The UK’s modern industrial strategy identifies eight sectors with the potential to drive future growth – all of which depend on people with higher-level skills. At the same time, across these sectors and beyond, workers need to adapt to the changing skills requirements, as the AI and green transitions reshape the jobs people do. While everyone wants to benefit from economic growth, not everyone is willing or able to invest in creating the skilled workforce needed to deliver it. The latest evidence on employer investment in skills points in the wrong direction. The proportion of employers providing training fell by 6 percentage points between 2011 and 2024, while the average investment in training per employee fell from £2,400 to £1,700 according to the government’s 2024 employer skills survey. Firms face genuine barriers to investing in training. They may struggle to meet the costs, be unable to release workers for training, or worry that workers will leave for another employer after being trained. These barriers vary across sectors and places. This raises the question of whether existing policy interventions are sufficient to help employers overcome the key barriers they face in different contexts. In our new policy report exploring international approaches to increasing employer investment in training, the lesson is not that the UK should copy and paste another country’s policies. Rather, we need to adapt the principles underlying successful models to the UK’s own institutional context, where a lot of the relevant pieces are already in place. Policies to incentivising investment in training cut across government departments and devolved regional governments, while the relationships between employers and education or skill providers are often local. This results in a coordination problem, where policy responses may be fragmented. We need stronger mechanisms to coordinate employers, education providers and government around shared priorities. Two institutions in England could play a particularly important role. First, local skills improvement plans (LSIPs) could be better aligned with the industrial strategy and local growth plans by adopting a whole-system approach and embedding higher education more systematically. There are lessons here from Wales’s regional skills partnerships, which demonstrate the value of bringing partners together around shared regional priorities. The latest guidance on LSIPs also provides opportunities to develop this approach. Second, Skills England should have the capacity to convene partners and build new evidence. International experience, such as Canada’s Future Skills Centre, points to the value of institutions that not only oversees programmes, but also invest in innovation and experimentation. Giving Skills England a stronger mandate for applied research, knowledge mobilisation and innovation would allow it to bring together government, employers, training providers and places, while building the evidence needed to direct support towards interventions that can have the greatest impact. But better coordination is also needed across national and local government. We recommend that a dedicated cross-government policy workstream be created to produce actionable recommendations. The newly established Number 10 North, focusing on local economic growth and devolution, can also help improve the coordination between different levels of government. We suggest that the organising principle for skills policy should be sectoral, particularly around the industrial strategy’s eight key sectors. Drawing on lessons from sectoral training programmes in the US, the government could enable places to pilot partnerships between employers, colleges and universities in sectors where there is sustained demand for skills and potential for higher wages and progression. Sectoral employment programmes can also be linked to social impact investment opportunities where they can generate measurable improvements in employment and earnings for disadvantaged groups. Financial incentives and public procurement conditions can provide additional levers to address barriers to employer investment. But these should be targeted towards firms, sectors or types of training where they are most likely to generate additional investment, rather than subsidising training that would have happened anyway. The UK needs more than an individual new policy to implement. It needs national institutions that can build and share evidence, local institutions that can coordinate action, and policy tools that make it easier for employers to invest where the economy needs skills most. Skills are essential for growth, but businesses and governments can only benefit from growth opportunities and successfully navigate AI and green transitions if we create a system that allows them to innovate, experiment and ultimately, invest in people.