Digital Scotland’s Scotland’s Digital Technologies: Summary Report found that the sector contributed over £3.9B to the Scottish economy in 2015, with over 90,000 people employed in technical roles across the country.
Conducted throughout 2016, the report is based upon research presented by the Digital Technologies Skills Group and their partners.
“It is a critical time for the digital economy as technology transforms the way in way in which we live, and is having an increasingly disruptive effect on business.” says the report. “The impact of this digital revolution is no longer consigned to technology companies, but across all sectors as increasing types of businesses are harnessing the benefits of technology to drive innovation and increase competitiveness.
“This means that Scotland’s digital technologies sector is in growth, and is a key contributor to our economic growth and global competitiveness across every sector in Scotland… Tech in Scotland is not only forecast to continue to grow, but is also identified as the fastest-growing sector in Scotland. As this digital revolution continues to pick up pace it is creating an unprecedented demand for skills with employers across all sectors.”
DIGITAL TECHNOLOGIES IN SCOTLAND
The first section of the report focuses on the economic importance of Scotland’s digital technologies. It reveals that the tech sector contributed £3.9B Gross Value Added (GVA) in 2015, accounting for 3% of the total GVA. In addition to this, the GVA per head for the sector is currently 60% higher than for the economy as a whole, making it a considerable contributor to Scotland’s economy. The contribution of the tech sector to GVA is fast approach that of long-established key sectors, including the business (£5.9B) and financial services sectors (£7.1B). It is also forecast to be the fastest growing sector in Scotland to 2024 in terms of GVA (38%), with the report estimating that it will grow almost twice as fast as the overall economy (17.5%).
There were approximately 8,800 tech businesses registered in Scotland in 2015, up 53% since 2010 and accounting for 5% of Scotland’s total business base. The number of tech businesses has grown almost three times as fast as businesses in general across Scotland (19%), with sub-sectors such as computer consultancy (72%) and computer programming (152%) growing “exponentially.” The majority of businesses are concentrated in key cities such as Edinburgh (25%), Glasgow (13%), and regions such as Fife (6%).
95% of the sector is constituted of micro-businesses, with one to ten employees, compared to 88% in the economy as a whole. They have an average of 7 employees per business, compared to 15 for the wider economy, which the report cites as indicative of the “Importance of the startup community.”
The sector employs over 60,000 people in all job roles, accounting for 2% of the national workforce. 60% of these are in tech roles, with 40% working other types of jobs. The number of people working in the tech sector has been relatively consistent since 2009, but there has been strong growth in both Glasgow (36%) and Edinburgh (19%). The workforce is concentrated mainly around the Central Belt, with Glasgow City (29%), the City of Edinburgh (23%), and West Lothian (9%) constituting the top three employment areas in Scotland.
More than 90,000 people are employed in Scotland’s digital technologies, representing 4% of the national workforce. 40% of these people are employed in tech businesses, with the remaining 60% employed in other sectors including finance, creative industries, energy, engineering, and healthcare. The number of tech professionals employed in non-tech sectors is growing faster than the number employed in tech businesses. According to the report, this further illustrates the demand for tech skills across all of Scotland’s industries.
People employed in the tech sector are more likely to be employed on a full-time basis (89%) than those in the overall workforce in Scotland (67%). The tech sector also has an ageing workforce, with a large proportion of workers aged 45 and above. However, the proportion of younger workers in tech roles in increasing, particularly those aged between 16 and 24.
The report found that despite the it’s strong growth, women remain underrepresented in the tech sector, accounting for just 19% of the workforce. They also account for only 18% of people employed in tech roles, which is considerably lower than in other skilled roles (39%), and the workforce as a whole (48%).
The average salary for tech jobs is approximately £37,000, which is over 30% higher than the Scottish average of £28,0000. Tech salaries are also growing at a faster rate (15-20%) than salaries across Scotland (11%).
The report estimates that Scotland has up to 12,800 tech opportunities annually, a significant proportion of which will result from replacement demand. This demonstrates a 16% increase from previous demand forecasts of 11,000 annual job opportunities.
DIGITAL TECH EDUCATION
The report also shed light onto the current state of Scotland’s computing sciences education, from high school to postgraduate level.
Examining the role of information technology in schools, it found that the number of young people studying and passing computing science increased from 2014-2016, with an 8% overall increase in passes across all levels. The level that experienced the most growth was the SCQF 3-5 (national), which saw a pass increase of 10%.
At a college level, computer science related courses are delivered by 23 colleges in Scotland, across 13 college regions. The areas with the highest proportion of enrolments are Glasgow (20%), Aberdeen and Aberdeenshire (13%), West (12%), and Edinburgh (10%). The total number of enrolments in computer science related courses has decreased by 11% since 2012/2013, predominantly at SCQF level 5 and below. The number of enrolments in college at further and higher education levels (SCQF 6-12) has remained generally stable, “representing a continued focus on study at the higher levels which employers are looking for.”
The computing science student body at colleges across Scotland is generally getting younger. The number of enrolments aged 24 and under has increased, with young people now representing 62% of total enrolments. The Number of enrolments aged 25 and over has decreased.
Males make up the greatest proportion of enrolments in computer science courses, standing at 75%. They also account for a higher proportion of computing science credits (35%), which suggests that they are more likely to opt for more intensive computing science focused courses.
In 2014/2015, 86% of computing science college graduates entered full-time study, compared with 69% across all college disciplines. 9% of computing science leavers entered direct employment, compared to an average of 14% across all disciplines. This supports the notion that employers looking for people with higher level qualifications when it comes to computing sciences.
There are currently 15 Universities that offer undergraduate computing science degrees in Scotland, and 14 that offer postgraduate qualifications. The total number of computing science enrolments has increased 20% since 2012/2013 to 15,111. Computing science provision accounted for approximately 6% of all university provision in 2014/2015, with the majority of provision (81% of enrolments) at undergraduate degree level.
Computing science students are generally younger than the overall student profile; 71% were 24 years and under compared to 64% for all university enrolments. The number of 16 to 19 year-old computing science students is also increasing faster than any other age group.
Computing science courses at university level are also male dominated, with 81% of students being male. There is a more equal gender split on “mathematical and computing science” courses, however, with males making up 58% of the student body.
In 2014/2015 there were 4381 computing sciences graduates, increasing by 5% since 2012/2013. Nearly three-quarters of these graduates moved into direct employment after graduation (71%), with 16% going onto further full-time study. 7% of graduates remained unemployed 6 months after graduation, compared to 5% of all university graduates.
Graduates that enter full-time employment move into a variety of sectors, with the most common being
- information and communication (35%)
- finance and insurance (16%)
- manufacturing (10%)
This indicates the widespread demand for computing science graduates across multiple sectors.
Graduates with computing science, technology, and mathematics degrees are the most sought after by technology employers. However, 31% of graduates in tech jobs do not have a computer science degree, and enter the sector from varied disciplines including creative arts and design, business and administration, physical sciences, maths, engineering, biological sciences, and social sciences. This illustrates the importance of transferable skills and a willingness of employers in the tech sector to recruit from a wide background of disciplines
Digital technology Modern Apprenticeships (MAs) are currently offered in five frameworks in Scotland, covering a variety of disciplines and jobs relating to:
- hardware and networking
- software development
- cyber security
- data analytics
The number of digital technology MA starts has increased by 46% in the last two years, to almost 950 starts in 2015/2016.
Digital technology apprenticeships are offered across Scotland with a high proportion of MAs in:
- Lanarkshire (21%)
- Edinburgh and Lothians (16%)
- Glasgow (16%)
- West (11%)
- Highlands & Islands (11%)
According to the report, there is an increasing appetite for tech apprentices across sectors including digital technology, financial services, creative industries, and the public sector.
EMPLOYER DEMAND FOR DIGITAL TECHNOLOGY SKILLS
51% of Scottish employers recruited tech skills in the last 12 months, with high levels in both the financial services and tech sectors. The most commonly recruited tech skills were software development & implementation and client interface, and sales & marketing. The highest demand was for individuals in experienced and technical level roles, most commonly for software development.
Employers also require a wide range of language skills, with HTML and Java still the highest in demand. A quarter of employers say they do not require individuals to have specific language skills, instead favouring the ability to learn different languages.
38% of Scottish employers currently have tech role vacancies, with an average of between one and five vacancies per employer. They use a variety of solutions to meet their recruitment needs and challenges, with a particular focus on interns and graduates. International recruitment is also being used to help fill gaps, with 37% of employers having recruited tech skills from abroad. The main drivers for this are the requirement for specialist skills and experience, and a lack of UK applications.
The biggest challenge currently facing employers is having a workforce with the right technical skills and experience. 82% of tech employers reported this as an issue, with 32% stating that it is ‘significant.’ Current skills issues exist in experienced, technical, and operational roles, and to an extent in managerial and director roles. Few employers report experiencing skills issues in recruiting for entry level roles.
79% predict that the ability to recruit people with the right technical skills or experience will be a big issue in the future, with 25% anticipating it as a significant issue. In addition, over 60% of employers feel that keeping pace with the growth of the business and not having the correct technical skills within the organisation will be an issue over the next 12 months. Over half of employers also feel that more needs to be done to provide tech skills training to their staff.