Businesses and public services are being held back by a failure to meet their demands for digital skills, according to Scottish Labour.

It says that between 2014 and 2021 the proportion of businesses who say their staff are equipped to meet their digital technology needs has plummeted from 37% to just 21%.

Meanwhile, the number of employers struggling to hire staff with appropriate digital skills has soared.

The most recent employer skills survey showed that in 2022 more than 11,000 employers with skills shortage vacancies struggled to find an applicant with digital skills – more than three times more than in 2020, when 3,300 employers raised this concern.

Similarly, 6,400 employers reported struggling to find an applicant with advanced IT skills compared to 1,700 in 2020 – an almost fourfold increase.

Scottish Labour has put skilling at the centre of a new consultation paper on developing the digital economy. It notes the findings of former government chief entrepreneur Mark Logan whose Scottish Technology System Review (STER) identified barriers to growing the ecosystem.

These include “an education system that isn’t harnessing the potential of digital and tech, a cluttered landscape of business support, a lack of strategic investment, gendered stereotypes in subject and career choice, and significant skills shortages.”

While drawing on a number of the SNP government’s initiatives, Labour’s consultation paper claims the government has failed to act on recommendations by STER.

Addressing a gathering at the Edinburgh Futures Institute, Scottish Labour Economy spokesperson Daniel Johnson said: “Scotland is perfectly placed to be a world-leader on technology and Scottish Labour is determined to seize that opportunity.

“Technology can transform our economy, boost growth and modernise our public services, but we need leadership from government to make that a reality.

“We need a skills system fit for the future that equips our workforce with the cutting edge digital skills businesses and public services need.

“We need to improve digital skills across the board, and in particular ensure we have the advanced specialist skills needed to make the most of the opportunities in front of us.

“Scottish Labour will overhaul Scotland’s skills system and work in partnership with businesses to unlock Scotland’s vast potential for technological advancement.”

Sarwar admits challenges ahead

Speaking before the presentation, Scottish Labour leader Anas Sarwar admitted he has another “mountain to climb” as the party sees its support plummeting.

Claiming his first two “mountains” were rescuing Scottish Labour from near extinction and then winning last year’s General Election, Mr Sarwar admitted he faced another tough task to win at the 2026 Holyrood election.

Not only has the party fallen behind the SNP, it is also seeing a surge in support for Nigel Farage’s Reform UK since the General election – rising from about 6% of the vote to 13% in recent polling – a result which could see it hold the balance of power in Holyrood after the 2026 vote. 

“I didn’t do mountain climbing before I became leader but I’ve climbed two mountains and I’m happy to climb another,” said Mr Sarwar.

He insisted there would be no formal “coalition or agreements” with Reform – but he did not rule out relying on Mr Farage’s party’s votes to pass key legislation should Labour get the keys to Bute House. He said he did would not seek any formal coalition with Reform but was “open to good ideas”.

He declined to respond when asked if his chances of winning the election had been undermined by the UK budget and the public’s disappointment in Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves.