Ungated Post | 28 Nov 2017

Tackling the UK’s productivity problem: investing in the right skills

The UK launched its Industrial Strategy yesterday, seeking to tackle the UK’s pervasive slow productivity growth. Developing technical skills is one of the key recommendations, through increasing teaching of STEM subjects, enhanced Computer Science education and “T levels,” the establishment of a National Centre for Computing Education and an Institute for Coding.  Coincidentally, last week BT and Accenture launched their study “Tech know-how: The new way to get ahead for the next generation.” Though they both seem on the same page in promoting tackling technology skills shortages, there are important differences in emphasis.

The BT/Accenture report was based on a survey we carried out of 5,000 UK respondents; 4,000 members of the Emerging Workforce (16- to 24-year-olds) and 1,000 older members of “Generation X” (40- to 51-year-olds). We asked them about their current skill levels, the ways they use technology on a regular basis, and their aspirations to develop careers involving technology. By looking across generations, we could compare skill levels, but also understand how skill levels translate to actual employment outcomes.

One of the difficulties with studies of this type is defining future skill requirements. We deliberately used a very broad definition, because of the wide variety of tech skills that will be needed in the future workplace. Most future jobs will need some understanding and day-to-day interaction with technology and data. Certainly, we will need the expert technical skills to build software and analyse big data, but only a small minority will work in such deep technical IT roles. To convert technology into improved productivity we will also need “creative” users of technology—who understand how technology and data can be applied to solve business problems and improve effectiveness. Most of the future workforce, will need the ability to interact confidently and effectively with technology and data. Basic tech competency will be sufficient for some, but these will be a small minority of the future workforce.    

Our four-point technology literacy framework—spanning Competent, Confident, Creative and Expert users of technology—reflects this range of different skill levels. The challenge is to achieve the balance the economy will need, with significantly more at all the higher (Creative and Expert) levels. STEM education is important for expert roles, though our analysis of Generation X shows that many experts do not have specialist Computer Science or STEM education, and for creative roles specialist education does not appear to offer a distinct advantage. In contrast, the industrial strategy’s emphasis on technical and computer science education only addresses part of the skills shortage, and risks alienating the non-technically minded, who will work in a tech-related job.

Our survey highlights that young people in the UK have high levels of technology skills today. They live much of their life online and are far more capable than Generation X at doing many sophisticated and creative tasks (e.g., writing a game, curating an online community, or commercialising online activity). They also have strong aspirations to use their skills in their future careers. Encouragingly, these high levels of skill are spread evenly across regions, ethnic groups, and genders, regardless of parents’ occupation.

There is clearly a problem, however, as for many, those skills and aspirations are not converted to high-paying tech roles. The problem is more acute for particular groups, such as females, those in certain regions, and those from less educated backgrounds. The challenge for the UK is to convert tech potential into jobs, and this can also be an engine to improve social mobility. Actions are needed to help young people make the connection between their tech skills and well-paid careers. Businesses can facilitate this by playing a more active role in spreading awareness, but ultimately it depends on the availability of job opportunities, which are not spread evenly across the country.

The BT/Accenture report estimates a potential benefit to UK GDP of £11 billion if this cohort of young people could find the jobs that meet their aspirations over the next five years. The benefits though, are likely to be far greater, in helping individuals and the UK economy build the resilience over the long term to adapt to fast-evolving roles.   

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