Demand for graduates and those with vocational skills will continue to rise over the next few years while the long-term decline in blue-collar, manual occupations continues.
In its annual review of the economy and employment, the Institute for Employment Research at Warwick University says the fastest expansion in employment will be in professional occupations and "personal service" sectors such as leisure, tourism and catering.
Employment in these categories is projected to increase by 2.5 per cent a year between 1997 and 2006. Demand for managers and administrators will also be above average, notching up 1.5 per cent growth a year. These rates compare with a rise of 0.7 per cent a year for total employment.
Robert Wilson, principal research fellow at the centre, said the trend is for entrants to be better qualified: "Having a degree will increasingly be seen as a necessary requirement for many occupations. Even nursing is slowly moving towards all-graduate status."
The report says information technology has led to the displacement of jobs, which on the production line have been taken over by computer-controlled machinery. It will also reduce demand for clerical and secretarial skills across all industries, with jobs in these categories projected to fall by 20,000 a year.
But IT has also opened up areas and created jobs for professionals skilled at managing and operating the new technologies.