THE SCALE of technological advance over the last two decades has been staggering, and it looks set to continue. According to the World Economic Forum’s competitiveness report, there will be 30bn devices connected to the internet by 2020, roughly four times the size of the estimated global population.
In recent years, several companies have been successful not just in developing these advances, but also in monetising them – look at Apple’s multi-billion dollar cash pile. In the UK, we’ve done reasonably well in adopting technology to enhance productivity, and in attracting strong flows of foreign direct investment. But this is partly due to the happy coincidence of our timezone and language – we can’t rest on our laurels.
To compete, it’s vital that we have a skilled workforce. Over 80 per cent of high-tech and science firms expect to need workers with higher technology skills over the next five years, which perhaps isn’t surprising. But in manufacturing and construction, the figure is 70 per cent, and in the private sector as a whole it’s over 60 per cent. Even in what might be considered the low-tech worlds of retail and hospitality, over half of companies will need more technologically adept workers.
In effect, industry in the UK is going to need 750,000 additional digitally-skilled workers by 2017. What’s worrying is that we don’t appear to have the people to fill these positions. Almost 60 per cent of employers say they are already facing a skills shortage.
Microsoft last year reported that there were 100,000 unfilled vacancies in its partner companies across the UK. In the current environment, where we are concerned about unemployment and low wage growth, this seems mad. A recent survey by O2, meanwhile, revealed a “disturbing disconnect” between employers’ requirements and the careers parents would encourage their children to pursue. Almost a quarter said digital skills are irrelevant to the future success of their children.
To avoid falling behind in terms of global competitiveness and living standards, there must be improvements in schools, colleges, universities and workplaces. We must look into alternative ways of imparting knowledge to young people, ensure that higher education courses are designed to meet the needs of employers, and continue to educate staff throughout their lives. Importantly, we must also address our poor record of attracting girls and young women into science, engineering and technological studies. Failure to address this gender imbalance will diminish our economic potential.
For the business community, a successful science and innovation strategy will involve the provision of a cradle-to-grave approach to skills and education across industry, including sectors previously thought of as “low-tech”. We need to see a breaking down of the barriers between business and academia.
Most importantly, we must not be complacent. We live in a competitive world, one in which business, government and academic institutions must work together to play their part in developing a successful strategy for science and innovation – there’s a lot to play for.
Anne Richards is chief investment officer at Aberdeen Asset Management.