A NUMBER OF FACTORS ARE CONTRIBUTING TO A ‘PERFECT STORM’ SKILLS SHORTAGE
The UK is recognised as one of the leaders in new technology, with more than 1.5m people working in the digital technology sector. It has the innovation, the infrastructure, a culture and a language shared around the world and is an attractive place to create a tech start-up. The Prime Minister has pledged to support the digital tech sector as part of the government’s modern industrial strategy. In a foreword to The Third Nation Tech Report 2017, the PM wrote “Through close co-operation between government and our tech industry, we will help to ensure that Britain remains one of the most competitive places in the world to start and grow a tech business”. In addition to increased funding for areas such as artificial intelligence (AI), robotics, 5G and smart energy, there are plans to create new Institutes of Technology, and reinvigorate STEM and digital education. Along with the Patent box, R&D credits and low corporation tax, the UK is an incredibly attractive proposition for business – on paper.
Unfortunately the government’s outdated, short sighted and ‘one size fits all’ attitude to immigration is essentially cutting off UK technology PLC at the knees. To use an analogy, the government has ensured a rich, fertile soil around the roots and planted the tree, but without water, there can be no growth. The water is the people.
The technology skills gap is shifting from dangerous to critical, as a whole range of companies move from start up to scale up status. The recent injection of funding / investment into deep tech and platform start-ups / SMEs is in large part targeted at growth. Without an efficient and welcoming migration system, there will be less people to do more jobs, as opposed to a healthily expanding workforce.
THE POST-BREXIT LANDSCAPE
Since the referendum to leave the EU in June 2016, IC Resources has seen a 50% drop in European applications into the UK. There has also been a significant increase in the number of Europeans living in the UK moving, or planning to move, back to mainland Europe.
After Brexit, the UK went from being the default place to set up a new company to being one of four or five locations to consider. Other countries, in particular France, are aware of this fact. President Macron is encouraging start-ups and technology hubs, and Berlin is now a serious contender when considering software start-ups or satellite offices. One of the main reasons for this ‘transfer of power’ is the EU Blue Card visa scheme.
THE EU BLUE CARD
The Blue Card scheme is designed to help combat the shortage of skilled workers. It grants a stay in the EU to highly-qualified non-EU-state members. The format is the same in all EU countries, with the German Blue Card a vital tool for technology companies. Even simple knowledge of the German language is not required for spouses of Blue Card applicants and relatives of card holders ‘can work immediately and without limits in Germany’.
The following quote appears on the front page of the EU Blue Card website:
“Labour migration into Europe boosts our competitiveness and therefore our economic growth. It also helps tackle demographic problems resulting from our ageing population.”
There is more wisdom in those two lines than there sometimes seems to be in the entire Home Office… someone needs to help UK technology companies address the £63 billion lost every year to unfilled vacancies.
Speaking from experience, we had a UK SME client who had identified an engineer with genuinely world-leading skills. When all the legal and visa costs were added up, it was going to cost circa £14,000 pounds to get that one person working in the UK. Part of the cost was down to the individual having two children. Compare that to the EU Blue Card scheme and you see how the UK is losing out, day in, day out.
Another interesting model is Australia. Australia creates a list of skill shortage areas and proactively targets these professions and offer incentives to work in the country. There are a whole range of skills sets in the UK technology sector, from IC design and verification through hardware, firmware and software development, where the shortage of skills could easily be classified as critical.
THE HOME OFFICE IS HURTING HMRC
In the period December 2017 to March 2018, 1600 visa applications for IT and technical staff were turned down by the Home Office. This is not for low cost jobs which could be filled by a UK citizen – these are new jobs created by a healthy technology community which wants to grow quickly and where the unemployment rate is essentially zero – in fact, negative. So every time an applicant is turned down, UK competitiveness suffers, and tax revenue for HMRC is lost. By changing the visa system, the government would simultaneously release innovation and expand its purse….not to mention winning a whole tranche of votes from the >1 million UK citizens in the technology sector!
A PR CAMPAIGN FOR UK TECH PLC
Leaving aside the visa question, one thing the UK technology community can do is to work to overcome the negative impact that Brexit has had on attitudes in Europe. Many people who are geographically flexible in Europe (often young engineers / developers graduating or leaving their first job) now immediately associate the UK with immigration barriers. A unified PR campaign extolling the virtues of living in the UK and reminding Europe of its creative energy would be a good first step to reversing the downward trend in applications to the UK.
Investing in UK pavilions at European and international technology conferences would be a good first ‘front line’ step in banging the drum of UK Tech.……………………………………………………………………………………………
THE LAST PIECE OF THE PUZZLE
UK technology firms are in a position to be the primary driver of the UK economy for at least a generation. It now behoves all of us – the technology community and the government – to ensure a pipeline of people who will convert that amazing potential into kinetic energy.