Why the ‘earn while you learn’ model is a competitive necessity

While we have spent years supporting a university-first narrative, our industries are crying out for skills, and, despite Scottish government covering fees, there remains a cost and debt of university education. In 2026, the “earn while you learn” model is not just a nice alternative, it is a competitive necessity. For a young person, it is the difference between a crippling loan and a starting salary. For a business, it is the difference between a talent shortage and a tailored, high-performance workforce.

While university will be the right path for many people from all backgrounds, apprenticeships are a vital way in which we can lower youth unemployment – which worryingly recently spiked to near 12 per cent in Scotland – and poverty, create a skilled work force, and ultimately drive economic growth across Scotland. For many young people, the “earn while you learn” benefits are clear.

In recent weeks, there has been much talk about the tremendous financial burden of graduate debt. Apprenticeships offer an alternative to this with modern apprentices earning a wage from day one while working towards industry recognised SCQF qualification. Graduate apprenticeships allow young people to gain a full honours or master’s degree while receiving a salary. Added to this is that 91 per cent of modern apprentice completers are in employment six months after finishing. The benefits to young people are immense.

And for employers, apprenticeships are not just a corporate social responsibility exercise but a strategic response to a tightening labour market in which firms repeatedly report labour costs as challenging. One of the biggest advantages is that modern apprenticeships are co-designed with industry. This ensures that skills being taught are those the sector requires in 2026, particularly in Scotland’s key growth sectors of financial services, renewable energy and life sciences. These employers report that apprentices have significantly improved job performance within their teams and a high retention rate. Apprenticeships are a primary tool for “widening access”. Employers who use these programmes tend to have more diverse workforces, with rising numbers of care-experienced and minority ethnic starts.

However, it is ultimately the economic benefit to Scotland of apprenticeships which perhaps creates the most compelling case. For every pound of public money invested in a modern apprenticeship, Scotland receives five in return. The current investment generates around £450 million in annual tax revenue for Scotland, which helps fund public services such as the NHS and key infrastructure projects.

The takeaway for the private sector is clear: waiting for the traditional education system to solve the skills crisis is too narrow a strategy. By co-designing curricula and hiring for potential over pedigree, Scottish firms are not just “doing good” – they are securing their own pipelines and reducing the costly churn of a tightening labour market.

Ahead of the election we are calling for the Scottish government to help make apprenticeships even more appealing for employers; by passing on the full amount employers pay via the apprenticeship levy. The bottom line is Scotland needs more apprenticeships and employers are already paying for them through the levy.

If we want a Scotland that is competitive, solvent, and skilled, we must stop treating apprenticeships as a social project and start treating them as one of our main engines for economic growth. We owe it to our young people.

Sandy Begbie CBE, CEO of Scottish Financial Enterprise