Summary
Technology Insights 2011
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The Sector Skills Council for Business and Information Technology, including Software, Internet & Web, Computer Games, IT Services, Telecommunications and Business Change. Creating the skills for the digital economy
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e-skills UK Board List
IT & Telecoms Industry BoardDavid Thomlinson Country Managing Director, UK & Ireland Accenture
Sally Davis Chief Executive BT Wholesale
John Pluthero Executive Chairman, UK Cable & Wireless Worldwide
Phil Smith VP and Chief Executive, UK & Ireland Cisco
Craig Wilson Managing Director and VP, UK & Ireland HP Enterprise Services
Stephen Leonard Chief Executive UK, Ireland IBM
Andy Green (Chair) CEO Logica
Gordon Frazer MD, UK and VP, MS International Microsoft
David Callaghan Senior Vice President Oracle
Gayna Hart MD Quicksilva
A. S. Lakshminarayanan Vice President and Head – Europe Tata Consultancy Services
Nick Read CEO of Asia-Pacific & Middle East Regions Vodafone
CIO Board
Paul Coby (Chair) CIO and Head of BA Services British Airways
Philip Langsdale CIO BAA
Tiffany Hall CIO BBC
Lesley Hume CIO Cabinet Office
Simon Post Chief Technology Officer Carphone Warehouse
Peter Pedersen Chief Technology Officer Figleaves
Ailsa Beaton Director of Information Metropolitan Police Service
David Lister CIO National Grid
Catherine Doran Director Corporate Development Network Rail
Rob Fraser IT Director Sainsbury’s
Richard Thwaite CIO UBS
Ben Wishart Change and Information Director Whitbread
Acknowledgements
e-skills UK would like to thank the following for their contributions:
• 1,800 employers across the UK who provided insights into skills needs, training and future trends,
• 700 IT & Telecoms professionals for details of their employment, skills, education and training provision / needs, • Experian for their work on employment forecasting,
• Adroit Economics for their analysis of the impact of ICT on productivity.
1.0 Introduction 1 2.0 The importance of IT & Telecoms to the UK economy 3
3.0 Technology’s strategic importance in policy 6
4.0 IT & Telecoms: underpinning UK employment 8
5.0 The changing environment – horizon scan 9
6.0 Current and future recruitment into IT & Telecoms 11
7.0 Current and future workforce development 13
8.0 IT related education and qualifications 14
9.0 The wider population’s use of IT 16
10.0 Regional variations 17
11.0 Current and future skills priorities 19
12.0 Global ambition and e-skills UK’s strategic objectives 20 Annex A: IT & Telecoms professional occupations 21 Annex B: IT & Telecoms industrial classifications 23
Contents
‘This Government
believes
technology-based innovation will
be one of the key
drivers of the private
sector led economic
growth that Britain so
urgently needs. The
dynamics of the global
economy have been
changing for some
time, with technology
and innovation at
the heart of new
global economic
opportunities.’
The Prime Minister –
David Cameron
1.0 Introduction
1
1 HM Government, Blueprint for Technology, November 2010
2 Sector Skills Councils are employer – led organisations that cover specific economic sectors within the UK; they aim to improve productivity and skills, reduce skills gaps and shortages and improve the learning supply within their given sector. SSCs are licensed by the Government and through the UK Commission for Employment and Skills (UKCES)
The Coalition Government’s ‘Blueprint for Technology’1 identifies technology enabled
innovation as the key to securing private sector led economic growth for the UK. In the context of the current economic climate and focus on deficit reduction, high growth, high tech and innovative businesses are critical – they drive economic growth, productivity, global competitiveness and the creation of new jobs. By getting behind all high growth, innovative and technology companies, the Government believes the UK will be on the path to a new economic dynamism.
Describing itself as a ‘technology-friendly Government’, it has committed to creating a framework in which high tech and innovative companies can flourish. In doing so, it has emphasised the importance of ensuring that businesses have the right skills they need to grow. The changing shape of the economy means that future growth will depend more and more on the technology sector, and so the technology skills needed for businesses to innovate will become increasingly important.
e-skills UK is the Sector Skills Council2 for Business and Information Technology; an
employer – led organisation rated as ‘outstanding’ in the re-licensing of the Sector Skills Councils. e-skills UK’s objective is to work with employers, educators and government to ensure the UK has the technology skills needed for a digital economy.
Building on previous research, e-skills UK has undertaken research into the UK’s IT & Telecoms workforce, technology trends, opportunities and challenges in order to deliver authoritative labour market intelligence which enables effective influence on policy, strategy and solution development. The resultant suite of publications, ‘Technology Insights 2011’, for which this publication acts as a summary, sets out the current reality, forecasts the future based on the best available intelligence, and assesses the implications for the IT & Telecoms sector.
The reports for the UK, England, Scotland, Wales and Northern Ireland build on existing knowledge with primary research amongst more than 1,800 employers; an analysis of technology–related trends and their implications for the future; updated employment forecasting (in partnership with Experian); and a detailed analysis of the workforce profile and current skills provision.
These reports will inform e-skills UK, government, education providers, employers and the IT & Telecoms sector of the implications of emerging trends and the changing environment.
2 On the basis of this research, e-skills UK will continue to work with employers and partners
to refine and implement the Strategic Plans for 2009-2014 for each of England, Scotland and Wales and Northern Ireland (2010-2014), providing:
• The latest expert input into e-skills UK’s strategy and sector solutions development, • Accessible research and intelligence for employers, educators and others needing an
win-depth understanding of employer skills needs,
• Influence of government policy development on behalf of the sector.
The delivery of these strategic plans will ensure the UK’s nations are world class in technology skills – equipped to play their full role in the digital economy over the coming decade, and able to derive maximum benefit from the power of technology to transform business competitiveness, productivity and social inclusion.
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010
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2.0 The importance of IT &
Telecoms to the UK economy
‘...promoting digital
inclusion is essential
for a dynamic modern
economy and can help
to make government
more efficient and
effective.’
The Prime Minister –
David Cameron
In addition to being a
significant contributor
to UK GVA, IT &
Telecoms underpins all
other sectors
The UK is highly dependent on its IT & Telecoms workforce – it underpins the economy and is integral to information, business and consumer services, health and leisure and modern day social networking. Across all industries, it is the combination of highly skilled IT & Telecoms professionals, technology-savvy business leaders and competent IT users that enable an organisation’s effective participation in the digital economy.
The following diagram shows the relationship between the proportion of the UK’s IT & Telecoms professionals employed in each sector, along with their respective GVA contributions, highlighting the importance of IT & Telecoms to every sector.
Figure 1: The importance of IT & Telecoms to every sector
Source: e-skills UK analysis of Office for National Statistics data IT & Telecoms and competitiveness
In terms of the highest levels of percentage change, output in IT services shows the most sustained and substantial percentage change out of all UK sectors, not only historically from 2002 but also forecast to 2017.
Whilst on a global perspective, compared to many other nations, the UK rates highly with respect to IT investment and utilisation, the UK’s global ranking has generally declined in recent years and consistently remains below the level assigned to other leading nations, notably the US (and the Nordic states in particular i.e. Sweden, Denmark and Norway). Part of the US advantage can be explained by a more effective application of IT and the productivity improvements it delivers.
IT & Telecoms
% of IT & Telecoms professional workforce: 40% UK GVA Contribution: 9% 16% 3% 3% 3% 2% 15% 7% 2% 6% 3% 3% 5% 9% 18% 4% 7% 21% 2% 0.5% 23%
Media & Culture Arts, Entertainment
& Recreation Public Administration, Education & Health
Real Estate, Renting & Business Activities
Transport & Storage, Information & Communication
Accommodation & Food Service Activities
Wholesale, Retail & Trade
Construction Electricity, Gas & Water Supply Manufacturing
Key Outer Circle:
Contribution of Sector to UK GVA Inner Circle:
% of the UK’s IT & Telecoms professional workforce employed in the sector Centre:
IT & Telecoms industry employment and GVA contribution
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010 4
Optimisation of ICT
could generate an
additional £50 billion
GVA across the UK
economy
The IT & Telecoms
industry GVA
contribution amounts
to 9% (£81 billion) of
the UK’s economy
IT & Telecoms productivity
Today, the IT & Telecoms industry contributes 9% (£81 billion) of the UK’s total Gross Value Added (GVA). In addition, the previously un-assessed economic contribution of the Internet is now said to be worth an estimated £100 billion to the UK economy.
Notwithstanding the direct economic contribution of the sector, access to technologies such as the internet also create social benefits including access to employment opportunities for workless adults, improved standards of living for older people and increased democratic engagement and access to information’.
Studies to understand the better productivity gains in the United States (US) compared to the UK and the comparative differences across Europe found that US multinational firms are on average 8.5% more productive than UK domestic owned firms, and that almost all of this difference is due to the higher productivity impact of their use of ICT. Further research by the Office for National Statistics (ONS) also concluded that over 80% of this productivity advantage is explained by better use of IT.
More recently, the LSE report ‘The economic impact of ICT’, found increased investment in ICT capital to have ‘played a major role’ in the doubling of US productivity growth rates; commonly referred to as the ‘productivity miracle’.
ICT adoption and exploitation
Further research adding to that originally carried out in 2008 by e-skills UK and Adroit Economics indicates that there is still considerable opportunity for more firms to adopt and exploit ICT (particularly advanced ICT), resulting in further ICT-driven GVA uplift. There are still productivity gains to be achieved, but there are even greater gains to be achieved through the impact of ICT on wider enterprise, innovation and the development of new products, services and markets. Use of faster broadband and broadband related services, especially those that enable trading on-line, are thought to offer many firms significant opportunity for growth.
The updated model still takes account of ICT driven productivity gains, but also takes account of these enterprise and innovation gains – to provide an up to date view of the geography of ICT productivity impacts – at the level of the UK’s nations and English and city regions.
The revised model estimates future potential ICT GVA uplift, at the level of the UK to be £50 billion (over the next 5-7 years). This is a significant figure and the growth it represents is of particular importance at this time, when all eyes are focussed on achieving private sector business growth in the wake of the public sector spending cuts announced in the spending review.
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Excluding London,
firms in the UK’s
city-regions could generate
an additional £10
billion GVA through
optimisation of ICT
The total potential
economic benefit from
getting everyone in the
UK online is in excess
of £22 billion
PricewaterhouseCoopers
5
ICT impacts across the UK
The ICT GVA uplift varies by nation / region, again depending on the size of each region’s economy and on industrial structure: the uplift is greatest in London (£15 bn) and the South East (£7.8 bn).
The model has been applied to the city-region economies. This is important as not only do the city-regions represent the core of the UK’s economy but with the demise of the RDAs they are likely to become focal points for sub national economic policy. Overall, the city-region economies together generated £194 billion GVA in 2008 and the ICT productivity uplifts are estimated to be £10.2 billion in total over the next 5 to 7 years (4.86%). ICT uplifts are estimated to be the greatest in Manchester (£2.4 bn), then Leeds (£2.0 bn) and Glasgow (£1.6 bn).
ICT impacts and firm size
Small firms, especially those employing 10 or less are least likely to have fully adopted and optimised advanced ICT. Recent surveys such as the ‘ICT Benchmarking’, 2008 (SEEDA) show that only 25-30% engage in trading online. The key opportunity for the UK economy therefore must be for a higher proportion of small firms to engage in trading online and other high impact ICT activities.
The benefits of tackling digital exclusion
ICT has a wider range of impacts, beyond just economic productivity gains. The benefits of ICT use are both wide ranging and substantial but only for those who use ICT. The 9.2 million people in the UK who are digitally excluded are missing out and this has significant adverse impacts for them, for the economy and for the cost of public services. The recent publication ‘The Economic Case for Digital Inclusion’ 2009 (PricewaterhouseCoopers) quantified the potential economic benefits that could result from getting everyone in the UK online to be in excess of £22 billion.
The importance of broadband
Much of past ICT impacts and an increasing proportion of future ICT impacts will be reliant on / driven by the availability and take up of consumer broadband. The UK is in the process of deploying superfast broadband which will further drive competitiveness, innovation and enterprise; and much of the £50 billion ICT GVA uplift forecast, one way or another, will need competitive super fast broadband.
The need for continued ICT policy
There is strong evidence that many firms, individuals and parts of the country will continue to face difficulties exploiting ICT. Managers and leaders in every sector need to have the ability to fully exploit the strategic potential of technology and all individuals need the IT user skills for full participation in employment and society. A continuing package of policy support is needed to ensure these requirements are achieved and the ensuing benefits realised both for the economy and the digitally excluded. Four strands of policy remain important; ICT business support – especially to small firms, improved ICT skills – both professional and user, getting the digitally excluded online and ensuring UK access to superfast broadband.
3 Those sectors most likely to benefit from ICT driven enterprise and innovation GVA uplifts are the financial, professional and business service sectors; coupled with the advance manufacturing and technical service sectors – these are particularly strong in London and the South East
3.0 Technology’s strategic
importance in policy
6 Current skills and employment policy is driven by the UK Government’s focus on
tackling the deficit, reducing public expenditure, rebalancing the economy, and creating sustainable, private sector led economic growth.
Skills policy is devolved from UK government to administrations in Scotland, Wales and Northern Ireland. Many challenges are common across the four nations of the UK but there are differences in policy direction and approach embodied in each national skills strategy; particularly in response to local economic conditions and labour market structure. Each national skills strategy sets out the ambitions for education and learning in their respective nation:
• In Scotland through ‘Skills for Scotland: Accelerating the Recovery and Increasing Sustainable Economic Growth’4,
• In Wales through ‘Economic Renewal: a new direction’5 and ‘Skills That Work for
Wales’6,
• In Northern Ireland through the draft ‘Success through Skills 2’ skills strategy7,
• In England through ‘Skills for Sustainable Growth’8.
Other recent policy developments of relevance to the sector include:
• ‘Skills for Jobs: Today and Tomorrow: The National Skills Audit for England 2010’ which:
- Identifies technology as one of seven key drivers of change that will affect the
demand for skills in the future across all sectors,
- Highlights the Computing industry as currently having the combination of the
greatest economic significance and greatest skill deficiency,
- Reports Computing and Post & Telecoms will continue to remain of the highest
order of economic significance in the future,
- Shows specific and significant management and professional skills shortages
in the computing and software sectors as high priority skills needs for immediate action.
• The Coalition Government’s ‘Blueprint for Technology’ which sets out its ambition for the UK to become most attractive place in the world to start and invest in innovative technology companies, committing to creating a framework in which high tech and innovative companies can flourish,
• National reviews of vocational education in England (Wolf Review) and Scotland (Willie Roe Review of Vocational Education and Training),
• Forthcoming national responses to the ‘Independent Review of Higher Education Funding & Student Finance’ (Browne Review). Whilst the Browne review was for England only, each nation will be considering the implications for the future funding of Higher Education,
• The focus on STEM, including technology skills through ‘Success through STEM’ in Northern Ireland, ‘Delivering a Digital Wales’ and the Royal Society review ‘Computing
4 Scottish Government, Skills for Scotland: Accelerating the Recovery and Increasing Sustainable Economic Growth, October 2010
5 Welsh Assembly Government, Economic Renewal: a new direction, July 2010 6 Welsh Assembly Government, Skills That Work for Wales, 2007
7 DELNI, Success through Skills 2: The Skills Strategy for Northern Ireland – Consultation document, May 2010 8 BIS, A Strategy for Sustainable Growth (Consultation), November 2010
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010
Computing will
continue to remain of
the highest order of
economic significance
The National Skills
Audit for England
2010, UKCES
7
in schools and its importance and implications for the economic and scientific wellbeing of the UK’,
• Strategies to address the ‘digitally excluded’ such as ‘Delivering Digital Inclusion’ in Wales and Race Online across the UK.
e-skills UK strategic response
e-skills UK has developed Strategic Plans for England, Scotland, Wales (2009-2014) and Northern Ireland (2010-2014).
Based on research input from over 4,000 employers, their purpose is to set out a coherent suite of skills strategies that enable the digital economy to derive maximum benefit from the power of technology; transforming competitiveness and productivity through the creation of appropriate technology related skills.
e-skills UK is undertaking work to support three strategic objectives:
1. Inspire future talent: Motivate talented students to pursue IT-related careers, and better prepare all young people for work in a technology-enabled world.
2. Support IT professionals: Develop the IT professional skills pool as the best in the world for deriving business benefit from technology.
3. Campaign for the IT Nation: Promote the compelling benefits of increased IT capability to organisations and individuals in every sector.
We deliver on these strategic objectives through a suite of sector solutions, underpinned by four core activities.
Figure 2: e-skills UK’s strategic objectives
Actions detailing how e-skills UK will deliver these objectives are set out in the plans with specific activities tailored to the context and needs of each nation. The strategic plans for each nation and the associated actions will be further informed by the research presented in this suite of, ‘Technology Insights 2011’ publications.
Strategic objective 3:
Employer engagement
Generate exceptional employer engagement which raises demand and investment in skills
Research
Deliver authoritative labour market intelligence which enables effective influence on policy, strategy & solution development
Standards and Qualifications
Implement a coherent sector qualifications & learning strategy which ensures skills supply is driven by the needs of employers and learners
Partnerships
Establish strategically-aligned partnerships which capitalise on the power of collective action to deliver on this strategy
Strategic objective 1:
IT professionals
Develop the IT professional skill pool as the best in the world
for deriving business benefit from technology
The IT Nation
Promote the compelling benefits of increased IT capability to organisations and
individuals in every sector
Employers & employer intermediaries – educators – government and agencies
Future talent
Motivate talented students to pursue IT-related careers, and better prepare all young
people for work in a technology-enabled world
Sector solutions
Cor
e activities
Strategic objective 2:
One in twenty UK
workers are employed
in the IT & Telecoms
workforce
8 There are nearly 144,000 workplaces in the UK’s IT & Telecoms industry – 87% of
which are IT and 13% Telecoms. 92% of these are services orientated, and a significant proportion (44%) are located in London and the South East. Micro firms make up 93% of the number of IT & Telecoms workplaces in Great Britain but employ just 28% of the sector workforce. By contrast, companies with 200 or more employees make up less than 1% of the number of workplaces but employ 34% of the workforce.
One in twenty people employed in the UK work in the IT & Telecoms workforce (1.5 million people). This comprises around 863,000 in the IT & Telecoms industry itself and a further 674,000 working as IT or Telecoms professionals in other industries.
The following diagram segments IT & Telecoms professionals and the IT & Telecoms industry. In addition it shows which of their respective sub groups combine to form the IT & Telecoms workforce.
Figure 3: IT & Telecoms workforce – high level segmentation (UK)
Source: e-skills UK analysis of the ONS Labour Force Survey, April-June 2010 Note: Figures may not add up due to rounding
39% of IT & Telecoms professionals are now employed as ICT Managers or IT Strategy & Planning Professionals, and these are the occupations that have grown most rapidly in the last nine years (in the case of ICT Managers, growth has been 45% over the period). A further 29% are employed as Software Professionals. There have been substantial decreases in employment in other areas such as IT User Support, Database and Engineering roles, as globalisation increasingly impacts on the employment mix. Globalisation is also affecting the age profile of IT & Telecoms professionals. The proportion aged 16 – 29 has dropped from 33% in 2001 to 19% in 2010 as the sector favours experienced workers from other sectors over young recruits from the education system. Gender remains a significant and worsening issue and, in 2010, just 18% of IT & Telecoms professionals were female.
Just 18% of IT &
Telecoms professionals
are female
4.0 IT & Telecoms: underpinning
UK employment
Population (A) 61,349,000 Workforce (B)28,933,000 Total IT & T industry (C+D) 863,000 IT & T professionals in the IT & T industry(C) 455,000 IT & T professionals in other sectors (E) 674,000 All other occupations in the IT & T industry (D) 408,000
Total IT & T workforce (C+D+E) 1,537,000 Total IT & T professionals
(C+E) 1,129,000
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5.0 The changing environment
– horizon scan
9
Research undertaken with employers to identify the degree and timing of the impact of a number of trends categorised the results into three groups, namely;
• Immediate issues: those that many employers say will have a major impact
on business, and typically in the next 1 to 3 years. The immediate key issues for employers appear to be security and data protection, but innovation is also considered important, followed by cloud computing, convergence of communications and IT and the real world web.
• Developing issues: those that will have a major impact on only a selection of
businesses, or alternatively may have a widespread impact, but in the medium term. ‘Developing’ does not necessarily mean new – some of these issues have been around for some time, for example green IT and the transformation of businesses using IT, but it can take time for the impact to be felt. Other issues are new, for example the possibility of reshaping the data centre has emerged in the last 5 years, but only those businesses with intensive computing needs will be directly affected.
• Horizon issues: wider, ongoing issues, impacting at different times, on different
businesses, but not affecting a majority of businesses all at once. For example, some large businesses are thinking about backshoring, but it is not regarded as an immediate issue and smaller employers do not appear to be very concerned by it. In contrast, industrialisation of IT delivery will only really impact on small employers in any great number, while the pool of talent and gender balance appears more of an issue for IT & Telecoms businesses than other employers of IT & Telecoms professionals.
Figure 4: Trends shaping IT & Telecoms skills changes
Source: Technology Insights 2011: Trends and UK Skills Implications, e-skills UK / Experian
Immediate Issues
Developing Issues
Horizon Issues
Short-term (1-3 yrs) Mid-term (4-6 yrs)
industrialisation of delivery
Backshoring
Pool of talent / gender balance
Green IT
Transformation through IT Digital Native
Borderless Business Information and AnalyticsConsumerisation of IT Reshaping the Data
centre
Real World Web
Cloud computing
Innovation Communications
convergence
Security and Data protection
Major Impact
10 Many of the future trends that affect IT & Telecoms utilise similar technologies and / or
require similar skills and knowledge from IT & Telecoms professionals. Five cross cutting skills themes emerged across the trends.
Security skills
Security and data protection will have one of the clearest and most immediate impacts for the skills of IT & Telecoms professionals. But employers frequently mention security related skills issues across many of the key trends and the ability of IT & Telecoms professionals to deal with these security issues will be one of their priority skills areas.
Business skills
Increasingly IT & Telecoms professionals must have core business skills. Creative, technical and entrepreneurial skills alone are not enough – as professionals need to manage lifecycles of product development, and solve real business issues. Technical skills need to be complemented by a balanced understanding of businesses’ broader objectives.
Technology specific skills
Central to nearly all future trends is specific and high level technical knowledge. For example, the systems that underpin the convergence of communications & IT, networks and devices that support voice, video and data communications and mobile devices. Other trends have other fundamental challenges about architecture and infrastructure, for example IT & Telecoms professionals need a deep understanding of a wide variety of technical issues if cloud computing is to become a reality, and without high level technical expertise and knowledge it is also hard to understand how data security issues can be addressed successfully.
Interpersonal skills
As information technology and services become more embedded in everyday life, both business and social, IT & Telecoms professionals need to be able to deal with and better understand customer challenges and consumer choices.
Analytical and research skills
Analytics is a vital component of connecting information and technology to business problems. This will require organisations to have strong data architecture in place and then to develop new analytical skills to bring business meaning to operational data.
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010
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Employment in the IT
industry is predicted
to grow at nearly five
times the UK average
6.0 Current and future recruitment
into IT & Telecoms
11
Demand for IT & Telecoms professionals
Despite weaknesses in the UK economy, demand for IT & Telecoms professionals in the UK rose in each of the four quarters up to / including Q2.10 at which point there were estimated to be around 94,000 advertised positions in the UK, 75,000 of which were for permanent professionals and 18,000 for contractors.
Figure 5: Change in demand for IT & Telecoms professionals 2001-2010
Source: e-skills UK analysis of data from Salary Services Ltd
The majority of IT & Telecoms positions advertised were in the field of Systems Design or Systems Development and within these two broad groups the top five roles recruited for were: Systems Developers, Senior Systems Developers, Project Managers, Business Analysts and Test Analysts.
The technical skills most often requested from applicants for IT & Telecoms positions were: SQL, C, C#, .NET, SQL SVR, ASP, Java, HTML, JavaScript and Oracle, all of which appear in more than one in twenty adverts for IT & Telecoms professionals each quarter. Business skills, higher level technical skills and sector knowledge / experience are often thought lacking amongst applicants for IT & Telecoms positions and 3% of IT & Telecoms recruiters surveyed in the second quarter of 2010 reported difficulty filling IT & Telecoms positions due to a lack of candidates with the required skills, qualifications or experience (i.e. skills shortages).
Skills shortages were most often reported by firms seeking to recruit Software Engineers, IT & Telecoms Management, Systems Developers or Internet Professionals though a larger number of Networking vacancies were actually proving difficult to fill due to related skills shortages.
The initial effect of skills shortages are delays in recruitment, but the longer term effects are much greater and nine out of ten recruiters experiencing shortages stated that this had caused them delays in developing new products or services.
IT & Telecoms workforce growth dynamics
Work during 2010 with the forecasting experts Experian concluded that the growth of the IT & Telecoms sector is predicted to continue strongly to 2019. While employment in the overall UK workforce is forecast to increase at 0.45% per annum for the coming decade, the IT industry will grow at 2.19% per annum, which is nearly five times faster than the average employment growth of the UK. In contrast, the Telecoms industry which has grown more slowly than the UK average for the last two decades is likely to show a decline in employment (-0.14% per annum) over the ten year period to 2019.
IT & Telecoms related
skills shortages were
reported by 3% of
recruiters responding
to the 2010 e-skills UK
employer survey
0 100000 200000 300000 400000 Q2.02 Q2.01 Q2.03 Q2.04 Q2.05 Q2.06 Q2.07 Q2.08 Q2.09 Q2.10Contract ICT vacancies Permanent ICT vacancies
12 Growth in IT & Telecoms professional occupations is anticipated to be substantial however
and at 1.42% per year, is forecast to grow at more than three times the UK average between 2010-2019. This growth is expected to manifest itself mainly amongst the more senior level roles i.e. ICT Managers, IT Strategy & Planning and Software Professional roles whilst the number of people employed in lower skilled roles will continue to contract or remain static.
Recruitment needs
The figure below shows there are 125,800 gross job opportunities expected each year to 2014 across all IT & Telecoms occupations. Replacement accounts for the vast majority of these opportunities with 112,400 jobs (or 89%) expected to become available due to one of the replacement factors.
Figure 6: Anticipated annual gross job opportunities for IT & Telecoms professionals to 2014
Source: Experian / e-skills UK analysis of gross job opportunities, 2010
‘Replacement demand’ – replacing those who leave the sector due to retirement or other reasons has been modelled to 2014 with detailed information about predicted replacement rates by occupation. Of the overall recruitment into IT & Telecoms professional jobs (to cover both growth and replacement), 63% is expected to be into managerial and senior professional positions (ICT Managers, IT Strategy & Planning Professionals and Software Professionals); 18% into associate professional and technician level positions (such as IT Operations Technicians and IT User Support); and 19% into skilled trades (Telecoms and Computer Engineers) and administrative roles (Database Assistants & Clerks).
On top of ‘churn’ within IT & Telecoms occupations, there is a need for an average of 110,400 new entrants a year into IT & Telecoms professional job roles. Based on current data, the makeup of this intake is expected to be as follows:
• 51,200 people a year coming from occupations other than IT or Telecoms (i.e.
experienced workers who can be re-trained as IT & Telecoms professionals),
• 18,400 people a year coming from education (predominantly graduate level and
higher),
• 40,800 people a year coming from other sources (e.g. re-entering the workforce
after a career break, early retirement or unemployment).
Over 550,000 new
entrants over the next
five years are required
to fill IT & Telecoms
professional job roles
in the UK
Unemployment 26,000 Retire 6,100 Non IT&T Job Switcher 46,200 IT&T Job Switcher 15,400 Look after family 4,800 Become a student 4,400 Other inactive 9,600Job switcher from IT & Telecoms occupations 15,400 Entrants to IT & Telecoms occupations 110,400
Job switchers from Non IT & Telecoms occupations 51,200 Unemployment 19,900 Education18,400 Other Inactive 21,000 NET change in employment Occupation 13,400 Gross Job Opportunities 125,800 Replacement Jobs 112,400
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010
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Just over one in
ten employers
of IT & Telecoms
professionals report
gaps in the skills of
these workers – most
likely in the area of
Technical IT skills
7.0 Current and future
workforce development
IT & Telecoms
professionals are
generally found to be
higher qualified than
other UK workers
In general, IT & Telecoms professionals are more highly educated than other workers and more than one half of them are thought to hold an undergraduate / higher level degree. IT & Telecoms related skills gaps and potential opportunities for business benefit via associated up skilling activities are recognised by employers and employees alike, particularly in the areas of; sector knowledge / experience, technical IT skills and business / management development. Although the majority of employers do rate the skills of their IT & Telecoms professionals as generally being equal to those needed of them, nonetheless, just over one in ten UK firms (12%) responding to the e-skills UK 2010 employer survey did state that they were experiencing IT & Telecoms related skills gaps (i.e. gaps in the skills of their IT & Telecoms professionals).
Figure 7: Incidence of IT & Telecoms skills gaps
Source: e-skills UK employer survey, 2010
To address skills gaps and ensure a continued balance between skills held / needed by IT & Telecoms professionals it has been estimated that around 4.4 million development units (one unit equates to a movement of one level in one sub-skills group of the e-skills procom framework) need to be delivered each year- primarily at Lead / Principal level and in the specific areas of: Service Management / Delivery, Personal Skills Development and Programme / Project / Supplier Management.
Mismatches in the skills of IT & Telecoms professionals are often to an extent due to unavoidable factors such as taking on new staff and / or the introduction of new systems / processes or equipment. As such, a substantial volume of education / training activity will always be needed considering the number of IT & Telecoms professionals working in the UK though, on average, at around 593,000 IT & Telecoms professionals each year, the numbers receiving education / training initially appear well below the up skilling requirement identified by employers.
Perhaps in view of the scale of this continued development activity, most employers and employees are of the view that education / training will be provided to address skills gaps identified and to realise the potential benefits of up skilling within the space of one year.
46% 22% 30% 30% 30% 43% 80% 31% 7% 10% 12% 14% 29% 61% Skills in general
Client / customer interaction skills
Other interpersonal skills
Other non-technical skills
Sector knowledge / experience
Business skills
Technical IT skills
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010 14
Although the number
of people applying to
Computing courses
in Higher Education
increased by 10%
over the past year, for
the period 2001-2009
numbers fell by 44%
Higher Education
IT related Higher Education remains an important source of talent for the sector’s labour force requirement. However, Influenced by a number of factors and despite a 13% resurgence from 2007 to 2009, the number of all applicants (all domicile) to such courses in the UK has declined by 44% since 2001. By comparison, the total number of applicants (all domicile) to all HE courses in the UK has increased by 41% over the same period. In addition, comparing applicant numbers to Computing degrees with those to other Science, Technology, Engineering and Maths (STEM) subjects shows that whilst from 2002-2009 applicants to Engineering, Biological Sciences and Physical Sciences have grown by 25%, 24%, and 22% respectively; applicants to Computing has dropped 33% over the same time period.
Further Education
The number of IT & Telecoms related Apprenticeship programme starts totalled nearly 9,000 in 2008/09 – a 38% increase on 2005/06, 51% of which were onto the ‘IT & Telecoms Professional’ apprenticeships (a huge increase on the previous year of 650%). The number of achievements also grew by 46% over the same time period.
89% of all IT & Telecoms and IT user related NVQ / SVQ (35,500) and 93% of all VRQ awards (18,400) were in England. IT & Telecoms related NVQ / SVQ awards account for 4%, and VRQs 17%, of all respective qualification awards in the UK with the majority for both being at level 2.
ITQ registrations have decreased by 3% and achievements by 28% over the past year. The large majority of these registrations are through either City and Guilds (33%) or OCR (43%), with 72% at Level 2.
Schools and colleges
The number of Computing A-levels taken in England, Northern Ireland and Wales has declined by 60% since 2003 and now constitutes just 0.5% of all A-levels sat. The number of ICT A-levels taken in England, Northern Ireland and Wales had declined by 34% from 2003 to 2009 but has since stabilised in 2010 and now constitutes 1.4% of all A-levels sat.
8.0 IT related education
and qualifications
15
Figure 8: Number of students taking A-level Computing and ICT courses, 2001-2010
Source: e-skills UK analysis of data from the Joint Council for Qualifications and Department for Education (2001/ 02)
Considering GCSE-level education in England, Northern Ireland and Wales, there are a number of courses, including a GCSE in ICT, a GCSE double award in Applied ICT, and a short course GCSE in ICT. These also show a decrease, with a decline in numbers of 57% between 2005 and 2010.
The trend in Scotland is similar to that seen in the UK. Over the past two years there has been a 14% decline in the uptake of IT related courses in Scotland, from 2006-2008 numbers had increased.
Gender
As is the case in industry, gender imbalance is prevalent across IT related courses, and this is worsening over time throughout the education system. 15% of applicants to Computing degree courses are female and the proportion of females taking Computing A-level remains low at 9%.
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Computing ICT
Gender imbalance is
prevalent across IT
related courses, and
this is worsening over
time throughout the
education system
9.0 The wider population’s
use of IT
16 Just under three quarters of IT users in the workplace have related skills at intermediate
level (or an NVQ level 2 / equivalent) or above9.
For just over one in ten employers, these skills are not considered to match those needed by the business and these skills gaps are most often thought to occur in the general hardware / software skills & knowledge of staff or, more specifically, their ability to use spreadsheets.
Figure 9: Employer views on the IT user skills of applicants for non-IT & Telecoms positions
Source: e-skills UK employer survey, 2010
As with gaps in IT & Telecoms professionals’ skills, IT & Telecoms user skills gaps are often created, or at least compounded, by unavoidable events such as the introduction of new projects / products / services / systems or the introduction of new personnel to the company / job roles.
It is estimated that around 4.6 million people each year will undertake some form of IT user skills training, however the delivery of at least 40 million development units (one unit equates to a movement of one level in one sub-skills group of the e-skills UK IT User Skills Framework) per annum are thought to be needed if the skills of IT users are to remain in line with those required by their employers over the coming two years.
Though gradual increases in the level of IT user skills of staff (at the firm level) can be realised via the recruitment process, just over one in ten recruiters state that the level of user skills amongst applicants for work are below the level needed of them. Again, the skills most often thought of as being below par appear to be general hardware skills / knowledge and spreadsheet skills.
Just over one in ten
employers (13%)
responding to the
e-skills UK 2010
employer survey
stated that there were
gaps between the
skills held by their IT
user staff and those
needed by the firm
9 Where at least some IT skills are held
76% 72% 9% 73% 9% 79% 10% 85% 14% 17% 46% 19% 80% 21% 70%
Skills are below the level required Skills are equal to the level required Skills are above the level required
Email / internet skills 5% 19%
Word-processing skills 20%
Willingness to learn IT user skills 18%
Ability to learn IT user skills 11%
General software skills / knowledge 0%
Electronic social networking skills 36%
General hardware skills / knowledge Spreadsheet skills
1% 10%
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010
17 17
Growth in demand for IT & Telecoms professionals has increased over the past year for all nations and within Northern Ireland in particular. There has not however, been an increase in reports of hard-to-fill vacancies or IT & Telecoms related skills shortages.
The incidence of IT & Telecoms related skills gaps and skills gaps amongst IT users has also remained largely consistent year-on-year, though employers in Scotland, and to a lesser extent, Wales currently appear much more likely to be experiencing such gaps than others across the UK.
The incidence of education / training received by IT & Telecoms professionals and the likely delivery of IT user skills training are again, relatively consistent throughout the UK though employees in Northern Ireland were notably less likely than others as a whole to receive education / training.
Though it is not possible to determine exactly, in the case of both IT & Telecoms professionals and IT users, the current levels of education / training being delivered appear to be below the level identified by employers as being required to maintain a balance between the skills held / needed by their workers in the near term.
Over the 2010-2014 period, the demand for IT & Telecoms professionals and skills from employers is forecast to increase by around 1.4% and growth is predicted to occur within each of the constituent nations, however in Northern Ireland the level of growth is predicted to be much higher at around 1.7%.
As demand increases, growth in supply will also be needed if related shortages and gaps are to be avoided, however in most instances one of the main sources of new talent – academia – is still exhibiting a long term downward trend. There are exceptions however and in Northern Ireland there has been a significant increase in the number of GCSE students over the past four years.
If the demand / supply balance for IT labour and skills can be realised and maintained, significant rewards could be realised by all UK nations and optimisation of the use of ICT amongst businesses in England in particular could produce an uplift of £44 billion in national GVA.
18
Figure 10: Potential GVA uplifts (£ billions) across the UK over the next 5 -7 years
Source: Technology Insights 2011: The economic and social impacts of ICT on the UK, e-skills UK / Adroit Economics
0 10 20 30 40 50 60 UK England London South East Scotland North West East of England Yorkshire & Humber West Midlands South West East Midlands North East Wales Northern Ireland 50.7 43.8 14.7 7.6 5.0 4.5 3.7 3.3 3.2 3.0 2.6 1.4 1.1 0.7
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010
19
IT & Telecoms professionals
To ensure the UK can fully exploit the transformational power of technology and become a global leader in delivering business value from technology it needs the skills of the IT & Telecoms workforce to be world class.
Despite the recent recession, demand for IT & Telecoms professionals has increased over the last year particularly in the areas of system design and development. Employers report some problems recruiting Software Engineers, IT & Telecoms Management, Systems Developers and Internet staff and they are seeking applicants with a range of technical skills including SQL, C, C#, .Net, SQL SVR, ASP, Java, HTML, JavaScript and Oracle. Currently one in ten firms reporting gaps in the skills of their IT & Telecoms professionals most often identify their business and technical skills as lacking.
Over the coming decade the growth of IT & Telecoms professional occupations is substantial, forecast to grow at 1.42% – which is more than three times the UK average and this growth is strongest in roles such as Software Professionals along with ICT Managers and IT Strategy & Planning Professionals.
The changing nature of skills in the UK is predicted to continue to be primarily in high value roles such as project management, systems architecture, business process, change management, security, risk management, analytics and web / internet development, with an increasing need for customer, consumer and business-oriented skills as well as sophisticated technical competencies.
In the immediate term (1-3 years) employers report a priority need for IT & Telecoms professionals to have high level security and data protection skills to enable them to develop, integrate and maintain security solutions across many different systems and applications.
The wider workforce and IT users
Making the most of technology is arguably the single most important step that can be taken to improve productivity across the UK economy. To achieve this, not only do all individuals need increasingly sophisticated skills in the use of IT, the UK’s 4.5 million managers and leaders across every sector need to grasp the strategic implications of technology and have the skills to realise its potential.
Despite this, more than one in ten firms report gaps between the skills held by their IT user staff and those needed by the firm and when recruiting just over one in ten employers also state the level of IT user skills amongst applicants for work are below the level needed of them.
Although general hardware skills / knowledge are most often thought to be lacking amongst IT users by employers, the actual overall percentage of workers with gaps in this area was lower than that associated with a lack of spreadsheet skills.
Moving forward over the next few years if the skills of IT users are to remain in line with those required by their employers then over one half of the future training required is predicted to be at significantly higher levels than that which is currently needed.
11.0 Current and future skills
priorities
© Copyright e-skills UK Sector Skills Council Ltd 2000-2010 20 The UK has one of the most competitive technology industries in the world, a highly
respected technology skills pool, and a particular expertise in the application of technology to deliver business benefit. Our vision is that the UK is recognised as a global leader in delivering business value from technology.
IT & Telecoms is at the heart of the modern economy, supporting the value add of practically all organisations in every sector. It is fundamentally affecting companies in all sectors and making the most of technology is arguably the single most important step that can be taken to improve productivity across the UK economy.
The Government’s ‘Blueprint for Technology’ identifies technology as being at the heart of new global economic opportunities. The IT & Telecoms sector is fundamental to securing private sector led economic growth in the years ahead; delivering productivity and global competitiveness, and creating the high value jobs on which the whole UK economy increasingly depends.
However, at current course and speed, the UK will fall behind. Even in the recession, organisations are continuing to report IT & Telecoms related recruitment difficulties and skills gaps both at ‘professional’ and ‘user’ level and just in the last year, the competitiveness of the UK’s IT industry has dropped from 3rd in the world to 6th. Even in the recession, the IT & Telecoms industry is continuing to report recruitment difficulties, and the UK is failing to capitalise on the £50 billion productivity gain which could be achieved through the better use of IT, particularly by smaller companies.
A coherent, strategic approach to skills is fundamental to enabling the digital economy to derive maximum benefit from the power of technology; transforming competitiveness and productivity through the creation of appropriate technology related skills. With this, the UK can be a global leader in technology. Without it, the country will become a second rate player in a high technology world. We need to ensure the school curriculum meets the needs of a new generation of ‘digital natives’; we need to deepen links between employers and universities; we need to address diversity issues so that the sector benefits from the whole talent pool; and we need to ensure our existing workforce maintains world class digital skills in a rapidly changing environment.
Based on the analysis and skills priorities set out in this document, and taking account of the current environment, e-skills UK will work together with partner organisations to deliver on three key strategic objectives to ensure the UK is truly world class at delivering maximum value from technology both in business and in society more widely:
1. Inspire future talent
To motivate talented students to pursue IT & Telecoms related careers, and better prepare all young people for work in a technology-enabled world.
2. Support IT & Telecoms professionals
Develop the IT & Telecoms professional skills pool as the best in the world for deriving business benefit from digital technology.
3. Campaign for the IT nation
Promote the compelling benefits of increased IT capability to organisations and individuals in every sector across the UK economy.
12.0 Global ambition & e-skills
UK’s strategic objectives
The Government’s
‘Blueprint for
Technology’ identifies
technology as being
at the heart of new
global economic
opportunities
21
Annex A: IT & Telecoms
professional occupations
e-skills UK has been licensed as directly responsible for IT & Telecoms professionals in all sectors and using the Office for National Statistics (ONS) Standard Occupational Classification (SOC) codes, the following table sets out these occupations for which e-skills UK has exclusive responsibility:
SOC (2000) Summary Related Job Titles
1136 INFORMATION AND COMMUNICATION TECHNOLOGY MANAGERS
Job holders in this unit group plan, organise, direct and co-ordinate the work necessary to operate and provide information communication technology services, to maintain and develop associated network facilities and to provide software and hardware support.
Computer Manager, Computer Operations Manager
Data Processing Manager, IT Manager
Systems Manager Telecom Manager 2131 IT STRATEGY AND
PLANNING PROFESSIONALS IT Strategy & Planning Professionals provide advice on the effective utilisation of information technology in order to solve business problems or to enhance the effectiveness of business functions.
Computer Consultant Software Consultant
2132 SOFTWARE
PROFESSIONALS Software Professionals are responsible for all aspects of the design, application, development and operation of software systems. Analyst Programmer Computer Programmer Software Engineer Systems Analyst Systems Designer Games Developer Web Designer / Developer 3131 IT OPERATIONS
TECHNICIANS IT Operations Technicians are responsible for the day-to-day running of computer systems and networks including the preparation of backup systems, and for performing regular checks to ensure the smooth functioning of such systems. Computer Operator Database Manager IT Technician Network Technician Systems Administrator Web Master 3132 IT USER SUPPORT
TECHNICIANS IT User Support Technicians are responsible for providing technical support, advice and guidance for customers or IT users within an organisation, either directly or by telephone, e-mail or other network interaction.
Help desk Operator
Helpline Operator (computing) IT Helpline Support Officer Support Technician (computing)
Systems Support Officer 4136 DATABASE
ASSISTANTS & CLERKS Database Assistants & Clerks create, maintain, preserve and update information held in electronic databases, computer files, voice-mailboxes and email systems.
Computer Clerk Data entry Clerk Data Processor VDU Operator
22
5245 COMPUTER
ENGINEERS, INSTALLATION AND MAINTENANCE
Computer Engineers install, maintain and repair personal computers, mainframe and other computer hardware.
Computer Engineer Computer Maintenance Engineer
Computer Service Engineer Computer Service Technician 5242
TELECOMMUNICATIONS ENGINEERS
Telecommunications Engineers install, maintain and repair public and private telephone systems.
Technical Officer (telecommunications) Telecommunications Engineer Telephone Engineer
Telephone Installation Engineer Telephone Technician 5243 LINE REPAIRERS AND
CABLE JOINTERS Lines Repairers and Cable Jointers install, maintain, test and repair overhead, underground, surface and submarine electricity and telecommunications cables.
Cable Jointer
Cable Repairer (electric) Overhead Linesman Cable Installer Telegraph Linesman Telephone Linesman Telephone Wireman
23
Using SIC definitions of 2003 and 2007, the following table sets out the SIC codes within e-skills UK’s core footprint i.e. the industry sector(s) for which e-skills UK has been exclusively licensed:
SIC 2003 SIC 2007
22.33 Reproduction of computer
media 18.20/3 Reproduction of computer media
64.2 Telecommunications 58.2 Software Publishing
72 Computer and Related
Activities 58.21 Publishing of computer games
72.1 Hardware consultancy 58.29 Other Software publishing 72.2 Software consultancy & supply 61 Telecommunications
72.21 Publishing of software 61.1 Wired telecommunications activities 72.22 Other software consultancy
& supply 61.2 Wireless telecommunications activities 72.3 Data processing 61.3 Satellite telecommunications
activities
72.4 Database activities 61.9 Other telecommunications activities 72.5 Maintenance and repair of office,
accounting and computing machinery
62 Computer programming,
consultancy and related activities
72.6 Other computer related activities 62.01 Computer programming activities 62.01/1 Ready-made interactive leisure and
entertainment software development 62.01/2 Business and domestic software
development
62.02 Computer consultancy activities 62.03 Computer facilities management
activities
62.09 Other information technology activities
63.1 Data processing, hosting and
related activities; web portals
63.11 Data processing, hosting and related activities
63.12 Web portals
95.1 Repair of computers and
communications equipment
95.11 Repair of computers and peripheral equipment
95.12 Repair of communication equipment
Annex B: IT & Telecoms
industrial classifications
24
Other relevant SIC Codes
e-skills UK has an interest in the elements of management consultancy concerned with technology and business change:
70.22/9 Management consultancy activities (other than financial management)
e-skills UK has a shared interest in technology manufacturing, which is owned by SEMTA: 26.2 Manufacture of computers and peripheral equipment
26.20 Manufacture of computers and peripheral equipment
26.3 Manufacture of communication equipment
26.30 Manufacture of communication equipment
26.30/1 Manufacture of telegraph and telephone apparatus and equipment 26.30/9 Manufacture of communication equipment (other than telegraph and telephone apparatus and equipment)
27.31 Manufacture of fibre optic cables
Other codes of relevance but of less direct interest to e-skills UK include wholesale and retail sale of ICT equipment (owned by Skills for Logistics and Skillsmart respectively):
46.5 Wholesale of Information and Communication Equipment
46.51 Wholesale of computers, computer peripheral equipment and software 46.52 Wholesale of electronic and telecommunications equipment and parts
47.4 Retail sale of information and communication equipment in specialised stores
47.41 Retail sale of computers, peripheral units and software in specialised stores 47.42 Retail sale of telecommunications equipment in specialised stores
47.42/1 Retail sale of mobile telephones in specialised stores
47.42/9 Retail sale of telecommunications equipment (other than mobile telephones) not elsewhere classified in specialised stores
e-skills UK: Business and Information Technology, including Software, Internet &
Web, Computer Games, IT Services, Telecommunications and Business Change.
e-skills UK is the Sector Skills Council for Business and Information Technology, rated ‘outstanding’ in the relicensing of Sector Skills Councils in 2010. We work on behalf of employers to ensure the UK has the technology skills it needs to succeed in a global digital economy.
© 2010 Reserved, e-skills UK
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