Closing the gap – Can Scotland do it in time for the tech sector’s economic boom?

Scotland’s tech sector, predicted to be the second fastest growing area of the economy over the next six years, needs a supply of skilled workers – and fast – if it is to meet demands. According to the most recent statistics by the Scottish Government, less than four out of 10 Scottish businesses feel “fully equipped” to meet the business’ digital technology needs.

“It’s really scary. Truthfully, if we don’t close the gap we will stagnate. And if we stagnate, we fall behind as an economy. We will fall behind as a country”, Fiona Burton, managing director for tech skills accelerator AND Digital tells Holyrood. 

With a report by CBI (Confederation of British Industry) Scotland revealing that the industry could bring a £25bn economic boost over the next decade, and a report by the Scottish Government predicting a £1.9bn spending cut for 2028-29, closing the gap is something the economy desperately needs.

The urgent need for recruiting a skilled workforce has inevitably had a knock-on effect on Scottish business growth. As research shows one in 10 job openings to now be in the tech sector, organisations have been left competing against each other to bring in the scarce workforce available north of the border, with those on the losing end not only facing the difficult task of recruiting staff but also of retaining them.

Talking to Holyrood, Peter Proud, chief executive of tech company Forrit, explains that the situation has left him no other option but to recruit elsewhere.

“We’ve had to hire a couple of people from South Africa and not having everyone in one place has created multiple problems,” he says. “It’s very fashionable to work from home at the moment, but when you’re building software products, nothing beats being able to get around a whiteboard now and again. 

“We’ve managed to adapt but if we could get more people quicker, it would make life much easier”.

However, the ramifications of the issue go much further than that of promoting business growth or safeguarding a stable economy. According to a report by the charity, Inspiring Scotland, as of 2020 almost two out of every 10 people in the country had no digital skills at all, with those with disabilities and those on low incomes among those most likely to lack the basic skills to exploit the range of benefits the internet can offer. It is a difference that could result in a “stark cultural divide” between the digitally literate and the digital illiterates, Burton explains.

Another survey by Lloyds Bank revealed earlier this year only around half of those aged 75 or over have  “the foundation level” of essential digital skills, which the UK Government defines as the ability to use a computer. As the digitisation of services like healthcare become the norm, failing to close the gap could put people at a cliff edge, with advancements in technology becoming a futile attempt at alleviating pressures on an overstretched NHS.

Acknowledging that the number of people aged 65 or over in Scotland is projected to grow by almost 30 per cent by mid-2045 (according to a recent report published by National Records of Scotland) Phil Ford, head of digital economy and financial services at Skills Development Scotland, says that missing the opportunity to upskill an older workforce could be an obstacle to addressing labour shortages.

“As we move forward, we will have fewer people of working age compared to an increasingly dependent population who are not working,” he says. “So, creating opportunities for young people is important, but it won’t in itself, solve the problem, right across the economy. 

“Part of that is ensuring that Scotland attracts and retains a skilled workforce. But there are also a lot of people who are, or will be, retired or economically inactive, that may want to come back into the labour market, even if that’s on a part-time or short-term basis, to use some of the skills that they have. So, there are opportunities for older workers to be part of this as well.”

It’s a point emphasised by Proud who also calls for people to “think about the value of training rather than the cost”.

Similarly, in looking to tackle the digital skills gap among Scotland’s poorer communities, a free digital skills programme was launched earlier this month across the Tay Cities Region – a geographic expanse that includes areas with deprivation levels of around 40 per cent, according to the latest publication of the Scottish Index of Multiple Deprivation. Part of the Tay Cities Region Deal, the DigiTay project, received a £1.5m fund from the Scottish Government to plug the skills gap in the digital labour market.

Speaking to Holyrood, Gordon Mole, head of business and employability at Fife Council, points out that DigiTay had helped break the stigma around the “exclusivity” of learning digital skills with some programmes centring around specific groups such as women returners. Claire, a participant in the programme said auditing her skills among females in a similar position had significantly “built her confidence”.

Mole also explains that closing the digital skills gap across remote areas will be strategic to stop the growing risk of depopulation in rural areas by creating a more nurturing digital environment and preventing trained workforces from being attracted by the economic opportunities in larger cities. The latest report by the State of Tech Salaries shows that the average tech salary in Edinburgh and Glasgow reached around £80,000 per year.

Proud, who grew up in a deprived area, highlights how opening the window of digital training opportunities in these regions could both widen the talent pool and encourage more young people to take on further education.

“The most forgotten segment of society are kids in council estates who go to poor schools in deprived areas and don’t have a lot of aspiration,” he says. “I was brought up in that scenario. And I didn’t know that the life that I’ve managed to have over the last 30 years since I started working, was available. If I knew that was available to me when I was five years old, I would have worked 10 times harder.”

Tapping into underrepresented groups is often framed as one of the best strategies to solve the skills shortage with the focal point often being trying to tackle the lack of gender balance in the industry as the proportion of women in digital technology roles remains at around 20 per cent.  Cheryl Torano, business development manager of the Abertay cyberQuarter, tells Holyrood that if the same number of women as men joined the tech sector “there would be no gap or skills shortage at all”.

The lack of appetite among women has often been traced back to their lack of encouragement as students. As of 2020, only seven per cent of female pupils took computer science at Higher level with the figure dropping to two per cent at Advanced Higher. Although progress has been made since, there is still a long way to go, with data released by UCAS earlier this years still showing that out of all the computing applications made by British 18-year-olds, fewer than 20 per cent came from women.

“We’re seeing very few CVs coming from girls from the very start of the funnel. So the problem is not how do we fix it with adults, we need to go all the way back to, five, six, seven-year olds to get them enthused about software. Because there’s something in society that seems to push girls away from going into software. And I don’t know what it is,” Proud explains.

He emphasises the “fundamental need” for Scotland to re-shape education.

“It’s all about inspiration, aspiration, education, and opportunity,” he says. “If we do not get this right, if we do not inspire people to embrace education across all parts of society, Scotland will just become a second-class nation. We need to fundamentally change the way that education is viewed in Scotland.”