Kay Smith: Counting on your skills as an economist

Their work lies at the heart of government policy making but competition for careers is tough, finds Kay Smith

Economics was once dubbed the dismal science. However, that was before it was understood to be not merely a set of dry theoretical concepts but an essential and practical underpinning to current policy making in areas such as renewable energy, education and the welfare state.

Jobs are available with the Westminster and Scottish-based national governments as well as with banks and independent consultancies. The Scottish Government has 65 posts located in Edinburgh or Glasgow. UK-wide, there are around 1.000 posts. Honours graduates, or those with a postgraduate degree in economics and with less than three years’ work experience can apply for entry as assistant economists through the “fast-stream scheme.” Student vacation placements lasting up to 12 weeks are also available.

Competition is fierce for positions, with the career possibilities plus a starting salary of £27,000 proving highly attractive.

Andy Ross, depute director of the UK-wide Government Economic Service (GES), advises candidates who get to the interview stage not to get too hung up on esoteric theoretical concepts.

“Look at the world around you. What is the opportunity cost of that toothbrush before and after you buy it? Is the opportunity cost of that house only its price? Is this park a pure public good? You should present yourself as a living, thinking economist,” he says.

Economists bear an influence in the Scottish Government enterprise and environment directorates, as well as in governance and communities, education, justice, health, social care and finance. No one area can work in isolation of the other. The Scottish Government’s chief economist, Gary Gillespie, says: “Evidence is key to the formation and analysis of Government policy and economists work closely with statisticians and social researchers drawing together key evidence for different areas of policy. The ability to work in partnership with other analysts is crucial, as is being able to present and communicate often complex and conflicting evidence in a clear and transparent manner.”

A job with the government offers security and a good pension scheme but work in independent consultancies can provide the stimulus of working with a diverse range of clients.

A degree majoring in economics is a base-line starting point although, to be competitive, a job candidate would best have a specialist masters degree as well, according to Dr Peter Kenway, co-founder and director of think tank the New Policy Institute. He has a joint honours in maths and economics.

“Economics is about contributing to the policy-making process but there has to be a willingness to do quantitative and statistical work,” says Kenway, who went on to do a masters degree and a PhD. “The masters was important, but I would advise a break between taking a first degree and a masters to make sure it is where your heart lies. A PhD may not have been absolutely necessary, however,” he advises.

Dr Kenway began his career in the Department of Transport. “I had to demonstrate ways of valuing various options in the allocation of resources. These ways may not seem the immediately obvious – such as recommending a bus travels along a quiet country route. It may be more expensive to run, but the net effects in bringing widespread economic benefits to an area may be greater.”

Dr Kenway went on to found the New Policy Institute in the 1990s, a London-based body he describes as “a self-appointed think tank”. The majority of its clients are charities including the Joseph Rowntree Trust for whom it prepares its influential Monitoring, Poverty and Social Exclusion annual reports – including one on Scotland.

Recently it has also, for example, covered the impact of insulation
in domestic properties for Energy UK.

The current challenging economic times with its threats of a triple-dip recession are good for business however. “Economics is somewhat subject to fashion. Currently it’s in fashion. When everything is going well, nobody thinks they need an economist but at the first signs of a problem, they change their minds.”

Not everyone working in economics needs to have an academic background as extensive as Dr Kenway’s, however. Graeme Blackett’s academic credentials stop at an honours degree from Strathclyde University. But then he went on to gain valuable experience as a junior researcher with private consultancies. Eleven years ago, he became co-director of the independent consultancy Biggar Economics based at Roslin in Midlothian.

Among other things, the consultancy has worked for the University of Edinburgh, producing an economic impact assessment of its new FloWave combined wave and current test tank, designed to support the development of the marine renewable energy sector. It has also carried out a feasibility study for the Royal Highland and Agricultural Society of Scotland (RHASS) of a Scottish Centre of Excellence, focused on the food and drink sector.

While mathematics is an important skill for economists “they also need an understanding of the wider context, in other words, what the numbers mean. It is also important to have the ability to write and to communicate technical data to a wider audience,” Blackett advises.

There will always be an element of insecurity among economists as they do not occupy a protected professional position in the same way as chartered accountants and lawyers, who have their own regulatory bodies and in effect operate a closed shop against the unqualified and unregistered, warns Blackett.

“Economists are more seen as a jack of all trades – and other professionals can muscle into their patch offering to do research and consultancy work,” he says.

The route towards a career in economics could start in school. Last year, 586 pupils sat Higher Economics, with an 87 per cent pass rate, while 81 sat Advanced Higher Economics with a near 100 per cent pass rate. One review of candidates’ performances in Standard and Intermediate Grades found many were struggling with basic concepts such as average weekly gross pay while basic maths skills were lacking among some as they struggled to understand the effects of an identical percentage rise on different levels of salaries.

And although the average standard of Higher-grade pupils was on the up on previous years, examiners noted they were in need of a good dose of “quality” newspaper reading in order to improve their knowledge of current economic events – always a requisite of a good economist.

See www.ges.gov.uk for information on a career as a government economist