Software Cornwall featured in Government DIGITAL SKILLS for the UK ECONOMY Report

Software Cornwall has been cited in the govenments DIGITAL SKILLS for the UK ECONOMY report released in January 2016

Download the Full Report here DCMSDigitalSkillsReportJan16

This study examines the demand and supply of digital skills in the UK and reviews the risks for the UK if the digital skills needs of the population and businesses are not addressed. The findings of the study will inform the government’s digital strategy, as a key element of the Productivity Plan.

The study addressed four key questions:
1. What is the current demand for digital skills across the economy and what are the different types of digital skills requirements?
2. What barriers and market failures to the development of digital skills have emerged during the last decade?
3. What are the areas of shortage or mismatch (skill mismatch is defined as the gap between an individual’s job skills and the demands of the job market) of digital skills in the workforce?
4. How can the supply of digital skills meet the demand of the labour market?

Methodology
The methodology adopted first involved an extensive literature review using a range of sources to provide an overview of the current debate on the demand for digital skills in the UK; supply of digital skills; skills gaps and future digital skills requirements. It also considered the role of education and training in the skills pipeline, through which key digital skills relevant to society and the economy can be supplied. An assessment of existing digital skills definitions, and digital frameworks was undertaken to inform the study. This assessment resulted in the identification of three broad categories of digital skills requirements:
1. Basic digital literacy skills (empowering individuals): skills needed by every citizen to become ‘digitally literate’. These are the skills needed to carry out basic functions such as using digital applications to communicate and carry out basic internet searches. Cyber security sits under this category.
2. Digital skills for the general workforce (upskilling for the digital economy): all of category 1, plus skills needed in a workplace and generally linked to the use of applications developed by IT specialists. While the digital skills needed by the workforce are likely to differ across sectors, there will be some minimum requirements linked to processing information that will be applicable across all sectors.
3. Digital skills for ICT professions (digitally innovative and creative individuals, organisations and businesses): All of categories 1 and 2, plus skills needed to work across the diverse IT sector. They include digital skills linked to the development of new digital technologies, and new products and services. Such skills are needed if the UK is to compare favourably with other nations in relation to ICT investment and utilisation.

Consultations were carried out with a range of strategic stakeholders, employer-led partnerships and Government agencies. These included the Sector Skills Councils, Sector Bodies, National Skills academies, and policy level stakeholders such as the Skills Funding Agency, and representatives from the Government’s Digital Economy Unit (DEU). The interviews explored the types and levels of digital skills required by different sectors and occupational groups, to test the literature review findings, and the types of bottlenecks or barriers that contribute to digital skills gaps and shortages in the UK. They also explored education and training routes into digital roles, challenges or issues that influence the supply of skills in the UK, and, future skills training in digital skills and the issues that are likely to influence the development of digitally relevant courses for specific sectors.
Five case studies were developed, focusing on job types that exemplify a variety of occupations for which recent developments in ICT have resulted in a major change in the digital skills needed to carry out the specific roles linked to these occupations in the UK, or which have resulted in the emergence of a new occupation. These are in financial services, healthcare, the creative sector, Big Data, and logistics.

The study examined existing as well as future demands for digital skills in the UK economy. The routes used to meet the digital skills needed by employers in the UK were then reviewed, also considering the current barriers and market failures facing businesses in accessing digital skills. It drew on the literature review and interviews with stakeholders. The study then reviewed the risks and opportunities associated with actions (or lack thereof) linked to addressing digital skills needs in the UK, specifically in terms of market failures resulting from digital skills gaps, and the impact of these on the economy. It also reviewed the opportunity of improving digital skills with respect to the impact on the national economy.

Key Findings
The study sets out its conclusions under three thematic areas as follows:

Key Risks
1. A shortage in suitable digital skills for digital jobs persists in the UK labour market. This is a major risk to business growth, innovation and broader societal development.
2. By not effectively linking supply of digital skills to immediate, medium, and long-term demand, the relative ranking of the UK, in terms of investment in IT and utilisation compared to other major countries, is slipping. This may make the UK a less attractive investment location and place to do business.
3. While there are digital skills needs within sectors that are primarily ‘digital’ in their operations, there are wider challenges within the economy as a whole. Digital skills need to improve continuously across the whole UK population so that all sectors and organisations can maximise their competitive potential offered by the rapidly developing applications of digital technologies.
4. There is a need for action to be taken to re-skill the workforce continuously to ensure that new market segments that require digital skills can be exploited.
5. The widespread acquisition of digital skills offers particular growth opportunities for the UK economy but opportunities are often constrained by a lack of relevant digital skills within the labour force. As demand for digital skills outstrips supply, employers across a wider range of sectors are experiencing digital skill gaps within their workforce, and encountering difficulties in filling advertised vacancies (particularly in high level roles such as developers).

Opportunities
1. There is a clear link between market competitiveness and the uptake and application of digital technology in the workplace. Firms that have a developed ICT infrastructure and that take advantage of digital technologies tend to be the most competitive. Conversely, a lack of digital investment and infrastructure can place companies at a competitive disadvantage.
2. Significant value can be added to the UK economy and society through better investment in digital skills. This not only relates to job creation but also firm productivity and scaling-up markets for companies including SMEs.
3. The contribution of digital skills to the performance of the economy is substantial. The ‘tech sector’ alone represents 6% of the UK economy with an estimated GVA per person in the region of £91,800, well above the UK average. Given the large number of opportunities that are likely to be available, strong investment in digital skills would likely bring about a very good return on investment to the UK economy.

Bottlenecks, Barriers and Market Failures
1. The shortage in digital skills represents a key bottleneck for industry and is linked to one in five of all vacancies. Currently, 72% of large companies and 49% of SMEs are suffering tech skill gaps. There is a clear mismatch in the types of skill offered by the labour market and those demanded. In different ways and to different extents, this trend is likely to be holding back the growth of tech and non-tech companies alike (but further evidence on the types of problems emerging would support the argument).
2. There is an increasing range of activities and occupations where digital skills are needed but supply is not adequate.
3. There is a lack of awareness of career opportunities within the digital sector, sometimes reflecting skill and gender stereotypes around the types of roles that exist. Barriers exist especially for women who are under represented on higher education courses in computer related subjects, and within the industry as a whole.
4. Routes for the supply of digital skills are mainly via education and training routes delivered by education institutions. There are challenges in matching the speed of change in the education sector, for example in changing curricula and training, to the speed of demand, and the rapidly changing skill sets needs in the economy and society.
5. Assessing digital skills needs is challenging: While broad types of digital skills have been defined in terms of use, formal classification and recognition of skills and learning outcomes are less clear. This makes it difficult for employers to assess the digital skills of employees and applicants.
6. While there is a policy ambition for improving digital skill provision to ensure that digital skills development is integrated in curricula across all stages of education, the provision of digital skills at present is variable and inconsistent. While IT is extensively used in the primary and secondary education levels there still is much to be done to ensure that it is effectively used in teaching and learning (especially that teachers are digitally skilled), that gender stereotypes are overcome, and that learners are motivated to acquire digital skills through an awareness of the career potential they bring.
7. The digital skills of staff across the education and training system are uneven, and it is often not mandatory for staff to ‘upskill’ digitally. A learner’s digital education will depend on the digital competencies and skills of those teaching them, as well as awareness and adaptability of education institutions to changes in technology.
8. Many companies are neither effectively maximising the potential of new technologies nor the talents of their employees. As a result, opportunities are missed and performance is not maximised.
9. There seems to be insufficient provision, insufficient knowledge, or uneven availability, of appropriate business support services linked to the digital skills agenda.
10. Parent and teachers are not appropriately informed to support children with their decision-making around career and skills development. A significant minority of parents consider digital skills as irrelevant to career prospects. These attitudes need to change if appropriate guidance is to be offered to future participants in the labour market.

Recommendations
The recommendations focus on the role of central government in providing economic policy direction, national focus and leadership. They also point to the critical roles of employers, the education sector and local government and agencies in delivering solutions that address the digital skills gaps and shortages in the UK.

Recommendation 1: Government should provide leadership, coordination, and key resources in establishing the conditions for digital skills development
1. Ensure that digital skills are learned pervasively at all stages of education and training.
Government should set in place changes so that digital skills are embedded in education and training, enabling individuals to participate fully in the modern digital economy, whether as tech specialists, leaders of digitally-enabled businesses or workers in digitally-enabled jobs across the economy. As a minimum, all children should leave school digitally literate, with the skills needed in the workplace and to realise social outcomes. To this end, digital literacy should be seen as a core skill alongside English and Maths.
2. Focus education policy on skills of strategic importance to the nation.
Government should work with industry to understand which digital skills are of particular strategic importance to the nation and to identify emerging trends such as those identified in this report. Strategies should be put in place to address shortages in these areas of strategic importance, including cyber security, big data, the Internet of Things, apps, mobile and e-commerce.

Recommendation 2: Employers should take ownership of digital skills development
1. Collaborate at a national level.
Employers should collaborate, through networks and partnerships, to develop coherent national approaches to raising digital skills levels, bringing together digital leaders from all sectors. For example, industry should take a lead role in researching key productivity gaps with their relevant business/sector, so they can understand the advantages of upskilling and future proofing their workforce.
2. Lead on setting standards.
Employers should play a lead role in setting the minimum standards that individuals are expected are expected to acquire through education and training, including the digital skills
that are transferable across different roles, for example, cyber security, digital
marketing etc.
3. Build the skills of their own employees.
Employers should ensure existing staff have the training to keep their digital skills updated, and develop active recruitment and development strategies to maximise the digital skills of their workforce.
4. Foster lifelong learning.
Employers should help embed a culture which recognises and builds on the latent
talents of their employees, actively supporting their learning through a wide range of
learning approaches, to prepare them for future roles in the UK workforce. This
could involve a mixture of vocational on-the-job training and employer led short
courses with academic accreditation.

Recommendation 3: The education sector should develop and adapt their offers to meet the changing needs of the digital economy, working within the policy and funding frameworks established by the Department for Business, Innovation and Skills; Education; and Culture Media and Sport
1. Coordinate with stakeholders.
Education and training providers should ensure that they understand how the supply of educational courses, in terms of quality and quantity, can meet the demand for digital skills in the wider economy (e.g. by sector, geographically, etc.).
2. Build digital skills capacity with industry-relevance.
School, FE and HE digital curricula should be devised in partnership with industry, to provide people with the skills they will need in their roles across the workforce. Specialist provision, such as that to be provided by the planned National College for Digital Skills, should provide people with the advanced digital skills that will make a difference to the adoption of technology by companies across all sectors. In HE, computing-related degrees should equip people with the business and interpersonal skills they need to be effective in the workplace.
3. Motivate and inspire young people, particularly females, to consider digital careers.
More young people, particularly females, must be attracted to continue digital education and pursue careers. Schools should be better equipped to inform young people about the advantages of a career in digital, making it an attractive proposition compared to traditional vocations. They should also better promote the advantages of vocational routes such as degree apprenticeships in addition to traditional higher education routes.
4. Implement programmes to continually update the digital skills of their staff.
Teachers in schools should be supported to deliver the new computing curriculum and to develop their teaching approaches in line with developing educational technology. This includes helping current teachers retrain through an effective programme of continuous professional development (CPD) and ensuring new teachers are equipped with the right skills to teach the new curriculum.
5. Educators in FE and HE should be able to access CPD programmes to acquire and update their digital skills.
Recommendation 4: Local and regional government and agencies should address the digital skills needs of their local areas
1. Collaborate.
Local partnerships and networks (LEPS, Councils, FE colleges, Universities and employers) should work together to determine the skills needs for their local area, so that education and training provision is better matched to local demand. Government must encourage these partnerships to share best practice and knowledge of successful programmes and training schemes.
2. Inform.
Local agencies should ensure that relevant and focused information is made available about digital skills training and education provision across all sectors in their geographical areas. For example, the government must encourage more SMEs to get online and to develop and grow their businesses to changing customer needs.

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