In 2003, the UK’s IT and Telecoms industries produced an annual Gross Value Added (GVA)) of £51.2 billion, which is over 5% of the total UK economy.

IT intensive industries represent 45% of the total UK GVA.

There are approximately 123,000 enterprises within the IT industry with an annual turnover of £57,175 million.  Businesses are predominantly small with an average size of 5 people.

Major employers of IT professionals outside the IT industry include:

• Manufacturing (118,000 employees)
• Financial intermediation (110,000)
• Public administration and defence (81,000)
• Transport storage and communication (71,000)
• Other business activities (63,000)

Source: e-skills UK/Gartner Consulting 2004 and Data supplied by e-skills UK 2006

Keywords

GVA - Gross value added is the difference between the value of goods and services produced and the cost of raw materials and other inputs which are used up in production.

Source: e-skills Bulletin 2005 (issue 14 - Q3).  Based on Labour Force Survey.

For more detailed information on employment in IT and Telecoms see:

The application of, and dependence on, IT has been ubiquitous in the UK, with a high proportion of people in employment using IT at work.  It is a customer services orientated sector offering support for both hardware and software, and the design, implementation and maintenance of systems. Some industries are more IT-intensive than others.  The IT industry is driven by services such as consulting and outsourcing (the transfer of IT functions to an external service provider) which is expected to grow between 2.2% and 3.5% per annum over the next decade.

The UK is a competitive world leader in IT, but in terms of businesses’ use of IT, it is behind the USA, Germany and Sweden. 

The importance of IT in the UK is represented by the fact that 60% of all IT professionals working in the UK are employed in business sectors other than IT.

Sources: e-skills UK website 2005, e-skills regional reports 2005a, e-skills UK/Gartner Consulting 2004 and e-skills UK 2004a

For statistics on the IT labour market and the sub-sectors in the sector see:

Current hard-to-fill vacancies are concentrated in areas such as business analysts, web support, IT architects and IT security specialists. In Great Britain, 34% of establishments were having difficulties filling vacancies for IT professionals. Hard-to-fill vacancies were for web-support staff and technicians/engineers. Around 1% of all UK business sites have difficulties recruiting IT staff.

12% of IT and Telecoms firms have vacancies and this equates to 25,564 vacant jobs. 4% of establishments in this sector report hard-to-fill vacancies and 3% are facing skill shortage vacancies. Overall, fewer IT and Telecoms establishments have vacancies (both hard-to-fill and skill shortage) compared to the figures for England. Telecoms companies are more likely to have vacancies than IT firms.

Larger employers (those with more than 200 employees) are more likely to report current, hard-to-fill and skill shortage vacancies.

• 57% of the largest firms report a current vacancy, compared to 10% of the smallest employers (less than 25 employees)
• 17% of the largest firms have a hard-to-fill vacancy, compared to 4% of the smallest
• 12% of the largest firms have a skill shortage vacancy compared to 3% of the smallest

Recent data indicates that 70% of advertisements for ICT jobs were for new jobs and not replacement positions. Of these, 67% were the result of expanding businesses.

Source: ICT Inquiry (quarter 3) 2006, e-skills UK/Gartner Consulting 2004, e-skills UK 2004a, e-skills UK 2004c and IER/IFF Research Ltd. 2004

For data on requirements and replacement demand in the IT and Telecoms sector see:

Research shows that investment in computers and software by firms, ICT and internet use by employees, and e-commerce activity, are associated with higher value added per worker. The development of existing skills is essential to increase productivity in the UK industry.  Employers believe that their employees require additional IT skills.

Skills shortages (where applicants do not have the required skills, experience or qualification) are thought to be the biggest constraint on the growth and development of the sector.

Future skills shortages are expected to be in systems integration, networking and business analysis. There is an increasing need for networking specialists and demands for individuals with systems integration competencies. Specific skills demands for IT professionals include:

• business analysis
• networking
• systems integration
• web support
• IT architecture design and implementation
• security
• project and programme management
• management and leadership
• management of outsourcing (supply and demand side)

Future skill needs will be driven by the growth in the electronic communications network, mobile computing and the speed of work processes.

Employers are in great need of high-skilled IT and broadband-related skills, combined with broader business skills, and there is a strong demand for IT professionals with expertise in specialised telecommunications technologies (especially wireless networks and radio frequency engineers). Project management, IT architecture skills and solution analyst skills are in short supply. These skills will continue to be essential in the future.  Emerging skill requirements for IT professionals include:

•  increasing awareness of business environments
• increasing awareness of social sciences
• application of information analysis and its taxonomy
• applications of ethics and interpretation of legal aspects
• complex programme and applications portfolio management
• establishing and managing new models of IT governance, with increasingly international, devolved and outsourced characteristics

Source: e-skills UK regional reports 2005a, e-skills UK 2005b, e-skills UK/Gartner Consulting 2004 and e-skills UK 2004b

For more information on current skills gaps and forecasts go to the ICT Inquiry produced by e-skills UK. 

For suggested methods of addressing these shortages and developing the IT workforce see:

At present, the IT sector is expected to continue increasing at a rapid rate driven by e-business, e-government, e-learning and extensive electronic communication networks. There is a predicted trend for IT to become more ubiquitous in the future.

Future demand for IT skills will be shaped by emerging trends including:

• new channel strategies such as new ways of working and businesses being equipped with internet, telephone support and other forms of virtual service
• remote and collaborative working
• standardisation of existing technologies and common software packages
• outsourcing of IT functions to IT services suppliers and geo-sourcing  of certain types of work to Europe and international countries
• infoglut moderation (which is the development of new approaches to manage the huge volumes of data created)
• privacy and security, which will remain a high priority as concerns are growing
• the social impact of computing, which has implications for the way technology is developed and used
• internet generation workforce brought up with the internet, computer games and mobile telephones will be entering the workforce from 2007 bringing new skills and demands

The role of IT professionals is predicted to change significantly over the next ten years to encompass business, interpersonal and project skills. IT professionals will have to develop expertise in: systems integration; networking; and security.

Future issues facing ICT departments included: staff skills; finance/budgets; security/spam; network development and maintenance; finding new businesses/sales; keeping up-to-date with technology; and meeting deadlines/time management.

Source: ICT Inquiry (quarter 3) 2006, e-skills UK regional reports 2005a and e-skills UK/Gartner Consulting 2004