Chris Hulatt, co-founder of Octopus Group, on why we must solve the growing skills gap.
“The message of our industrial strategy to the world is clear: Britain will be one of the best places in the world in which to start and grow a business” – words from the UK’s Prime Minister at this year’s Davos Summit, outlining the vision for the future of the country’s business landscape.
In order to safeguard such a bright future of our economy, we must first learn to champion the strength and versatility of businesses thriving today, and address the pressing challenges they are facing.
Britain’s startup scene is experiencing perhaps its greatest period to date, having undergone a phenomenal transformation in the last decade. The country has spawned a number of hugely successful businesses that have gone on to become global successes, including Improbable, SwiftKey and Zoopla to name but a few.
These businesses are future-proofing our economy with the fresh-thinking they bring to the table, underpinning innovation across a wide range of sectors. With rapid year-on-year growth and high turnover rates, high-growth small businesses are the game changers and the pillars of British economic prosperity.
The success of high growth small businesses has not only placed Britain on the map as a dominant startup hub, but has also had an immense positive impact on the wider economy. Recent research from Octopus Group shows that less than 1% of total businesses are adding 3,000 jobs to the UK economy every week, and contributing 22% of all economic growth.
We can undoubtedly acknowledge the role technology has played in this – whether it be in FinTech, where Britain has established itself as world leader, or areas such as artificial intelligence and BioTech where we are setting global standards for innovation. The UK is climbing up the ladder as a global trend setter, and we must ensure these businesses are supported with the infrastructure needed to grow.
With the tech sector leading the charge, substantial skills shortage challenges have been exposed – more than 50% of UK tech businesses highlighted a shortage of highly skilled employees. If not properly addressed, this could hamper the future of the digital sector and in turn the whole economy.
The changing landscape
The economic landscape is constantly shifting, and we must make sure we are developing the digital skills that the tech community needs. In years gone by, accountancy and law would hoover up thousands of graduates, but technology means that this is now changing – contracts for property acquisition, which used to take an employee a couple of days, can now be completed in a couple of hours using AI.
By 2022, 1.2 million new technical and digitally skilled people will be needed to satisfy future skill requirements and within 20 years, 90% of all jobs will require some element of digital skills.
The future of Britain’s digital economy is predicated upon the success of these businesses being able to foster growth, and it is vital that we plug the skills gap for them to succeed, especially as we prepare for our future outside the EU.
We have to begin thinking differently about the source of these skills that our future depends upon. As a country, we need to focus extensively on generating skills within the UK and developing home-grown talent, as we cannot deny that the post-Brexit environment will hamper our ability to import skills.
Providing greater support to our university programmes is the place to start. Investment in digital skills through academia should be a priority, particularly by incentivising graduates to pursue careers in the digital sector. A lot can be achieved with the recognition and celebration of role models in the tech space, in order to inspire future generations to pursue this path – we must do better on this front and connect different generations to facilitate future growth.
The digital economy of the future will be underpinned by the ties we build between generations, but also those we form between academia and the enterprise community. Whether it be through encouraging school career services to partner with small businesses, or ensuring that teachers are familiar with the technology that they will need to equip future generations with – these initiatives will be just as key moving forward.
Government must lead the way on this, but it will be up to both the businesses and the academic institutions across all levels to show commitment and support for government efforts to narrow the skills gap. The Digital Skills Partnership launched in 2017 is a core example of that, and similar programmes need to be developed and backed from all sides.
Collaboration between the public and private sector is the only way forward, as it will ultimately enable us to shape a generation of graduates fitting for the digital economy.
It will be through joint efforts and the ability to incentivise entrepreneurship that we will be able to create jobs, increase productivity and in turn drive economic growth, both regionally and nationally.
We must make sure to back our high growth businesses, invest in them and the talent they need, as we will ultimately all benefit from the economic prosperity these companies create.