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Young people hit hardest as faltering economy impacts on labour market

The Government must back five key areas to secure jobs growth

Commenting on today’s labour market statistics, Andrew Sissons, researcher at the Big Innovation Centre, based at The Work Foundation, said:

“The labour market has taken a dramatic turn for the worse. With the economy barely growing over the last year, it was only a matter of time before we began to see a serious rise in unemployment. The private sector is not creating new jobs quickly enough to replace those being lost in the public sector. Young people have borne the brunt of this pain as they often lack the skills and experience to compete in what is an increasingly tough labour market.

“While job losses have been overwhelmingly concentrated in the public sector, other areas such as retail and financial services have also seen worrying declines. It is only the strongest parts of the economy – professional and business services and healthcare – that have created any significant new jobs in the private sector, and this private sector job recovery must be broadened over the coming months.

“There can be no short-term fix for this rising unemployment. A return to solid balanced economic growth is the only solution. We are calling on the government to adopt a new approach to its economic policy, which focuses on putting in place the conditions for growth in the parts of the economy that have real potential to create new jobs. These range from existing strengths like healthcare and business services, to new growth areas such as the low-resource economy (e.g. renewable energy), the digital economy and ‘experiential’ services (improving consumer experience). Unless the government throws its weight decisively behind these areas the labour market will continue to look extremely bleak for the foreseeable future.”

A new report published today by the Big Innovation Centre calls on the government to focus on five areas with the greatest potential to generate new jobs in the UK economy. The next wave of innovation: Five areas that could pull Britain clear of recession argues that the government must deal with the fundamental issues that are holding back growth in these areas and outlines some of the specific policies that each of these areas of the economy needs.

Notes to editors

  1. Comparing June with March the public sector shed 111,000 jobs, while the private sector only managed to create 41,000.
  2. Those aged 18-24 saw the sharpest rise in unemployment. An extra 77,000 individuals in this age group were unemployed in the three months to July compared with the previous three months.
  3. Andrew Sissons is available for interviews, briefings and written comment. Experts are also available for briefings, interviews and comment on regional dimensions and youth unemployment.
  4. The report, entitled The Next Wave of Innovation: Five areas that could pull Britain clear of recession, and full press release are available at
  5. The Big Innovation Centre is an initiative of The Work Foundation and Lancaster University. The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks.

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