In a new series of blogs, we will be reviewing the current and historical work of City-REDI.
In the latest blog, we look at Dr Hunajia Ma, Dr Matthew Lyons, Dr Konstantinos Kollydas and Professor Anne Green’s work on the shortage of digital skills in the UK.
In an era of rapid technological transformation, digital skills are no longer a luxury—they are a necessity. A recent research report presents a comprehensive analysis of digital skills demand across the UK, uncovering not only growing regional disparities but also warning of potentially devastating economic consequences if shortages are left unaddressed.
A Surge in Digital Skills Demand
Over the past decade, the demand for digital skills in the UK has nearly doubled. In 2022 alone, nearly 4.9 million job postings required some level of digital proficiency—up from around 2.4 million in 2012. Today, almost 39% of job adverts call for digital competencies, confirming that digital literacy is foundational in the modern job market.
Digital Disparities Across the UK
Not all regions are keeping pace. London and the South East lead in digital skills demand across all levels—basic, intermediate, and advanced. But other regions are catching up. Areas like the North West, West Midlands, and Scotland are showing increasing demand, particularly for intermediate and advanced digital capabilities.
Conversely, regions such as the North East lag behind, highlighting stark geographic inequalities. These regional differences pose serious challenges for equitable economic growth and digital inclusion.
Digital Skills Across All Occupations
Digital proficiency is no longer reserved for IT roles. Demand spans all occupational categories:
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Professional roles require the most advanced digital skills.
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Even elementary occupations increasingly need basic and intermediate digital competencies.
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Skilled Trades and machine operators have seen strong growth in digital requirements, reflecting deeper integration of digital tools in traditionally manual roles.
What Skills Are Most in Demand?
At the advanced end, software development dominates. Skills in Agile, SQL, C, and Java remain highly sought after, alongside fast-growing needs in AI and machine learning.
For intermediate and basic levels, the demand is focused on tools that drive productivity—Microsoft Office, SAP, digital marketing, and help desk support are essential in a wide variety of roles.
And the future? It’s increasingly cloud-based and AI-driven. The demand for skills in Python, Microsoft Azure, AWS, Power BI, and automation technologies is rising across the board.
Worsening Shortages—and Their Costs
The UK’s digital skills shortages are growing. Between 2018 and 2021, shortages rose sharply, exacerbated by the pandemic. In 2021, managers and professionals experienced the most acute gaps.
Shortages are especially severe in the devolved nations, as well as in London and the South West. Even when national data suggest adequate supply in some job types, regional breakdowns reveal hidden vulnerabilities, especially in elementary, administrative, and skilled trade roles.
A Costly Future
If these shortages persist, the economic fallout could be severe. Without action:
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The UK could lose £4.4 billion in 2024 alone due to digital skills gaps.
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By 2030, that figure could skyrocket to £27.6 billion.
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Over 260,000 jobs (FTEs) may be lost in 2024, rising to more than 380,000 by 2030.
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Low-tech sectors are equally affected and could face economic costs from digital skills shortages of up to £14 billion by 2030
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Professional and associate professional roles will be hardest hit, but even elementary roles could see losses of up to 48,000 jobs by 2030.
While London and the Greater South East may suffer the highest economic losses, the North West, East of England, Yorkshire & the Humber, and Scotland are also at high risk—particularly in low-tech sectors like food production and wholesale trade.
The UK is at a crossroads. The digital economy is evolving fast, and without a coordinated, regionally informed strategy to develop and distribute digital skills, the economic toll could be enormous.
Upskilling the workforce isn’t just about meeting job market demands—it’s about future-proofing the economy, ensuring opportunity is spread more evenly, and closing the digital divide.
Read the full report.
Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.