Steven Bostock
My name’s Steven Bostock, I’m a Partner in the Immigration Group at Mishcon de Reya and I’ll be your host today. At today’s Mishcon Academy Digital Session we will be considering the challenges to and the opportunities for the UK Tech Sector, focusing on the UK Tech talent deficit. I would like to first of all introduce Aveek Bhattacharya, who’s Chief Economist and Lead Researcher on Education Policy at The Social Market Foundation. We’re also joined by Sherry Coutu, a serial entrepreneur, angel investor and board member of various companies, charities and Universities, including Workfinder, The ScaleUp Institute and the University of Cambridge and finally, Dr Simon Hepworth who is Director of Enterprise at Imperial College London.
And Sherry, if you wouldn’t mind if I put this first question to you? Really, just kind of getting the… everyone and the audience comfortable with the idea of a tech talent deficit in the UK. I mean, do you think one exists and if it does, what are the causes and the extent?
Sherry Coutu
I definitely think that one exists and it exists across all sectors and it affects all companies. When we survey the CEOs of the fast-growing companies that are growing at 10, 20, 30% per annum, it is one of the top five issues that they can’t hire people with the appropriate tech skills in order to fulfil their customer orders and this affects about 85% of them as their number one but it affects all of them in their top five. If you think about large companies and you might turn to the CBI for their data, it is listed as the number one issue affecting competitive advantage in the UK for the large companies and small companies as well and that means that the companies face a burden when they’re onboarding new people of having to upskill them rapidly because they don’t have the skills that they need to get to work. So, one of the things that we can do is we can import people who have that skillset. That doesn’t do much for your inventory of domestic talent but it does allow the fast-growing companies and the larger companies to be able to get access to that. So, it does exist. It is acute. It’s chronic and it’s acute and it’s getting worse. The reason it’s getting worse is because the industries reconfiguring themselves and the technological changes and the changes in our competitors are also changing.
Steven Bostock
How did we get to this position? You know, the Government’s constantly talking about tech and the fourth industrial revolution. There’s lots of international competition. How has this been allowed to happen?
Sherry Coutu
Well, it’s happening in many countries because of the rate that the economies are changing. So, it’s not unique to the United Kingdom. You know, it’s on many people’s agendas but it’s very hard to adjust swings of 8000% over a three-year period that you have seen huge increases in short, stackable courses so that you could relieve this friction. The recommendations we made at the Kalifa Review and also the ScaleUp Institute was, allow us to import people really, really easily and then Universities should be making sure that they’re aligned with the fast-growing companies, in particular – another response you’ve seen is around internships, part-time work when you’re at University and also apprentices. I think we should see a lot more of that.
Steven Bostock
It kind of brings us onto an interesting question for you, I think, which is in relation to the STEM subjects you know, science, technology, engineering, mathematics. What school-age education policies are the Government actually implementing to increase the flow of talent into these specific sectors that would probably have enormous benefit on tech in the future?
Aveek Bhattacharya
Yeah, I mean I think it is recognised as an issue that the Government wants to work on, it clearly is. At cost to other subjects it’s been prioritised and there’s a recognition that it is hard for University colleges to kind of catch students up if they don’t have the basic grounding that you need to be able to go onto degree or even sub-degree level qualifications. So, there have been some initiatives for example there’s been a big focus on recruiting and retaining highly qualified maths and physics teachers in particular. But one area that I think’s going to be particularly important and this is across the piece but STEM’s a particularly, kind of important part of it is, I think there’s a recognition in a whole range of things I’ve looked at on education that careers advice and guidance isn’t often as good as it could be.
Steven Bostock
Simon, I think that kind of moves on quite neatly to your area of expertise as well. I mean, I wonder if you know roughly what the current UK population undertaking STEM degrees is and you know, what the Government might want to do to try to increase this?
Simon Hepworth
So, the data I looked at said it was about 47% were going into STEM subjects and what I can’t tell you is how competitive that is on a, on a global landscape but it’s… the numbers seem pretty good to me. We need to make STEM as attractive as possible. So, I think that goes right back to the role models side of that and so, having young people aspire to great people working in STEM. I think some of it is changing the perception that an engineer is not just somebody that fixes your car but actually they’re working on fantastic science projects, like going to Mars for example. Scholarships are always great to just reduce the barriers for people entering into STEM.
Steven Bostock
I mean, a 47% figure seems quite high actually, which is good to hear. What percentage roughly, or do you know how successful we are at converting them into work in their specialist field?
Sherry Coutu
The data was from Pearson and in their study it’s less than 50% of people end up working in the same area where their degree is, is at the moment. So, it’s a global learning study.
Steven Bostock
And I think that chimes with the Royal Academy of Engineering report from a couple of years’ back that said the same thing. But actually, a glass half full, I actually thought about half going through was probably quite good given that people got huge choice about what careers they want to do.
Sherry Coutu
Yeah well, and I think if careers are changing out of all recognition as well that it’s very hard to sort of say, “Well, I’m going to be an engineer”, whatever that means, when what that means is changing very, very rapidly. So, I’m not surprised about the criticism around careers advice, I think it would be anybody who’s in careers advice would be having a hard time at the moment. I think it’s more about equipping young people to navigate an uncertain future that we, as educators at University should probably be thinking, thinking about and accept that it’s okay if you studied this subject, don’t expect to be in it forever because nobody’s ever in anything forever any longer.
Aveek Bhattacharya
There’s arguments, arguably, that there’s over-specialisation at 16 but at 18 it’s very unusual for someone not to go down one path or the other and that seems, given especially what Sherry was saying about the long kind of life that people have stretching out in front of them, that seems potentially counter-productive.
Steven Bostock
We talked about it briefly before but it would be interesting to get your thoughts in a bit more detail on what these barriers are, you know, to re-training and upskilling the UK workforce specifically. Is there anything unique to Brits or is it a global issue that other countries are having as well?
Sherry Coutu
I think the single most important thing that we can do is get students in University right now doing work experience. You learn by making. We don’t just learn by studying in books, we know that. We learn by making things and doing things. So, working on projects in real tech companies alongside your degrees is perfect.
Steven Bostock
Aveek, just to bring you in on this as well, I wonder if you have any thoughts on what the Government could do you know, to help incentivise the retraining of the workforce possibly even financially. You know, is that something that you think would be a sensible idea?
Aveek Bhattacharya
There’s a vision starting to emerge which is moving away from this very linear model of you, you do your education and training from 18 to 20 and then you go into work and then that’s you done for the next six years and what Sherry is suggesting is we break that up. We have work interspersed with, with learning and then the learning coming back later through your life. It seems to me that’s the only way we can respond to the kind of fast-moving tech world, the fact that your skills are going to develop but you don’t know what skills you’re going to need when you’re 30 or 40. In the last decade, adult education funding has been halved. There’s £1.3 billion less going into adult education than there was in about 2010.
Steven Bostock
What are the risks to the UK tech industry if this doesn’t get resolved in the next year, in the next five years? How do we see this kind of playing out over the next few years? Sherry do you want to give us your thoughts on that?
Sherry Coutu
Businesses will go elsewhere and their tax dollars will go elsewhere and the lessons to be learnt by the people who would be at the Universities doing part-time work at these companies you know, will also… it just won’t happen. So, I think it, it’s a crisis and I think it’s the worst crisis that we could face.
Steven Bostock
Simon, have you got any thoughts on that?
Simon Hepworth
Yeah, to do the best science we need to attract the brightest talent from around the world and we do that today because it’s a great place to be; because we’re creative. If we lose some of that, the attraction goes, then our quality standards in education I think will also fall.
Steven Bostock
And Aveek, your thoughts?
Aveek Bhattacharya
One thing that is worth watching kind of post-pandemic is, we’ve seen a lot of people working remotely; there is an open question about how far that is going to be international. So, it isn’t, even if we have a British-based business, there is no requirement for them if they can employ people in other countries that have the skills.
Steven Bostock
The Government’s Levelling Up agenda, you know, which we heard so much about in 2019, it’s starting to come back and it seems to people of Hartlepool bought into the idea. But Sherry, what role do you think the tech sector can play in this in accelerating regional, economic and social recovery across the company?
Sherry Coutu
Well, I think it’s a joint, it’s a joint role between the companies and the Universities in every town up and down the UK. I don’t think you should have to leave where you live either to go to University or to work. I’m in favour of the Levelling Up agenda and I think it’s easier with the use of Zoom because we can access people from wherever.
Steven Bostock
Aveek from your perspective, you know, what tech industry policies can the Government bring in to help on this Levelling Up agenda?
Aveek Bhattacharya
There’s a real risk of if this is done cack-handedly or brute forced rather than developing organically. We can think of lots of examples already, I think, of tech firms more or less broadly construed that do kind of have a clear kind of link to a place and often places that are not the most glamourous. So, I’m from the north-east of Scotland; I’m from Aberdeen. But just down the coast in Dundee, we have a world-leading video games industry. I think a lot of this is about networking and facilitating kind of getting the right people in the room together so that the skills kind of lead through to the businesses. I think that this is kind of an important issue for Universities and tech companies, both of whom are in danger of being seen politically as a bit ruthless. So, there could be kind of huge PR and political kind of benefits of being seen to be good citizens in this regard and hopefully, I think there is, there is an equilibrium that is good for everyone.
Steven Bostock
You’ve kind of got, you know, central Government trying to plan how the economy develops, certainly on the tech side. I mean, do you think that’s helpful? Is there a place for this being centrally managed or is it best to leave it to the private sector?
Simon Hepworth
I think it’s an extremely complex thing to try and centrally manage so I wouldn’t envy anybody that had that job. So, I would be more in favour of supporting groups locally to be better versions of themselves. I think Universities can be great seeds of that; great beacons for entrepreneurship locally but I think it’s a long and hard journey. I think it’s five to ten years to really build any kind of cluster around them.
Steven Bostock
And so one last question, I think we’ve just got time for and this is to you all really. The UK is really kind of putting itself out there as this is where we want to see the economy growing over the next few years and beyond. Who are we competing with? Are we competing globally? You know, is there a local competitive market in Western Europe? Are we competing with California? Are we competing with China for this tech investment and flow of people? You know, who are our main competition and maybe what could we learn from those that are clearly doing it better given where we are on the list?
Aveek Bhattacharya
This isn’t necessarily about beating other countries. This is about equipping our country with the skills that it needs in order to be able to succeed and prosper and thrive or even to just take advantage of the innovations that are happening in other countries. So, the UK, it’ll vary from sector to sector to sector but in lots of industries the UK is not at the kind of frontier of innovation. But just to take kind of… and in some ways, that’s a good position to be. If you look at what’s happened in China and Korea over the 20th Century, the reason they were able to grow so quickly was because they could catch up. But even if you’re going to catch up with the countries of the frontier you kind of need to have the skills to be able to translate that.
Sherry Coutu
And I think I look at it as removing the friction for a business leader who is operating in the UK and in other places. If it’s harder for them to find the talent that they need here and they also operate by their own free choice in a number of other jurisdictions, then if it's easier elsewhere, they will do it elsewhere because they have a need, they have a need to do that. In other jurisdictions the employers are absolutely reporting that they can get what they want from those systems more easily than ours and that’s what we keep on hearing.
Steven Bostock
Absolutely. Simon, closing thoughts on that? We’ve got about 30 seconds. I don’t know if you have any thoughts..?
Simon Hepworth
Deep science, deep technology in the University setting it is absolutely a global competition. So, our competitors are the MITs, the Stanfords, the Harvards of this world, in addition to Oxford, Cambridge in the UK.
Steven Bostock
Well, thanks for that and thanks everyone, that’s all we have time for today unfortunately. Enjoy the afternoon. Enjoy the sunshine, hopefully and see you in our next session. Take care. Thank you.
Sherry Coutu
Thanks a lot. Take care everyone.
The Mishcon Academy Digital Sessions. To access advice for businesses that is regularly updated, please visit mishcon.com.