Business Technology

Smashing Britain’s digital skills bottleneck: The business questions, risks and solutions

9 min read

15 January 2016

Former deputy editor

Two government departments have united to analyse the depth and breadth of the supply and demand issue surrounding digital skills in the UK – Real Business has dissected the extensive report to reveal what smashing the bottleneck can do for the country's economic potential.

The UK’s digital skills gap has been well documented. Virgin’s billionaire boss Richard Branson voiced his thoughts on the matter in March 2015 and said, in a nutshell, children are the future.

“Britain is a digital leader, however our businesses will fall behind if students leave school without vital digital skills,” he opined.

Later in the year, the Tech Partnership found that British businesses require 134,000 tech specialists each year, but 42 per cent of leaders from companies in all sectors admitted they feel it’s getting harder to fill the posts.

As a result, it was noted that there is a “need for businesses in all sectors to embrace tech apprenticeships as a key weapon in the battle for faster business growth”.

With 2016 upon us, Ed Vaizey, minister of state at the Department for Culture, Media and Sport and the Department for Business, Innovation and Skills, commissioned research consultancy Ecorys UK to create a report for his divisions to detail the ongoing problem Britain faces and what can be done to solve it.

The idea is to use the findings to help shape the digital agenda on the government’s productivity plan, which was revealed in July 2015.

Ecorys asked: What is the current demand for digital skills across the economy and what are the different types of digital skills requirements?

It turns out there are three main categories for requirements:

(1) Basic digital literacy

These skills are required to carry out tasks such as internet searches, use of communications apps and knowledge of cyber security. They’re described as a way of “empowering individuals”.

(2) Digital skills for the general workforce

These skills include all of category one and the additional skills needed in the workplace, such as usage of software developed by IT specialists. The report recognised the skills needed will vary based on the company’s industry, but stressed there will be minimum requirements to process information that is relevant for all sectors. This category is with a view of “upskilling for the digital economy”.

(3) Digital skills for ICT professions

The final category, this includes understanding of both one and two, and is defined as the skills for “digitally innovative and creative individuals, organisations and businesses”.

Essentially, these are skills that will not just require knowledge of using software, they are linked to the development of new tech. The study said these are of key importance if the UK is to “compare favourably with other nations in relation to ICT investment and utilisation”.

Defining the trends and needs was achieved by speaking with various “strategic stakeholders”, which included employer-centric partnerships, skills agencies and government bodies.

Continue reading on the next page for the five key risks if the skills gap continues, and the opportunities and recommendations that come with smashing the bottleneck.

Image: Shutterstock

The five key risks

(1) A shortage of appropriate skills for digital jobs means stunted business growth, innovation and development in society.

(2) Failing to supply skills for immediate, medium and long-term demand means the UK’s ranking in IT among other major countries is declining. While the UK’s tech investment is thriving now, it could make Britain an ugly place for business.

(3) Beyond digital industries, wider economic challenges are presented as skills must improve across the whole population – if they do not, there is a risk that all industries will have a lack of competitive potential and fall behind as apps and tech evolve.

(4) Action must be taken to reskill UK workers, continuously, otherwise new and emerging sectors will be unable to exploit digital skills.

(5) Demand for skills outstripping supply means that there is an issue with filling advertised vacancies – especially for high level jobs including developers – thus employers have serious recruitment holes in their teams.

Smashing the bottleneck

According to the study, the shortage of digital skills can be linked to one in five vacancies. Some 72 per cent of large firms and 49 per cent of SMEs are suffering from the tech bottleneck.

This is, in part, due to lack of awareness – many people don’t realise the career opportunities in the digital space. The report also highlighted the ongoing barriers to women, with low female representation on computer-related courses and the industry overall.

Of course, while some companies are eagerly trying to hire, lots are to blame for “neither effectively maximising the potential of new technologies nor the talents of their employees”.

This means missed opportunities like performance not reaching its peak. 
But the opportunities are there, demonstrated by a link between market competitiveness and uptake of tech in the workplace – using that combination will lead to an advantage over rivals.

Elsewhere, for the UK economy, value can be added by investing in digital skills – not just with new job roles, but by scaling the overall strategic approach to tech. This applies to SMEs and large firms alike.

The tech market accounts for six per cent of the UK economy and has an average GVA per person of £91,800, according to the study. And embracing the opportunities would result in a better ROI.

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The recommendations

The conclusion is that the government is accountable to provide “economic policy direction, national focus and leadership”, which will in turn help employers and educators tackle the skills gaps.

(1) Government leadership for education sector

It is said the government should set changes in place to embed digital skills in education and training. The aim is to create a range of tech specialists, digital-savvy business leaders and workers who can take on digital-centric jobs across the economy.

The report said “as a minimum, all children should leave school digitally literate” – with tech skill to be recognised alongside English and maths. Topics will include ecommerce, cyber security, mobile, apps, the Internet of Things and big data.

(2) Employers should take ownership of development

The government believes that employers should work together across networks and partnerships to raise skills and connect digital leaders in all industries. According to the report, companies should have a lead role to set minimum digital standards they believe individuals should have from education.

On the back of that, they should also keep staff training regular to stay on track with market changes, while maximising staff potential.

(3) The education sector must not sit still

Educators are advised to develop and create offerings based on the digital economy and to work within frameworks created by government departments. That means working with the stakeholders to support the demands of businesses, effectively building digital skills with “industry-relevance”.

Motivation will also be a key requirement of educators. They will need to inspire youngsters, especially females, to pursue digital careers through both apprenticeships and traditional higher education courses.

(4) Local governments must address the digital needs

Collaboration is key for this, as local partnerships must be forged to create a network of councils, colleges and businesses in order to understand the skills needs of the area.

The government must encourage the sharing of information and teamwork across the establishments. This will include initiatives to ensure more SMEs embrace online to achieve business growth while catering to customer needs. 

Image: Shutterstock