The North of England has long been a prosperous region for technology. But in the past few years this has accelerated, with big businesses such as Autotrader and Rentalcars.com thriving here and the likes of Missguided setting up shop and becoming an international brand.
Bet365 and Sainsbury's have taken note too, having recently placed development teams in Manchester. The digital sector in the North really feels like it's on the cusp of something great.
Despite this, the industry is facing some uncertainty. Less than a year in, publicly-funded Tech North has seen a shakeup of its senior management team and many still have reservations around the Northern Powerhouse initiative becoming a reality.
In addition, the government continues to use education as a political football by making ill thought out changes to the education curriculum that won't deliver the critical thinking, problem solving workforce of the future.
The size of the skills issue right now
The ONS's latest Annual Business Survey revealed that over 50,000 people work in digital jobs in Greater Manchester alone. In addition, the region's policy think tank, The New Economy, predicts that an additional 22,000 tech jobs will be created in the region by 2035. However, our recent digital skills audit would suggest it is likely to be closer to 30,000. The jobs are there, and businesses in the region are crying out for talent to fill them but the skills shortage is stymying the development of the industry.
In our skills audit we found that a sizeable 37% of our members have turned away work in the last 12 months as a result of not having enough resource to deliver it. An additional 1 in 4 said they'd had to outsource work outside of the EU as they couldn't find the talent to fulfil it in the UK. Disappointing but unsurprising stats, given the feedback we get from businesses on an almost daily basis.
This severe skills gap is one of the reasons we run our annual Digital Skills Festival in Manchester; not only to help shine a light on the issue, but also to help students in the North understand the career opportunities that are available to them and to connect them with employers, in the hope they will find their first job.
At the event last month, we spoke to a number of big brands about their views on the digital skills gap, particularly in the North. We also asked students and education providers for their thoughts around this challenge. Their responses varied, but they all agreed on one thing: the skills gap is having a negative impact on them, or on their business.
University students are struggling to secure part-time work to build their skills whilst they study. Big name brands are attending recruitment events for the first time in a desperate search for skilled staff. And that's not to mention others that are having to recruit offshore because they can't build teams in-house. The skills gap is a challenge for everyone involved in the North's booming tech sector, and now we must pull together to find a solution.
What Northern businesses are saying...
Sam Barton, head of user experience at Shop Direct Group, said: "As a business based in the North West, the gap in digital skills has meant we often have to work with a number of off-shore companies to supplement internal skills, particularly in e-commerce and development.
"We believe in developing in house teams to provide continuity and drive innovation, but because of the pace of change and the rapid evolution of the types of skills we need, we are working closely with universities to ensure they reflect and keep pace with the needs of the industry - from computer science and analytics through to app coding and front end development - we need more talent with these skills."
Tina Patel, HR Manager at fashion brand Missguided, said: "The issue of digital skills is at a grassroots level, there just aren't enough people with a computer science background - you don't necessarily need a degree, you just need the skills.
"This is Missguided's first year of making a conscious effort to exhibit and attend conferences, as we are increasingly feeling the effects of the digital skills gap in the North."
Christine Bellamy, head of business operations at BBC Digital, said: "At the BBC, we attend events like the Digital Skills Festival as a way to engage with upcoming talent and make them aware of the exciting career opportunities available within BBC Digital.
"Our Digital Media Graduate Scheme creates a talent pipeline of skilled software developers and engineers for the organisation. Developing talent is key for BBC Digital: we are keen to do all that we can to plug the digital skills gap for both our business and the region as a whole."
Thoughts from the education sector
We also spoke to students and education providers, to gain a different perspective on the skills gap. While it's easy to list the effects the skills gap is having on our businesses, how is it affecting education providers? Are they coping with the pressures of bringing more talent to the table? And is this pressure having an impact on students before they've even got a foot on the ladder in the industry?
Dr. Robin Johnson, course director of digital apprenticeships at Manchester Met University, said: "At Manchester Met University, we are finding that a lot of young people aren't aware of the opportunities available to them because the courses covered in schools and colleges are so light on IT. Events like the annual Digital Skills Festival are a big eye-opener for them, which is why we encourage our students to attend every year."
Kris Pinter, web development student at Manchester Met University, said:
"As a web development student in the North, finding a full-time job isn't a problem, it's part-time work when you're still studying that is hard to come by.
"Universities are supportive of digital students; bringing in guest lecturers and having portfolio show days, but more needs to be done - more interaction with the industry and more opportunities to network and create relationships would be really helpful to us as students."
Clearly the digital skills gap is having a serious impact on people and businesses at all levels but how do we go about solving it?
Sustained investment in skills
Our recent skills audit proved that businesses are indeed bringing in fresh talent (80% have taken on graduates and 69% have created graduate schemes) but there still aren't enough good quality apprenticeships and work placement opportunities.
The government is encouraging businesses to take on apprentices to help close the skills gap but schemes that were lucrative for training providers led to a prevalence of low quality schemes. This, coupled with a lack of talent entering into apprenticeships, has put some businesses off them. Many smaller companies don't feel they have the resource or expertise to manage an apprentice and still see it as a bureaucratic process.
The most effective but long term solution to developing a workforce of the size and quality required is to work with education providers and policy makers. However, if we want to effect faster change it is up to industry to take some responsibility and take control.
Digital businesses need to work directly with the education system and be able to input into the curriculum. It's not just about coding - which schools are slowly but surely incorporating into their lessons - we need to educate students about the different career options in the digital industry. It is also key that lessons are interesting and inspiring; the current computing GCSE could be much more engaging than it is. There are points throughout the education system where participation in digital and tech drops, this is particularly noticeable in 12/13-year-old girls. Clearly there's more work to be done to ensure students are engaged with digital in the long-term and to ensure better gender representation.
What now?
Collaboratively industry, education and government all have a job to do to support and develop the talent coming out of the great schools, universities and colleges in the region. Emerging talent will provide the backbone for the growth of the North's digital sector, and we must remember that and give the North the best chance of succeeding in its tech ambitions.
