Can Britain truly undergo an effective digital transformation?

What does effective digital transformation look like? The UK needs to grow its digital economy to suit all of the job opportunities predicted to rise in the next few years – but a world-leading skills framework is needed

In June, the UK government’s now-former Tech Minister, Chris Philp, outlined the latest national Digital Strategy. Offering a single vision to grow the country’s Digital Economy, the strategy seeks to ensure that digital technology, infrastructure and data drives economic growth and innovation in the coming years. If executed well, the strategy promises to lead to new jobs, skills and services that benefit and level up the whole of the UK with an effective digital transformation.

In many ways, the United Kingdom is currently well positioned to drive effective digital transformation, with an expanding tech economy. In the first six months of this year, more than £12 billion in venture capital funding was secured by UK tech startups and scale-ups so far this year – which is more than the entirety of 2020. Only startups in the United States and China drew more funding than British ones in the first half of the year.

Many of these startups, too, go on to achieve great successes. Last year, a British startup that ended up attaining unicorn status – a valuation of $1 billion or more – was created every eleven days.

Entrepreneurial excellence

Entrepreneurial excellence, then, continues to characterise the British technological economy – and that excellence is compounded by the research infrastructure required to nurture innovation, with four of the world’s top ten universities situated in the nation’s ‘Golden Triangle’.

The missing piece of the jigsaw – that institutions, enterprises, and leaders must unite to solve – is skills. The UK has some of the world’s best further and higher education institutions, and a thriving startup ecosystem, yet the skills gap between graduates and employers is significant.

There is a wealth of worrying data regarding British worker proficiency. The recently-released Coursera Global Skills Report, which ranks 100 nations based on learner competency in three key domains (Business, Technology, and Data Science), suggests that the United Kingdom’s technology and business skills proficiency lags behind the majority of European nations, jeopardising the nation’s ability to realise the government’s vision. The UK places 42nd globally for technology skills proficiency, is ranking ‘Lagging’ for Business skills, and in its strongest domain – Data Science – is still found outside the global top 20 (28th).

Proficiency in key subdomains

Proficiency in key subdomains threatens to leave British businesses and research underprepared for the challenges of the digital economy. Flourishing enterprises require outstanding leaders and keen strategic thinking to navigate through the economic and supply chain headwinds faced by the global economy – yet UK learners only record 15% proficiency (‘Lagging’) for Strategy & Operations, and 29% (‘Emerging’) for Leadership & Management.

Official statistics indicate that 39% of British businesses were subject to a cyber attack in the last twelve months – threatening significant economic losses and reduced productivity – yet British learners only scored 29% for proficiency in the Security Engineering subdomain. With additional data suggesting that 60% of small businesses fold after being subjected to a data breach or cyber attack, the need to mitigate the national skills gap here represents an economic imperative.

An additional economic imperative arises from the pace of change in the national – and global – labour market, accelerated by the pandemic. A report by the Learning and Work Institute (L&W) in 2019 found that the UK skills shortage will cost the country £120 billion by 2030. Overall, there will be a shortfall of 2.5 million highly skilled workers and an oversupply of 8.1 million people with traditionally intermediate or low skills.

The global digital economy will grow to 190 million jobs in 2025

Fortunately, we know where the key skills opportunities are. We have projections that the global digital economy will grow from 66 million jobs today to 190 million by 2025, and we know that these jobs are likely to be disproportionately concentrated in data analysis, artificial intelligence and machine learning, big data, digital marketing and strategy, and process automation. We know that demand will continue decreasing for workers in food service, customer service, agriculture, and office support roles.

Unlocking the economic and human potential contained in these domains is first and foremost an upskilling and reskilling challenge. It is also a challenge that cannot fully be combated through traditional degrees, offered to 18-22-year-olds. Because so many workers are currently either in roles whose viability is declining, or who do not yet possess the full skill set required to thrive in a digital role, governments must also be willing to collaborate with businesses and other facilitating partners to offer role-based, flexible, accessible, non-traditional forms of education. Distance learning, in particular, offers both the platform characteristics required to upskill and reskill workers at unprecedented speed and scale, and to target those who cannot take time out of work to undertake a traditional degree.

A world-leading skills framework is needed

To prepare the United Kingdom for the scale of digital transformation needed requires an ambitious, world-leading skills framework. This framework must be evidence-based, and carefully-tailored to both the high-growth areas of the labour market, and to the most urgent skills shortages. It must make use of non-traditional delivery modes to offer adequate scale, and to reach non-traditional learners. Finally, it must be collaborative, recognising that businesses, governments, institutions, and other educational providers can do much more together than in isolation.

A strategy that manages to unite these factors can help to ensure that UK skills proficiency reaches a level comparable to its entrepreneurial energy and research power, and to help cultivate the global tech superpower that the government craves.

This piece was written and provided by Anthony Tattersall, Vice-President for EMEA, Coursera.