it was a really stressful experience for all involved.

"If there's one thing that we need to see for companies like ours in future, it's clearer communication from the government and heads of universities so that the infrastructure and facilities we rely on so heavily remain accessible – or at very least we know when it will be accessible again."

Jacquin Wilford-Brown, Principal Scientist - Materials Measurement, Formulations at the Centre for Process Industry, said: “Successive governments have proposed varying agendas for increased investment in our regions, from the Northern Powerhouse to the current focus on “levelling up”. Against that backdrop, I am concerned to see the figures in this Royal Society of Chemistry report showing such a clear decline in the number of highly-skilled chemical science roles in the north-east and north-west of England, the West Midlands and in Wales”

“My own region of the North East has seen almost a quarter of chemical science jobs disappear in just six years, although the quality of chemical science remains high. I believe it is crucial that the government provides targeted investment to innovative companies in this region to support local economies and retain top talent, with the return on investment that brings to UK PLC.”

Nikolay Cherkasov, Founder of Stoli Catalysts, said: “We are building a high-efficiency, sustainable chemistry business here in the Midlands and the lockdown was a severe blow to the momentum we were building with customers. Our biggest overall concern for the future is the potential for ongoing downturn in the economy, which could affect the whole scientific sector, including some of our most well-established customers.

“We are really fortunate that, as well as some ongoing grant funding that offers welcome financial security, our facilities at Warwick University Science Park are hopefully unlikely to close in any localised lockdowns, as they are not part of the main university campus. We really sympathise with other growing companies in our position, as many of those are reliant on being able to access laboratory facilities that could be closed overnight, threatening their businesses.

“During the early phase of this pandemic, the furlough scheme helped us to retain our expert staff, so we used the slowdown in existing business to develop a novel chemical reactor. We see that as a real breakthrough in converting pretty much any batch chemistry into a flow process, cutting energy consumption, boosting product yields, quality and productivity. So, while we have been set back in some ways by the pandemic, we have something new to offer our customers that can bring them cost-benefits during the economic recovery and help Stoli continue our growth.

“I hope to see other small, agile companies like ours being supported, particularly by the government, as their ability to provide highly skilled job opportunities, drive growth and exports is good news for the exchequer.”

Croda CEO, Steve Foots, explains that their purpose is to use Smart Science to Improve Lives™. He says: “Chemistry and chemists are at the heart of the Croda growth story and our continued ability to hire the best people will ultimately determine our future success.

“Our ambition and transformational goals have come from within and, I believe, represent a singular, company-wide level of commitment in delivering positive impact. We combine our highly skilled workforce’s knowledge, passion and entrepreneurial spirit to create, make and sell speciality ingredients that are relied upon by industries and consumers everywhere.”