• Chris Hearld, Author |
3 min read

When I look at the challenges facing the UK economy, rising unemployment and a lack of digitisation are critical issues to overcome. Investment in boosting digital skills in our workforce will go some way to addressing both issues and will have the added benefit of increasing productivity.

Unemployment rose by 730,000 between March and July, and the situation is expected to worsen. As the Job Retention Scheme unwinds, our Chief Economist predicts that we will see a rate of almost 6% unemployment by the end of the year.

While lockdown was putting livelihoods at risk, it was also illustrating the importance for many businesses to have a digital offering.

As most of us found ourselves relying more on technology during lockdown, those running businesses with a digital operation recognised it was a crucial sales lifeline. Those that didn’t, realised the urgent need to make progress.

Our consumer behaviour research found that nine in ten consumers have changed the way they deal with businesses since the spring and have increasingly turned to digital channels. More than eight in ten who had a good experience switching to an app from the store or branch say they will continue to use this channel in the future.

Understandably, consumers have emerged from the crisis as more digitally savvy than ever. It’s now imperative that businesses accelerate their digital agenda as part of their recovery strategy and ensure they are able to future-proof.

Digital skills are also key to improving a country’s productivity levels, which are so intertwined with its prosperity.  Productivity is a particular issue for the country’s privately-owned businesses, which create six in every ten jobs but must also compete hard with the largest companies for their talent.

Before the pandemic, the labour market for digital skills was tight. Now the gap between supply and demand is likely to widen, causing a shortage. Even by July, the Recruitment & Employment Confederation was reporting a surge in tech recruitment advertising.

So, redundancies mean we have a pool of labour seeking new opportunities. Some of the previous roles will return, others will not. And we have thousands of businesses requiring the skills to enable their digital agenda.

The government’s employment support efforts are notable. The Kickstart Scheme, traineeship programme and sector-based work academies have valuable roles to play.

Considering tech more specifically, there’s welcome progress at the further and higher education point with vocational T Levels launching this month, including digital skills qualifications and the development of Institutes of Technology around the country.

However, considering those already in the workforce, the scale of the UK’s situation requires a step change to retrain large numbers of people and equip them with the tech skills needed to help drive growth.

This doesn’t mean a top-down initiative is the answer. It requires empowering the devolved administrations and combined authorities to develop their labour pools’ skills in a regionally relevant way, in support of their levelling up ambitions. We are seeing reference to the need for skills investment in economic recovery plans around the country.

Business, providers, funders and local government will need to work together differently. One priority is to refer to data insights to help places to really understand their labour market in a dynamic way. These insights can show where the opportunity is now, along with any gaps in supply and demand. Training providers are going to respond, if shown a market.

The foundations also have to be laid now in relation to the skills that will be needed in the future, so places can establish the structure for meeting the demands on or beyond the horizon.

Businesses should also be thinking about where their market will be in three, five and ten years and how they will shape their talent accordingly. They certainly have a role to play in developing regional skills plans.

The extremely difficult circumstances of unemployment growth, combined with the digital transformation focus, could turbo charge the tech skills agenda and with it the future prospects of individuals and the economy. It could also boost our productivity. But it requires investment across the country.