Last week, Prime Minster Rishi Sunak opened London Tech Week by declaring Britain to be an “island of innovation“. This came hot on the heels of new figures from London & Partners showing that the capital has attracted more tech investment than any other global city over the last decade.
But despite being ahead of major competitors such as Paris, New York and even San Francisco, many businesses across this sector, and others in the capital, are grappling with acute digital skills shortages. If the UK is serious about maintaining its position as a global tech leader, we desperately need to close our skills gap in order to seize new opportunities in areas such as advanced coding and artificial intelligence.
A recent BusinessLDN survey of over 1,000 London business leaders and human resources managers, carried out by Survation, found that digital skills are expected to be those most in demand in the next two to five years, with more than half of respondents reporting a need for more staff possessing advanced skills and one third for people with basic competence.
It is important to define what we mean by digital skills, as technology is increasingly used across all parts of businesses. The category covers everything from being able to use rudimentary software, such as email, to having role-specific specialisms such as web design and digital marketing, right up to state-of-the-art coding and robotics.
In London, a key cross-cutting challenge that also needs to be addressed is digital poverty and inclusion. Data from the Office for National Statistics (ONS) shows that only 51 per cent of the poorest households in the capital had internet at home in March 2020, impacting their ability to access online training and career opportunities.
A further challenge for businesses is navigating the complex and fragmented skills training system, particularly for smaller firms with less time and resources for doing their homework about the plethora of schemes available.
Although many businesses are stepping up by delivering innovative approaches to tackling the skills gap, for example by delivering laptops to disadvantaged schools or by running digital skills boot camps to build up sector-specific expertise such as coding, it is clear that the private sector has a key emerging role to play in skilling and upskilling at a time when the public finances are stretched. With technology moving so quickly, businesses should work with educational providers, as well as the government, to ensure training keeps pace with changing demands.
That’s why BusinessLDN – in partnership with the Federation of Small Businesses London (FSB London), the London Chamber of Commerce & Industry (LCCI), and CBI London – has spent the last seven months consulting extensively with employers, educators and other stakeholders to create a blueprint to address digital and wider skills gaps across the capital’s labour market.
The report will be published in full in the coming months, but it is already clear from our discussions that some common themes are emerging. Three vital areas are the need for better communication about existing schemes, businesses working with providers to co-create course content, and greater devolution of the skills budget to London so it can be targeted where it is needed, such as on digital skills.
As well as being able to upskill homegrown talent, businesses also need access to talent from abroad. Between 2019 and 2022, the Global Visa Talent scheme accounted for 74 per cent of visas successfully granted to foreign tech workers, enabling routes for fintech, gaming, cyber security and AI employees to come to the UK for up to five years.
The rhetoric following the publication of recent net migration figures, particularly around “small boats” and international students, risks damaging the UK’s attractiveness to international talent. Immigration could turn into a political football in the run-up to the next general election, so the value of overseas workers to high-growth sectors such as tech must be underlined.
As more and more of our economy embraces digital technology, businesses have a pivotal role to play in addressing the skills gap together with the government. Unless we fix the digital skills divide, the UK will never fulfil its true potential as an island of innovation.
Muniya Barua is Deputy Chief Executive at BusinessLDN. Follow Muniya on Twitter.
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