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The UK’s digital natives: Unlocking the supply of digital skills

Spencer Thompson

21 August 2012

Whilst there has been an undoubtedly positive change in the labour market in recent months, the unemployment rate remains largely unchanged from a year ago, and amongst young people is still showing an increase. But when sustained employment growth starts to kick in again, it will be tied to emerging and growth sectors of the economy. The public sector, education and health are likely to be a more minor source of employment than they were in the pastand business services, particularly in technology-based sectors, are going to become more important.

This is shown in a study released today. A survey, by technology trade association Intellect, showed that firms in this highly-specialised industry expect to grow over the next six months, with around half expecting to recruit more staff. This reflects wider and more long-term shifts in the structure of the economy. The UK Commission for Employment and Skills (UKCES), which forecasts likely employment in different parts of the economy, predicts that employment in the IT sector will grow by around 2% a year between now and 2020. This is far faster than the growth rate of total employment (just less than 0.5%). Beyond this, it is likely firms in all sectors will need to employ more staff with similarly specific technical skills, as the economy in general becomes more reliant on digital  business.

So, surely, growth in technology in general should be expected to help alleviate further our persistent unemployment problem? Not exactly. It is commonly agreed we have a severe shortage of skills in this area. Computer services firms consistently report the greatest shortage of skills, for instance. At an event I attended recently, one of the speakers highlighted the huge number of vacancies for programmers in London, at the same time as we are experiencing widespread and persistent unemployment.

report prepared by communications firm O2, published today, raises some interesting questions about this received wisdom. Young people in general, it found, already possess many of those skills most in demand by business. Some of the figures are mind-boggling. 90% of young people understand and can use social media for promotional purposes, 12% of firms value e-marketing as a key driver of growth. 66% of young people can create a web-page, 20% of businesses said this was a key skill they would find valuable. Amazingly, 13% of young people are confident coders, arguably one of the most demanded and highly valued skills today.

Whilst this is only one study and should be treated with caution, it is interesting to ask why there is such a mis-match between the skills young people have and their current employment prospects. I suspect a lot of the digital know-how young people have was gained informally, through regular use of IT, the internet and social media at school, university and recreationally. As such they lack a qualification in these areas and it may be hard to demonstrate to employers they possess these skills. At the same time, perhaps those businesses looking for these skills are less likely to shoulder the risk of hiring a young, unknown quantity during difficult economic circumstances.

Whatever the reason, it is clear that as technology firms, and knowledge-based businesses in general, become a more and more significant part of the UK economy, we will need to un-lock the already existing skills of the UK’s ‘digital native’ young people. Future research by the Big Innovation Centre will look at the skills needs of high-growth sectors in more detail, and action in this area may be able to both alleviate unemployment and generate sustained economic growth.

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