The UK’s Open University, an academic institution in the UK, has stated that the UK must improve the employability of young people to improve economic growth, otherwise it misses out on £45 billion of GDP.

Steve Hill, External Engagement Director at The Open University, believes that the UK should urgently consider more high-quality, work-based training options, which tailor skills provision to the world of work.

“The UK has long suffered from the so called productivity puzzle, which sees us lag behind our G7 counterparts in terms of output per worker. The NEETs (Not in education ,employment or training) problem is another facet of the fact that the skills needs of businesses up and down the country are not being met, and is of course a tragedy for a generation of young people as well.”

The latest ONS figures on young people not in education, employment or training (NEETs) show an increase of 14,000 NEETs between April and June to hit 857,000 young people. Open University states that reducing this rate amongst 20-24 year olds could have a significant impact on the UK’s GDP. If the UK could match Germany’s rate of 10.1% rate, the country could reap a £45 billion economic bonus.

“We need to adapt our skills pipeline to provide businesses with employees who have the relevant know-how and experience of the workplace and to provide young individuals with the tools to boost their employability,” Hill said.

Hill also stated that work-based forms of training, including the Higher and Degree Apprenticeships, which are being launched ahead of the government’s Apprenticeship Levy in April 2017, provide an opportunity for businesses and individuals alike.

“The potential for a £45 billion boost to GDP if we can match Germany’s youth employment record should make us consider what it is that Germany is doing so well. The attitude towards vocational training is one of the biggest things which sets them apart, and that’s where the changes to apprenticeships, which are taking place here are so exciting. There’s real potential for a shift in the UK and that will be a very good thing for businesses and Britain’s young people,” Hill said.