Is there a digital skills crisis?

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What are digital skills?

a range of abilities to use digital devices, communication applications, and networks to access and manage information. They enable people to create and share digital content, communicate and collaborate, and solve problems for effective and creative self-fulfillment in life, learning, work, and social activities at large.

Is the UK facing a digital skills crisis?

Despite being one of the most technologically advanced nations in the world, the UK is potentially facing a digital skills crisis. As the economy rapidly changes, with an increase in the pace of technological change and rate of adoption, the digital economy is seen as critical to future growth and prosperity of the country.

Some of the requirements of a world class digital economy encompass excellent connectivity, including comprehensive access to fast broadband and improved mobile access (especially 4G and, soon, 5G) but it is the level of digital skills in the workforce (or relative lack of) which has attracted the most attention.

Failure to close the skills gap in the UK Economy:

80% of small firms face difficulty recruiting applicants with suitable skills.

Federation of Small Businesses

Over the last 20 years, the global economy has been digitising at pace, making digital skills an increasingly vital requirement for employers. The pandemic has accelerated this change at a speed that we could not have imagined.

Negative impacts experienced by knowledge workers from lack of digital skills


Didn't seek or achieve promotion


Stopped me from applying for a job


Made me apply for external training


Made me change career


Made me think of quitting


Have been turned down for jobs


Have missed pay rises


Made me leave my job

The digital skills gap is felt by the majority of knowledge workers in the UK

There are multiple dimensions to defining the digital skills gap, including what the skills gap looks like in practice, what the actual skills are as defined by hiring managers, and the concentration in particular industries and geographies. However, across the UK as a whole, 58% of knowledge workers felt the digital skills gap.

AND Digital: The nature of the UK’s digital skills gap

Recognising the role of digital skills in business productivity

The economic dislocation of the last two years due to Covid has contributed to significant changes in the UK economy. Technology has enabled new ways of working. Zoom has become ubiquitous as the new Hoover in the lexicon of individuals and companies forced to create new work-from-home protocols and procedures, but these new ways of working have managed to keep the economy going to a remarkable degree.

By some metrics, the UK economy is a tech giant. Tech investment (especially Fintech, where the UK has a particular strength) saw a record breaking year in 2021, with £29.4bn raised, higher than any annual record to date. It was more than double that of Germany, and almost three times that of France, and was second only to the US in early stage tech investment.

The UK also has more than double the number of unicorns (tech firms worth more than $1billion) than Germany, and internationally is third only to the US and China. The UK tech start up and scaleup ecosystem is valued at $585bn, more than double that of Germany.

Person typing code on a laptop

Skills and Productivity

Whilst digital skills were originally recognised within the technology sector, which was worth 7.7% of UK GDP in 2020 with a growth rate 6 times that of the rest, it has become clear during the pandemic that 'digital', and the required skills, are needed across every sector. Digital skills are now an essential entry requirement for two-thirds of UK occupations, 92% of businesses say that having basic digital skills is important for employees and 27% of employers say their workers require advanced digital skills.

Research by World Skills UK, the Learning & Work Institute and Enginuity (Disconnected: Exploring the digital skills gap) suggests that 60% of businesses believe their reliance on advanced digital skills is set to increase over the next 5 years, while 88% of young people realise that their level of digital skills will be an important driver of their careers. Three in four (76%) of businesses say that a lack of digital skills would affect the profitability of their business. They identify that advanced digital skills are important as they

  • help to grow the business

  • help to improve productivity

  • help the business innovate

There is consensus about both the need for digital skills, and their increasing importance in the future, as a driver of economic growth and productivity.

57% of techUK members think the biggest challenge they will face over the next 12 months is 'Access to talent and skilled workers'.

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A new digital skills benchmark

Back in 2017, the Department for Education, The Tech Partnership and Lloyds bank were the lead members of a new steering group of cross-industry companies created to help create a framework to benchmark what actually constitutes digital skills. Following extensive consultation with over 400 organisations, a new benchmark was agreed as being representative of both jobs and lives in the UK.

The latest Consumer Digital Index paints a complex picture

The index has found that 96% of the UK has been online in the last 3 months, up from 89% in 2016 but down from 99% in 2022. The pandemic over the last few years has been a significant catalyst for this, but, despite this, there are still some 13 million people, 25% of the UK, who still have very low digital capabilities. In addition, with inflation squeezing incomes, nearly 36% said that their ability to go online has been impacted.

Very High digital capability is not evenly spread across the UK either. London has the regional lead, at 31%, four percentage points above the UK average, followed by the North West and South East (both 28%). Wales and the North East lag behind all other regions and nations in Very Low digital capability, at 28%.

8.5 million

adults still lack the digital foundations needed for everyday life.

£442 a month

comparing individuals in similar jobs at similar levels, those with high digital capability are making up to £442 a month more in 2022.


of people are now online, up from 89% in 2016
* engaged with the internet in the last 3 months

UK digital capability, 2022

Very Low

Very Low

25% / 13 million
Almost half earn less than £20,000 a year



10% / 5.2 million
Fewer than 40% earn less than £20,000 a year



38% / 19.8 million
Almost one third earn less than £20,000 a year

Very High

Very High

27% / 14.1 million
16% earn less than £20,000 a year

There are five categories of Essential Digital Skills for life and work

The framework, which helps inform the Lloyds Bank Consumer Digital Index, is intended to be used by everyone in the UK involved in supporting adults to improve their essential digital skills.

Find out more about the Essential digital skills framework


Communicate, interact, collaborate, share and connect with others

Handling Information & Content

Handling Information & Content

Find, manage and store digital information and content safely and securely.



Administer, manage transactions, buy and sell, register and apply online

Problem Solving

Problem Solving

Solve problems and find solutions using digital tools

Being Safe & Legal Online

Being Safe & Legal Online

Stay safe, legal and confident online using passwords and privacy settings

8 Foundation tasks

Around 10 million adults in the UK do not have all the Foundation level skills necessary to complete all eight tasks and around 2.8 million people are unable to complete any of these tasks i.e. they are completely digitally excluded. Having these skills allows access to the internet which provides a gateway to the digital economy.

Age continues to be the biggest factor: only 28% of those 75+ have all the Foundation skills whilst 97% of 18-24yr olds have them.

Use the different menu settings on a device to make it easier to use
Find and open different applications/programmes on a device
Update and change a password when prompted to do so
Turn on a device and log in to any accounts/profiles
Open an Internet browser to access websites
Utilise the available controls on a device
Connect a device to a Wi-Fi network
Keep your login details and passwords secure

Fast Forward for Digital Jobs, techUK

The Fast Forward for Digital Jobs Taskforce has identified seven key recommendations which will enable us to skill, reskill and retrain people – guiding them into fulfilling jobs for the future and equipping them with the tools they need to thrive. These broadly fall under three headings:

supporting learners

supporting employers

delivering at scale

Graphic UK essential digital skills for work report by Lloyds bank and futuredotnow

Essential digital skills for work

In the UK, 59% of the workforce (23.4 million people) isn't reaching its full potential due to a lack of digital proficiency. Only 41% have the complete skill set needed for today's workplace, and 8% can't perform any digital tasks. About 12% lack basic digital skills, such as connecting to Wi-Fi, and at least 20% struggle with tasks like using digital productivity tools and accessing online financial information. A key challenge is improving productivity with collaboration tools, which 13.8 million people are missing out on.

Online safety is a significant concern, as four of the top ten digital tasks the labour force can't perform fall within this category. Accessibility and availability of digital tools also play a role in these challenges. The digital skill gap threatens to create a social and economic divide, disproportionately affecting those without formal qualifications, on lower incomes, living with impairments, or from lower socio-economic backgrounds.

Unemployed individuals face even greater challenges, being more than twice as likely to lack digital skills compared to employed individuals. Industry, education, and income levels are the strongest determinants of a person's digital skills, with the construction sector being particularly disadvantaged.

No UK region has more than half its workforce capable of completing all 20 essential digital tasks. London, Northern Ireland, and the South East perform the best, while the North East and Yorkshire and the Humber lag behind. Organisations must seize the opportunity to develop digital skills, ensuring online safety, efficiency, and productivity to realise commercial value and growth potential.

Top ten workplace tasks that workforce adults are least likely to be able to do, 2022

1) I cannot improve my own and/or the organisation’s productivity using digital tools (e.g. Trello, Microsoft Projects and Planner, Slack)35%
2) I cannot access salary and tax information digitally (e.g. password protected payslips, P60, P45)27%
3) I cannot set privacy and marketing settings for websites and my accounts (e.g. managing social media privacy settings, managing cookie settings, updating contact preferences)27%
4) I cannot set up and manage an account on a professional online network/community/job site (e.g. LinkedIn, Total Jobs, Indeed)26%
5) I cannot complete digital records on behalf of, or within my organisation (e.g. absence management, holidays, timesheets, expenses, tax returns)24%
6) I cannot update my device software/operating systems when necessary to prevent viruses and other risks (e.g. enabling automatic updates, or installing when prompted to do so)23%
7) I cannot identify secure Wi-Fi networks to connect to (e.g. Wi-Fi networks where a unique password is required, trusted source or padlock next to Wi-Fi network)22%
8) I cannot use workplace digital tools to create, share and collaborate with colleagues (e.g. Microsoft Teams, OneDrive, G-Suite, Office 365, WeTransfer, DropBox, WebEx, Slack)22%
9) I cannot securely access, synchronise and share information at work across different devices (e.g. manage email, calendar or appointment system via different devices)21%
10) I cannot identify secure websites (e.g. by looking for the padlock and ‘https’ in the address bar)21%

The digital skills our economy needs

"In 2020 we published a report ‘Answering the call for digital skills excellence’, setting out the importance of providing high quality digital skills based on data from the consultancy EY on the rapid increase in international investors looking to invest in the UK’s growing digital economy. ‘Disconnected? Exploring the digital skills gap’ in partnership with Learning and Work Institute and Enginuity confirms the importance of digital skills to the UK economy and helps us understand the supply and demand issues around the digital skills gap, from the points of view of young people and employers."

Basic digital skills have become essential in the modern workplace. Over one in four (27%) say that the majority of their workers require advanced digital skills. Whilst many employers hope that that the current skills gap will improve in the future, despite increasing demand, it's not clear how much training employers are prepared to give to their workforce to meet this demand, perhaps preferring, as in the past, to either hire these skills in or develop them through on the job training.

The current pipeline of digital skills through the education and skills system is not providing the necessary skills, hence why improving digital skills is seen as a critical priority by the government.

How should companies approach improving their digital skills?


Digital Vision

Firms should plan and develop a long-term digital vision

Company-Wide Approach

The approach to improving digital skills should be across the whole company

External Collaboration

Look outside your firm to other local SMEs, your supply chain or local LEP

Next Generation

Work with schools, education providers and offer apprenticeships

Existing Talent

Find hidden talents in your workforce and invest in training


Demand for tech jobs higher in June 2021 than June 2019

3 million

people working in tech in the UK


of all tech jobs advertised are for Software Developers, the  number one role required
Digital man running graphic - digital skills training

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An estimated 78% of people have the Essential Digital Skills for work

Digital skills requirements in the tech sector

In an economy where the workplace is changing rapidly, it is vital to ensure that the workforce continues to have the right skills necessary to drive forward an advanced, 21st century economy. 

According to the Digital Skills Academy, employers are changing their view on what they require from their workforce.  They now recognise that a workforce with a wide variety of digital skills is vital, rather than having a majority of specialists. Employees with a wide-ranging skill set and broad experience add greater value to the bottom line.

So what are the key technical skills that tech employers are looking for in their workforce?

1. Programming, App & Web Development

1. Programming, App & Web Development

Coding skills, knowledge and expertise are at the heart of any tech product or digital service. They're vital for new technologies like augmented reality and virtual reality.

2. Digital Business Analysis

2. Digital Business Analysis

Independent analysis of digital solutions helps companies make the right choices. Digital transformation is at the heart of many business models; getting it right is vital to help drive business growth.

3. Digital Design & Data Visualisation

3. Digital Design & Data Visualisation

Creating effective, dynamic user experiences is important to the success of a company or product. Utilising complex data to help management visualise issues and options helps them gain deep insight and value.

4. Digital Project Management

4. Digital Project Management

As digital transformation puts cost-effective and timely development at the heart of many businesses, so understanding the methodologies and tech required to achieve this is in demand.

5. Digital Product Management

5. Digital Product Management

With new digital products and services, especially for companies that sell Software as a Service, becoming central to most business models, managing their life-cycle effectively is vital.

6. Digital Marketing

6. Digital Marketing

Designing and building are important. Getting products and services to market, understanding where buyers are found and how to reach them, and utilising all the tools and networks available is critical. 

7. Social Media

7. Social Media

Getting direct access to customers is possible through the power and reach of social media. Understanding how to make the best use of these powerful tools is a skill much in demand.

8. Data Science & Data Analytics

8. Data Science & Data Analytics

Data is created and gathered in almost unimaginable quantities. Being able to sift, analyse, and make sense of it; to discern patterns and nuggets of information to help effective management is critical.
9. Decision Making for Leaders

9. Decision Making for Leaders

Managing a business has been helped in many ways with more effective, accurate digital tools. Understanding how best to deploy new technology, in a rapidly changing world, requires nimble, effective decision-making.

10. Something New

10. Something New

To help an employer choose between multiple candidates, it pays to stand out with a unique experience or skills that could be a professional qualification, or experience in a complex, multi-disciplinary project.

finance chart on computer screen

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UK Government: Our 10 Tech Priorities

Technology has transformed our lives, and will be at the heart of our recovery.

Here are the 10 ways DCMS intends to deploy digital tech to build back better, safer and stronger from COVID, and shape a new golden age for tech in the UK.

1. Rolling out world-class digital infrastructure nationwide

Gigabit broadband and 5G are at the cutting edge of digital infrastructure, enabling us to connect at lightning speeds. We are spending £5 billion to make sure homes and businesses across the country benefit from gigabit broadband - including those in harder-to-reach areas. We will also keep working to ensure vulnerable people access the support they need to benefit from digital connectivity too.

2. Unlocking the power of data

Data is the driving force of modern economies. By removing barriers to responsible data sharing and use, we aim to become the world’s number one data destination: an open, welcoming and secure environment where companies from all over the world can innovate and grow, and where data improves life for people across the UK.

3. Building a tech-savvy nation

We want every adult to have a base level of digital and cyber skills so that no-one is left behind by the digital revolution. Our apprenticeships, digital bootcamps and the Digital Entitlement will help set people up for the highly-skilled, highly-paid roles of the future, and give them the confidence to use the internet safely and securely, while our £520 million Help-to-Grow scheme will empower 100,000 businesses to adopt the latest tech.

4. Keeping the UK safe and secure online

Our digital economy is world-leading because people have trust in the technology that underpins it. Our online harms legislation will hold social media companies to account for the safety of their users while protecting free speech and expression, and the freedom of the press. We will also implement measures to make our networks more secure against cyber threats, including by legislating to ensure that critical technologies of the future are “secure by design”.

5. Fuelling a new era of start-ups and scaleups

The UK is the tech powerhouse of Europe, attracting more investment than France and Germany combined. Our trailblazing pro-competition Digital Markets Unit will build on this incredibly strong foundation - opening up the market to new and innovative tech companies. By creating the right environment for companies to access growth capital at every stage of their cycle, we will secure our status as one of the most attractive countries in the world to start and grow a digital business.

6. Unleashing the transformational power of tech and AI

Artificial intelligence has the potential to fundamentally transform our lives. The UK already has a strategic advantage in this new frontier, and our upcoming National Artificial Intelligence Strategy, which we will publish later this year, will help us build on our world-class research and innovation base. We will also work to solidify our global leadership in the development of quantum computing and other transformative tech.

7. Championing free and fair digital trade

As an independent nation with a thriving digital economy, the UK will lead the way in a new age of digital trade. We will ensure our trade deals include cutting-edge digital provisions, as we did with Japan, and forge new digital partnerships and investment opportunities across the globe.

8. Leading the global conversation on tech

As technology alters our world, the UK is helping set the new rules of engagement. We will continue to lead global efforts to boost digital competition, strengthening our reputation as a pro-tech, pro-innovation business environment. We will use our international voice and G7 Presidency to shape the global debate on how we govern tech companies; to champion our democratic values; and to coordinate work on telecoms diversification, ethical AI and other global challenges.

9. Levelling up digital prosperity across the UK

As we turbocharge our tech sector, we will ensure long-term digital prosperity is evenly spread across the entire country. Many of our most exciting tech companies are already based outside of London, and we will continue to support these hubs by building on regional innovation, regional strengths and regional specialisms, while enabling businesses in every UK postcode to seize the opportunities of the digital economy.

10. Using digital innovation to reach Net Zero

British-built climate tech and conservation tech can help us address one of the greatest challenges of our time. In the run-up to COP26 in Glasgow, we will support the uptake of technologies that reduce carbon emissions and help us restore our biodiversity, and give British businesses the digital tools to reduce their own emissions as we drive forward a Green Industrial Revolution.

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