The Skills Gap


Digital skills will be needed everywhere in tomorrow’s world

Phil Smith

Phil Smith CBE FREng is Co-Chair of the Digital Skills Council and a member of the Digital Economy Council. He is also chair of the Royal Academy of Engineering’s Education Skills Committee. He is currently Chair of IQE PLC, as well as Chairman of tech companies Streeva and Appyway. He is former Chief Executive and Chairman of Cisco UK and Ireland, as well as a former Chairman of InnovateUK and Techskills. Additionally he is a founding associate of VOCL, and a C-Level Board mentor for Critical Eye.


  • Virtually all future work roles will involve digital technologies
  • Eight million people in this country lack the digital skills needed for the workplace
  • UK productivity continues to lag behind that of our major competitors
  • All young people need core skills in collaboration, communication, creativity and critical thinking
  • Digital skills need to be made contextually relevant to people.

The Digital Skills Council has been set up to address some of the gaps in the digital skills portfolio. We are living in a world now where technology pervades everything, not just the areas we have known about for years like shopping and travel, now also areas like health. The challenges of net zero and climate change mean these technologies will become much more far-reaching. With the advent of more advanced digital technologies like AI and quantum we will see a much greater impact.

People will be taking on roles and working in environments that are very different from those that we have used to date. National Grid has been talking about the need to recruit 400,000 people up to 2050, many in very technical roles, like smart grid, Internet of Things, and so on. The Faraday Institute, which is the battery institute, estimates that of the 182,000 existing vehicle technicians, only 20,000 or so who have electric vehicle expertise.

No matter what the role is, in future it will involve digital technology. The good news is that many jobs will be higher value and higher skilled. So, as an economy that needs to succeed in an increasingly complex world, where we also want to create higher-value jobs, it is good news that we are preparing people for this transition.

However, there are significant challenges and a long way to go. There are hundreds of thousands of job vacancies quoting the need for digital skills in particular. Employers have to find a way of bringing these skills into the system in order to fill the roles that are already available, as well as those we need to create for the next generation.

Skills readiness

One of the fundamental challenges concerns the level of digital skills across the nation. Lloyds Bank has been tracking the ‘Essential Digital Skills Framework’ for the past six years. It turns out we have over eight million people in this country who do not have the essential digital skills needed for work. That is shocking!

If we look at some of the opportunities opening up in the advanced industries, we need to be building a pipeline of people to take advantage of them, not just find the experts at the top levels. The Digital Skills Council is looking to see how we build the bottom of the triangle as well as the middle and top.

There are two key gaps that have been identified in that Essential Digital Skills Framework. The first relates to safety. Do people have the confidence to go online? Can they navigate that environment safely? Do they need help.

There are, however, some encouraging statistics here. In 2020, only 37% of people in the 18-24 range had the essential digital skills, but by 2021 that number had risen to 70%. That has probably been stimulated by the necessity to use digital technology during COVID – but it is a very encouraging trend.

The second gap relates to our competitiveness and productivity as a nation. The UK still lags significantly behind our competitive nations, some 17%, behind the G7 in terms of productivity. The two items that can most affect that figure are, on the one hand, leadership and management, and on the other, technology adoption.

Many businesses, particularly small enterprises, do not have the confidence to harness technologies because they do not have the skills that underpin them. We are behind many of our European counterparts in this regard.

Partly, this is due to the speed with which technical learning environment is moving. In fact, it is not providing what we need. Only 19% of those in technical jobs today are women. There is something quite fundamental about the system that is not correctly addressing our needs.

Gender imbalance: Only 19% of those in technical jobs today are women. 


Next steps

The discussion about what to do about this is often held back by issues about the subjects people study, particularly the need for more participation in STEM. While this is extremely important, it is not the whole story. Take computing for example computing, which has undergone great change over recent times. The curriculum was revised in 2014 and a computing science GCSE was put in place. Unfortunately, many people were turned off the subject and did not continuing with it. There is a real problem with the way it is perceived. The focus on physics, maths and so on, does not reflect the changing dynamics of society. Everybody should be able to access a level of baseline capability: this would be very attractive to people within a business environment.

People often ask: what skills do businesses need? As a business person, I am not sure there is a simple list. Even if that were possible, these needs may change in the future. There is much discussion about apprenticeships for roles in cyber intrusion analysis. In my business, I definitely need some of those today. Will I need them in 20-30 years’ time? I am not sure. Many current roles may be made redundant by AI and other capabilities.

However, there are certain fundamental characteristics that need to be included on courses for young people. Almost all education should be framed around the core qualities of collaboration, communication, creativity and critical thinking. In the digital arena, we have also been looking at how young people can understand what a career in this area might entail and whether it is something they might want.

An OECD definition of digital skills is that this is ‘problem-solving in a technology-rich environment’. That is a useful way of characterising it. For a plumber, that means sending invoices, communicating with customers, ordering supplies, and so on. A nurse needs these skills in order to spend more time in front of patients and less filling in forms. Digital skills have to be made contextually relevant. I hope to see much more of that kind of thinking in the engagement of business in apprenticeships. This is of course in addition to the subject-specific qualifications that enable students to progress into business environment. Ultimately, we need to focus more on the skills which bring the right skills into business, rather than focussing purely on the job specification.