European e-skills week

Thank you for the introduction.

I’m delighted to be here and to welcome you all to the Department for Business, Innovation and Skills, and to the UK inaugural event of Europe’s e-skills week. I welcome this initiative to highlight the growing need for skilled ICT users and professionals – I think the European Union is absolutely right to prioritise this as a key area for the European economy. And I welcome the work of Intellect as the UK’s lead partner spearheading this campaign.

This is right at the heart of the UK’s future economic success, key to the Going for Growth strategy Peter Mandelson set out in January. And, of course, its vital for the responsibility I have: to deliver the aims of the Digital Britain white paper we published last June – a major element in our new strategy to build growth as we recover from the worst downturn in the world economy for 70 years.

It is today a near universal requirement for work to have at least a basic level of IT skills. As we come out of recession, growth in the UK economy will primarily be in high value goods and services whose provision demands digital skills and increasingly sophisticated competencies. Technology products have become essentials. When I became the Minister responsible for broadband for the first time in 2002, it was very hard to believe that we would – as we did within seven years, in 2009 – have 70% of UK households with internet access. The speed of change has been extraordinary and impressive – reflecting great credit on many of the organisations represented at this event.

HMG support for ICT

ICT is an exceptionally vibrant area for innovation, with new forms and new ways of working being developed all the time. It is an important sector of the UK economy in its own right. But it is also an enabler, providing other sectors with their competitive edge, enabling all the other parts of the UK economy to do well. That is a key part of the rationale for our strong support for the development of ICT, set out in the Digital Britain report.

We want our information sector equipped to compete and win in the new global economy, securing the UK’s position as a world leading digital knowledge economy. We know that the economy will look very different over the next decade.

The UK has great strengths in IT: R&D; business solutions capability; technology innovation; internet exploitation; mobile communications; and learning technologies. The UK is already home to Europe’s largest ICT industry, employing more than one million people and contributing 8% of UK GDP.

But we are not complacent – If we are to be successful we know we have to work hard to ensure the UK has the best environment it can for creating and growing businesses.

And that means ensuring the supply of world-class talent.

Digital Skills

Providing high quality professionals who can build and maintain digital Britain means equipping the workforce with both high-level, hard, digital skills and with other business skills – like being able to spot the commercial potential in an innovation.

The IT professional workforce in the UK has more than doubled since the early 1990s to now well over one million. In the short-term technology companies are facing the pressures common to the whole economy, but, looking just a little further ahead, strong growth is forecast to continue. The IT workforce is predicted to grow at four times this rate.

Higher Ambitions, launched last year, sets out the direction for higher education over the next decade. It seeks to encourage Higher Education Institutions, employers, Sector Skills Councils and sectoral experts to collaborate to focus customer demand and accelerate the response from universities to meet that demand. A Chief Executive from one of our leading IT companies was telling me last week how hard his company finds it to influence university course content. We need higher education to be more responsive.

The Foundation Degree (FD) is a prime example of HE-employer collaboration on HE qualifications, with the courses being designed with employers to meet specific workplace needs. Sector Skills Councils and professional bodies are also involved. Foundation Degrees have been growing quickly. Many are being delivered through joint arrangements between higher and further education. There are 255 IT Foundation degree courses running.

The ICT Foundation degree framework, launched recently, was developed to meet changing needs in the ICT sector. It sets out a fuller understanding of the sector; learner requirements for up-skilling and preferred delivery methodology. The framework will enable Apprentices to progress their workplace learning. And one of the key strengths of the foundation degree is in providing a pathway into higher education to able people who chose an apprenticeship to further their education, rather than A-levels.

The ITMB (Information Technology Management for Business) Degree Framework has also been developed by a consortium of universities and e-skills UK in partnership with leading employers. Rather than focus purely on technical skills, the framework recognises the importance of business, project management, and personal skills as well.

It provides graduates with specific skills employers see as essential, and the tools to excel in and lead the industry in the future. The first tranche of ITMB graduates is just now starting to enter the workforce.

The UK Higher Education sector produces world-class graduates in the disciplines which underpin a digital Britain. But we need more of them. There are problems getting graduates with the desired mix of skills. Student demand for computing courses has fluctuated. There was a steep rise in demand and provision through the 1990s, followed by an equally steep fall in the first half of the present decade.

Since 2006 numbers have levelled off. Entrants to Computer science courses were up 7% last year – welcome news, reflecting serious effort by those involved. And there is encouraging data from other science and maths courses too.

But we need to continue promoting the sector as an area with good opportunities for those with the right aptitudes.

The impressive economic performance which is our aim requires world class capability in the ‘hard’ subjects that underpin technological innovation. Future growth of the digital sectors depends in no small measure on having the right people with the right skills.

So we are supporting not just new entrants into the industry, and also putting in place the processes to raise the skill levels of the current workforce.

We are investing in development of a National Skills Academy for IT, which will be launched later this year. It will provide services for employers and IT professionals – people working of course in the IT and telecoms industry, but also those working in sectors where IT is essential for business success. And these days that’s most of them!

The National Skills Academy is being crucially influenced by employers in the sector, including BT, IBM, Logica and Microsoft, as well as British Airways, Sainsbury’s, Vodafone and Whitbread. Our aim is that it will ensure that business gets exactly the skills that they need. We see the Academy playing a vital role in the more responsive Higher Education system we are aiming for.

We also announced in Skills for Growth a pilot of a Joint Investment Programme (worth £50 million) from autumn 2010. The programme will involve a small number of Sector Skills Councils and Industry Training Boards in sectors key to economic recovery such as the digital sectors, at skilled technician and associate professional levels. This will match employer investment with government funding.

We are also committed to using our role as a very large procurer of IT services to address skills issues in the IT sector. We currently spend £14 billion a year on IT contracts. In December we announced that IT companies wanting to work with the Government will need to make sure their employees have access to the right training and skills. Suppliers doing business with the public sector will need to commit to using the Skills Framework for the Information Age or one of its equivalents, so that both Government and suppliers are speaking the same language about skills and can therefore ensure that projects deliver maximum value for money.

There’s one other point to make. I’ve mentioned the UK’s strength in learning technologies. So much so, that the Prime Minister recently asked David Puttnam to look into the export opportunities for educational technology. His initial report will be ready for the summer.

Our higher and further education systems increasingly use online learning, appreciating its impact, flexibility and access. Businesses too understand this. 40% of employers have increased their e-learning in the last two – economically difficult – years, when there is a temptation to cut training back. But look at the results. Sky saved £700K and doubled its staff retention. And Xerox saved over £5m by setting up 300 virtual classrooms. We need to see more of that kind of success.

At the start, I said how important this subject is. 21 million people in the UK use IT in their daily work. We are all, citizens and businesses, dependent on technology. Do please take the opportunity today to get involved in the discussion.

Now, I think I’m presenting an award which Margaret Sambell of e-Skills UK and Craig Martin of DediPower Hosting will tell us about …

Award Presentation

It is always a pleasure to recognise and see business ideas rewarded. I understand the competition for this award was exceptionally tough and that the judging panel had a difficult time choosing its finalists. Nonetheless, the winning entry stood out for its commercial and real world application.

So I am delighted now to present the 2010 DediPower Digital Entrepreneur of the Year award, in recognition of impressive work on innovative applications for mobile devices to Stuart Varral of Fluid Pixels.

 

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