UK’s digital skills gap poses risk to economic recovery, research reveals

The UK’s digital skills gap could pose a risk to economic recovery, new research from Microsoft reveals, with over three-quarters of UK leaders citing a large digital talent pool as essential to driving UK competitiveness.

The study, entitled Unlocking the UK’s potential with digital skills, was conducted in partnership with Dr Chris Brauer at Goldsmiths, University of London to assess the UK’s digital skills gap and provide practical guidance for organisations on how to tackle it. It predicts the rise of a “Next Gen Worker” that is empowered by low-code and no-code technology, but also finds that a failure to embrace digital skills could leave companies struggling to compete on the global stage.

According to the findings, 80% of UK leaders believe investment in digital skills will be important to the country’s economic recovery following COVID-19, while 78% also view a large pool of digital talent as essential to driving UK competitiveness.

The majority of UK employees (59%) think developing their digital skills will be important to future employability, while 49% felt it was important to develop their digital skills capabilities following the outbreak of COVID-19 and the first UK lockdown in March.

Yet despite consensus around digital skills being essential to economic recovery, more than two-thirds (69%) of UK business leaders believe their organisation is currently facing a digital skills gap skills gap. Many are concerned that the lack of digital skills in their organisation will impact success.

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The majority of UK employees (59%) think developing their digital skills will be important to future employability

Additionally, 63% of UK employees did not agree that they have the appropriate digital skills to fulfil new and emerging roles in their industry.

The research raises concerns over the UK’s digital shortcomings, which have come into sharper focus due to COVID-19 and the acceleration of digital transformation at many companies. Separate research from CBI recently revealed that nine in 10 employees will need to need some form of reskilling by 2030, with businesses, government and individuals needing to increase spending on adult education by £130 billion over 10 years (£13 billion a year).

Speaking ahead of Microsoft’s Digital Skills Week, Simon Lambert, Chief Learning Officer for Microsoft, said: “At a time when digital innovation is accelerating, we see it as our responsibility to help people acquire the right skills to succeed – be that for their own benefit, to boost the performance for the organisations they work for or to future-proof the UK’s competitiveness on the global stage. Digital skills are the currency of digital transformation, for individuals, organisations and the UK as a whole, they will play a vital role in unlocking the way forward.”

Microsoft’s research also highlighted that digital skills are responsible for a minimum of 2.4% of a firm’s bottom line. For a company with annual profits of £1 billion, that equates to £24 million every year.

In an uncertain economic climate –54% of UK organisations have reported a net decrease in revenue this year, according to Creating a blueprint for UK competitiveness – this impact should not be underestimated. Microsoft’s research also identified talent and skills development as a key dimension essential in driving organisational competitiveness.

Unlocking the UK’s potential with digital skills includes insights from leading UK businesses, industry experts and academics. Alongside cost (37%), the lack of a skills investment strategy (28%) and a lack of knowledge on which skills initiatives to focus on (23%) were the biggest barriers organisations cite when addressing the skills gap.

here and visit Microsoft Learn to discover more about Microsoft’s digital skills training initiatives.

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