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Lack of basic IT skills impacting growth prospects for UK SMEs

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UK small businesses are stuck in a growth and profits limbo due to a shortfall in IT skills. Both the Corporate IT Forum Education and Skills Commission and insurance provider Simply Business have recently published reports on addressing the IT skills crisis facing the UK. 

The commission’s findings identified a number of causes for skill shortages that are affecting more than half of large IT-dependent organisations. These range from outsourcing policies and an ageing workforce, through to insufficient understanding of IT and what it enables in both the boardroom and the shop floor.

Employment in the IT industry is expected to grow at nearly five times the UK average over the next decade. Yet, careers support and education for young people interested in pursuing a career in IT is in disarray. 

In April 2012, the government passed the statutory duty to provide impartial careers guidance to individual schools. However, the commission is concerned by the “requirement of schools to meet the costs of provision from their overall budget and the lack of guidance on minimum investment levels,” said John Harris, commission chairman and vice president of global enterprise architecture at AIMIA.

The report focuses on school years, finding an IT education and careers system in complete disarray. It makes 20 recommendations on education, careers guidance and the development of the new IT curriculum. These include the need for input from a range of major employers who use IT to deliver products and services, rather than just those who are IT developers and vendors. 

The recommendations include:

  • A requirement for schools to ring-fence money for careers guidance and to provide face-to-face advice and STEM Careers events for all year nine pupils;
  • Sufficient government funding to enable schools to have a STEM or computer club;
  • Support for the bulk of the recommendations in the Royal Society Report on the ICT curriculum, including the un-bundling of the curriculum into the three subject areas: Digital Literacy, Information Technology and Computer Science; 
  • Information Technology should be included in the new English Baccalaureate;
  • Incorporation of IT and digital literacy into training program for all subject teachers; and
  • Expanded CPD time for IT and Computer Science teachers to enable placements in organisations across a range of industries. 

Harris showed worries that, if the status quo in IT education remains, a widening skills-gap will take its toll on UK business. “Without the right careers guidance and curriculum there is a danger that in the short-term the situation will only get worse, with employers forced to recruit outside of the UK to fill the gap. Unless immediate action is taken we will have whole swathes of the current generation of schoolchildren who are simply not IT literate enough to function in an increasingly digital world.”

The 2012 techSME index questioned over 4,000 small businesses, revealing that 40 per cent identify a lack of basic IT skills as a key factor hindering their growth. Those affected by skills shortages have also seen their profits hit, as the findings show they are likely to record no annual profit (17.5 per cent), in contrast to tech-savvy businesses with highest overall returns.

The level of IT-phobia varies between businesses, with more established companies in danger of being eclipsed by younger start-ups. Almost half of businesses over ten years old reported a lack of IT knowledge, compared to only eight per cent of those operating for less than two years. 

In addition, younger businesses are by far the most active on social media, with 45 per cent operating for up to two years using social tools, compared to just a third of those in business for over five years.

The research revealed that IT spend is low on the agenda for the majority of small businesses. One-in-ten companies admitted they haven’t invested anything in IT in the last year and even more anticipating zero spend in the coming year. 

Jason Stockwood, CEO of Simply Business, said: “Our findings show that IT is no longer an optional extra for small businesses. Companies of all sizes should be taking advantage of the technologies at their fingertips, or they will be quickly left behind in a competitive marketplace.

“SMEs are frequently seen as one indistinct group, with the major focus on either young start-ups or larger businesses offering significant employment. Our concern is that those in between the two are getting stuck in ‘limbo,’ partly due to a failure to embrace new IT tools and innovation. At a time when the economy is desperate for growth, it is crucial to support these businesses, giving them the skills to take the next step on their business journey.”

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