Is the digital skills gap now at a critical point?

A new study by the STEM Foundation reveals that the digital skills gap has widened to a critical point. 

A new study by the STEM Foundation reveals that the digital skills gap has widened to a critical point.

According to the report, the huge reliance on ‘everything digital’ has placed massive demands on the job recruitment market, with companies fighting over getting the best digital talent. Despite this, some jobs such as those in data analytics or autonomy remain unfilled. Lack of education and skills in these key technologies is now critical and holding back companies wanting to grow.

With fast growth technology entering the market at an unprecedented pace, the report predicts a seismic shift in the demand for technology education and skills, which is naturally changing the landscape of STEM (science, technology, engineering and mathematics) skills.

Currently, educational provision is not meeting employer needs. In over a hundred companies surveyed, over two thirds say that not having employees skilled in data analytics could impact the business by over 70 per cent. Over half of all business respondents surveyed see the lack of programming skills in machine learning, AI and deep learning as debilitating to business performance and competitiveness.

Business impact in these cases means sales revenue, market growth and profitability; the staples that keep business alive.

The Industrial Internet of Things has been cited as the fourth industrial revolution (Industry 4.0). STEM Foundation’s study identified over half of all respondents across ten business sectors see this as potentially disrupting business models, processes and supply chains.

Industry 4.0 boasts productivity increases and cost reductions to expensive manufacturing processes. The major stumbling block for companies wanting to unleash the power of the Industrial Internet is a lack of tech skills.

Industry 4.0 requires data analytics, programming proficiency in R and Python, complex communications, data visualisation, problem-solving and large frame pattern recognition, however there is a significant gap in skills in all of these areas. The role of the data scientist, central to business analytics is growing fast.

In the first half of 2016, the role of data scientist in companies grew by 32 per cent, and is predicted to grow by around 50 per cent by the end of 2017, according to Warwick Analytics. However, the supply of people with these skills doesn’t meet demand.

The report, Shaping the Future of STEM Skills, is supported by the European Union’s Social Fund (ESF) in partnership with Greater Cambridge and Greater Peterborough (GCGP) Enterprise Partnership and the Association of Colleges in the Eastern Region (ACER).

The study has discovered an on-going disconnect between what STEM courses are being taught by providers, and the needs of employers as determined by the pace of technology.

And it is not just the pace of technology but the confluence of technologies that are forcing the need for a new set of multi-disciplinary technical skills. Although many sector-specific STEM programmes (such as apprenticeships) have been created, they are often too specific, and through the volatility of a sector’s economics, have the potential of a shorter shelf-life and currency.

The study advocates a need to assess the ‘intensity of demand’ for skills in new and emerging technologies; examining both market readiness and application base, so enabling STEM programmes to be repackages to offer key technology fundamentals (such as data analytics, sensors, connectivity and visualisation) thereby enabling students’ greater employment flexibility across a variety of different business and industry sectors.

The study calls for a new type of Conversion Course that enables individuals to inter-operate in adjacent disciplines and sectors but still use their existing specialist technical skills and competencies to underpin their newly acquired knowledge. These are not simply ‘retraining’ courses, but technical programmes that build in the transferable skills that have been much cited by business leaders, and include: innovation, entrepreneurship, creativity, logic, visualisation, problem-solving and storytelling.

See also: Inspiring future of STEM students today could cut the UK skills deficit – Mary Hunter, managing director of digital business services provider Columbus UK, discusses how can businesses team up with the education system to help develop children on the path towards a STEM career and grow the UK talent pool.

Are British businesses investing enough in digital skills?

Research reveals investment in digital upskilling remains low at only £109 per employee among medium and large businesses.

Government figures reveal a mismatch in the types of skill offered by the labour market and those demanded: 72 per cent of large companies and 49 per cent of SMEs are falling in the digital skill gap.

As demand for digital skills outstrips supply, employers beyond the tech sector are experiencing digital skill gaps within their workforce, particularly for roles like developers. Today, Barclays released figures revealing a “forgotten middle” in a spectrum of digital skills. “There are a significant number of people who are just about getting by online but not developing the skills and confidence to really thrive in this digital age and this is putting British businesses at a disadvantage,” Ashok Vaswani, CEO of Barclays UK said.

While almost half (47 per cent) of all businesses believe better digital skills would lead to a more productive workforce, the research found that medium and large businesses spent an average of £36,920 on digital skills training in 2015, which suggests that investment in digital upskilling averaged to £109 per employee.

The survey of UK employees and employers found that businesses have struggled to digitally upskill the workforce, as a third (34 per cent) of employers find it difficult to implement the right training to address the current lack of digital skills.

>See: Five easy ways to embrace digital technology to grow your business

“It is essential that the UK fosters an environment for individuals where they have the opportunity to develop their digital skills and prosper in the knowledge economy, in turn helping businesses small and large grow and deliver better returns and helping the UK to lead in the global marketplace,” Vaswani added.

However, in spite of this mounting concern, businesses are not making the necessary investments in digital training, planning on increasing investment in digital skills by only 19 per cent over the next five years.

Based on this research, Barclays will be releasing a detailed report mapping the UK’s current level of digital skills against other markets in the next few months.

Praseeda Nair

Kellen Rempel

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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