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

Published: 19:04 EDT, 19 October 2026 | Updated: 19:04 EDT, 19 October 2026 This country risks falling behind Europe and China due to a skills crisis in manufacturing and technology, inventor Sir James Dyson has warned.The tycoon highlighted figures which show only one in 11 UK graduates studied engineering or related subjects – far fewer than in countries such as China and Germany.He has backed a report which calls for technical institutions to be set up in towns across northern England so that prospects for young people can be improved.The study, by think-tank Policy Exchange, says that although there are more than a million 16 to 24-year-olds who are not in education, employment or training (Neets), there are 250,000 job vacancies which employers cannot fill because applicants lack the required skills.Sir James said: 'Britain doesn't produce enough engineers. Only about one in 11 British graduates studied engineering or related subjects. 'Without them, we can't make things, invent new products and technologies - or compete against the rest of the world.' Labour peer Lord Blunkett also backed the report, saying: 'Differential access to skills is one of the key drivers of regional inequality across Britain. 'The post-16 journey is vital for the needs of both SMEs [small and medium-sized enterprises] and the large infrastructure programmes, which will be the driving force of substantial economic growth.' Sir James Dyson highlighted figures which show only one in 11 UK graduates studied engineering or related subjects - far fewer than in countries such as China and GermanyIt comes after Prime Minister Andy Burnham admitted that the UK faces an 'economic catastrophe and moral failure' because of the Neets crisis. He vowed major changes to the welfare system, providing more support to get young people into work and only handing out benefits as a 'backstop'.On Monday, he told LADbible, a website for young adults: 'I don't think we've woken up to what it's like to grow up in your generation. It's harder and we're not doing enough to support you.'Labour grandee Alan Milburn, whose review of youth unemployment will be published next month, also told The Guardian: 'We need to redistribute money from the welfare system to more employment support if we are going to end the Neet crisis.'The Policy Exchange's report stated that 'the prospects for the youth of this country look increasingly dismal'. It said Britain had a labour market which is 'undersupplied in skilled trades yet oversupplied in graduates'.In 2023, engineering, manufacturing and construction accounted for just 9 per cent of UK graduate degrees, compared with an average of 13 per cent across developed countries and as high as 25 per cent in Germany and 33 per cent in China.More people attend applied higher education institutions rather than universities in other countries, with 57 per cent of students at technical colleges in the Netherlands and 51 per cent in Finland.The report hailed the New Model Institute for Technology and Engineering in Hereford – where students are taught engineering skills in a nine-to-five working week and can gain a degree in two years – as a blueprint for the future. It called for the Government to set up a £50million fund to create ten more of the institutions.