Our analysis finds that talent supply is a key challenge facing UK digital tech businesses
6 recommendations for tech growth
This analysis is based on the voices of over 2,700 digital tech founders and community leaders. We suggest 6 key areas on which productive collaborative working could be focused.
Our analysis finds that talent supply is a key challenge facing UK digital tech businesses
1) DIGITAL TECH SKILLS: Equip young people for digital tech careers through learning opportunities
More than 50% of respondents highlighted the challenge of finding employees with the right skills.
In fact, almost 25% characterised sourcing talent as a ‘major challenge.’ Steps are already being taken to address this shortage and equip the UK’s workforce with the skills needed for roles in the digital tech sector. We suggest 3 areas of focus to further this agenda:
i) Digital Education
Government reforms of the technical education system will see the creation of a specialist digital route, with employers setting standards and specifying the knowledge, skills and behaviours that individuals will need.
Strong education models include the CyberFirst programme, Ada National College for Digital Skills and Cardiff University’s National Software Academy. Other inspiring initiatives which are successfully equipping young people with the skills of the future include the Exeter Mathematics School, The Studio in Liverpool and École 42 in Paris.
ii) Collaboration and Engagement
Dorset’s Digital Wave conference for schools, Norwich’s #DigitalCity trail and nationwide TeenTech are all powerful examples of how to reach out to younger generations and inspire them to consider a career in digital tech.
Young people can also be engaged through Code Clubs, learning programmes and mentoring programmes.
Successful examples include Founders4Schools, Apps for Good, Young Founders, Fire Tech Camps and CoderDojo.
iii) Digital Apprenticeships
Digital degree apprenticeships have already been introduced, and employers are collaborating with government in the development of 13 new digital apprenticeship standards, with more in the pipeline.
We must continue to encourage apprenticeships for digital tech careers, learning from examples such as the NextGen Skills Academy and the social media apprenticeship scheme run by The Juice Academy. Increased transparency and accessibility would help to ensure employers are aware of the new digital tech standards. These can be found here.
2) GENDER DIVERSITY: Improve gender diversity in the tech sector
Today, UK digital tech is comprised of an overwhelmingly male workforce.
Our survey found that just one in nine digital tech companies has a majority of women in their workforce. In more than half (53%) of the organisations represented, men outnumber women by at least three to one. Work is already underway to redress the underrepresentation of women in the sector, by encouraging uptake in STEM subjects at GCSE, A-level and university. This should be continued (with commitment) while other initiatives are also explored, such as:
- Re-skilling women with digital tech skills through programmes such as Founders & Coders, Northcoders, Makers Academy and General Assembly. Some of the very best have high job success rates within three months of graduating.
- Businesses must commit to diversity in the sector – the Government’s Tech Talent Charter which advises on best practice to encourage diversity is a good first step, and should be built upon.
3) FINANCING: Improve access to finance at every stage of growth
Over 40% of digital tech founders or businesses told us that access to funding is a significant business challenge.
Although not every company needs venture capital or loans to fuel their growth, improving access to capital can make all the difference to international competitiveness, especially for high growth companies. This could be achieved through:
- Nurturing and developing local angel networks – as well as exploring the opportunity to work with Government more closely to leverage private-led funds (as and when appropriate).
- Patient Capital – the Chancellor’s Autumn Statement was a step in the right direction and included £400 million of investment for continued support to ensure that the UK’s digital businesses can scale. Also, to be welcomed is the Treasury-led review into barriers for accessing patient capital.
- Harnessing the power of universities – UK universities can provide crucial access to funding and practical business support for their students and alumni. Fine examples include Manchester Metropolitan’s Innospace, UCL’s Hatchery, Southampton University’s Future Worlds, Sheffield University’s Campus Capital and Cambridge Enterprise. This impactful work must continue and other universities should follow suit.
4) DIGITAL CONNECTIVITY: Boost digital connectivity across the country
Almost a third (30%) of digital tech founders and CEOs said digital infrastructure continues to present a challenge.
Investment is essential if businesses are to thrive and grow. In the UK, fixed internet traffic is now set to double every two years, while mobile data traffic will increase at a rate of between 25% and 42% per year. In order to meet this rising demand we should continue to increase access to Ultra Fast Fibre to the Premises (FTTP), which can be achieved by encouraging alternative providers, such as Hyper Optic and Optimity, to expand into urban areas. Ways to improve access for rural areas must also be explored with the Government’s recent announcement of £1 billion for this purpose (including full fibre and 5G), is a very promising sign. The UK must continue to exploit this considerable potential.
5) NURTURE INTERNATIONAL TALENT: Attract the best and brightest global tech talent
Thirteen per cent of jobs in the digital tech sector are currently filled by international workers, and this rises to 31% in London and the South East.
The Government’s ongoing support of the Tech Nation Visa is commendable and the recent 25% increase in capacity for this Tier 1 route is to be celebrated. As the UK begins the process of leaving the European Union, the tech sector has highlighted the importance of being able to recruit highly skilled staff from the EU and around the world. Tech City UK continues to work closely with the Home Office in order to help ensure that the UK continues to attract tech talent from all over the world.
6) WORKSPACES AS VITAL RESOURCES: Facilitate physical spaces for startups to be created and grow
Co-working spaces play a vital role in successful digital tech ecosystems.
In fact, almost three-quarters (74%) of our survey respondents who had used co-working spaces rated them as useful. Our survey found that co-working spaces continue to be important to startups with the use of office space becoming more relevant as the number of startups grow. Tech City UK and the government should continue to work together to support them.