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Report forecasts unprecedented demand

Skills alarm as digital outgrows economy

John Swinney at CodeClan
Government minister John Swinney at the launch of CodeClan (photo by Terry Murden)

Digital technology companies are forecast to grow twice as fast as the Scottish economy over the next few years, raising concerns over the supply of skilled workers.

This growth is creating unprecedented demand for digital skills with employers across all sectors seeking to harness the benefits of technology to drive innovation and increase competitiveness.

It will feed concern that Scotland needs to substantially and rapidly increase the supply of digitally skilled workers to meet demand, including those from overseas.

There has already been concern that the Brexit deal will reduce the number of immigrant recruits, prompting an increased focus on creating homegrown talent through such initiatives as the CodeClan skills academy which re-trains workers.

The new publication, Scotland’s Digital Technologies, compiled by Skills Development Scotland and the Digital Technologies Skills Group, found that the sector was the fastest growing sector of the economy.

It accounts for 5% of Scotland’s total business base and employs 2% of the national workforce. 

The number of tech businesses rose by 53% between 2010 and 2015 – almost three times as fast as businesses across Scotland in its entirety (19%). Micro businesses employing 1-10 employees account for 95% of firms in the sector. 

More than 60,000 people are employed in tech businesses across Scotland with 60% working in tech roles and 40% working in other types of jobs. The top three employment areas are Glasgow City (29%), Edinburgh (23%) and West Lothian (9%).

Tech professionals are in demand across the whole economy and more than 90,000 people are employed in tech roles in all sectors in Scotland – a 10% increase in employment from 2015-2016. Two fifths are employed in tech businesses with the remainder employed in other sectors such as finance, creative industries, engineering and healthcare.

Derek Mackay speaking at the ScotlandIS conference (photo by Terry Murden)

Speaking about the findings, Scottish Finance Secretary, Derek Mackay, said: “Scotland has a proud tradition as a digital leader and today this government is putting digital technology at the heart of everything we do, from reforming our public services to boosting digital skills and fostering our tech sector.

“In March this year we published our ambitious refreshed digital strategy which reflects our vision for this area by aiming to create 150,000 digital jobs, ensuring all premises have access to broadband speeds of at least 30Mbps by 2021, and integrating digital into schools and further education.

“Today’s report is good news and underlines the importance of digital skills to our economic and inclusive growth.  We will continue to work across Government, with Skills Development Scotland and our other partners, to build on these strong foundations and meet future challenges, including through our STEM strategy which will be finalised later this year.” 

Claire Gillespie, key sector manager for ICT and digital skills at Skills Development Scotland, said: “The digital technologies sector is expanding and is a key contributor to the economic growth and global competitiveness of every sector in Scotland.

“This growth is creating significant job opportunities for skilled workers, particularly young people and other new entrants across a wide range of roles. The Digital Technologies Skills Group is working to broaden the talent pipeline for the future to ensure Scotland can achieve its digital potential.” 

It is estimated that Scotland has up to 12,800 tech job opportunities annually – a 16% increase on the previous demand forecasts of 11,000. Over half of employers (51%) surveyed  on behalf of the DTSG in December 2016 said they had recruited tech skills in the last 12 months and 38% of employers had open vacancies in digital technology roles. 

Many employers respond to the challenge of recruiting tech staff by hiring interns and graduates, showing an appetite to invest in younger and less experienced talent.

The number of young people studying and passing computing science at school increased by 8% to 14,212 between 2014 and 2016. Computing science is just one of the learning pathways into tech courses and careers as all STEM disciplines develop transferable skills and knowledge.

Scotland’s total computing science enrolments at university has increased by 20% since 2012/13 to 15,111. Graduates who enter full-time employment move into a variety of sectors, the most common being information and communication (35%), financial and insurance (16%) and manufacturing (10%).

Modern Apprenticeships are also on the rise and the number of Digital Technology MA starts has increased by 46 percent in the last two years to almost 950 starts in 2015/16. MAs help employers to develop their workforce by training new staff and up-skilling existing employees.

The Scottish Government’s Digital Strategy sets out its goal to increase the number of people in digital technology roles to 150,000 by 2021. Preparing young people for the digital future by improving digital skills levels is an integral component of this strategy.

The report is based on a research study undertaken by Ekosgen and forecasting undertaking by Oxford Economics on behalf of the Digital Technologies Skills Group and their partners.

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