Offshoring and IT skills gap leave UK lagging behind

A continuing IT skills gap is harming the UK's global competitiveness as an ideal location to do e-business, a parliamentary inquiry into the health of the UK's IT industry has been warned.

The Trade and Industry select committee is investigating the UK's progress towards the 'knowledge-driven economy' championed by the government in 1998. Two of the main areas the inquiry will focus on are increased competition from low-cost economies with highly skilled and educated workforces and the introduction of e-commerce.

Early evidence presented to the committee highlights the IT skills gap as a growing concern for UK businesses.

Philip Virgo, strategic advisor to the Institute for the Management of Information Systems (IMIS), told the committee that basic numeracy and literacy skills are lacking and, once in IT jobs, UK workers' skills quickly become out of date through an absence of updating and development.

"We have this idea that you get them to university for a couple of years and they are then skilled," he said. "If after initial training they are not on a workforce updating programme, professional development programme...then their skills will have atrophied inside two to three years."

The UK has focused too much on low-level NVQ skills at the bottom end of the market and on specialised high-level skills at the top, leaving a gap in the middle, according to Virgo.

"It is a longstanding issue and goes back to the collapse of the apprentice training schemes," he said.

The other main issue the committee is investigating is the impact of offshore outsourcing, amid concerns that not only has the promised 'knowledge economy' jobs boom not materialised but many of those positions are now being moved abroad to low-cost bases in countries like India.

David Fleming, national secretary of financial services at trade union Amicus, told the committee last week that little has been done to assess and plan for the impact of the loss of jobs through offshoring on local communities and he called for the government to take a harder line with businesses over corporate social responsibility.

"Obviously we would like to see the government taking a much stronger role in monitoring the effectiveness of the impact and conduct of corporate social responsibility policies," he said. "Whereas government generally with business should be hands-off and in terms of making business decisions it is hands-off, that is fine; but corporate social responsibility is a different area."

The issue of broadband was also examined and the committee was told the focus now needs to shift on drawing up a top-level policy for a new generation of broadband technology with much bigger bandwidth.

Dr Philip Hargrave, chief scientist at Nortel Networks and board member of tech industry trade body Intellect, said the 512Kb per second rate is just an "entry point" that enables easier web surfing and basic teleworking.

"But we are on this cusp of needing to roll out the next generation of broadband where the bandwidths go beyond what you can do. We see countries like Korea...saying 'make sure every resident can get 20 megabytes rather than half a megabyte by 2005'."

The Trade and Industry select committee is expected to publish its findings towards the end of May after it has finished hearing evidence.

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