Ecommerce Europe Brexit Update: Continued UK Tech Growth, but questions remain over e-skills shortages

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In recent months, despite uncertainty over Brexit, a number of major digital and e-commerce companies have announced significant expansions of their UK presences, prompting optimism that the UK can continue to be a tech leader even in the wake of Brexit.

However, even as these announcements bring the promise of digital jobs growth to the UK, there are growing concerns about the capacity of the UK workforce to supply the vital digital skills needed to support this growth. These concerns have grown as it has become clear that the UK government will push for limits to freedom of movement from the EU in its post-Brexit settlement.

Tech giants continue UK expansion

A number of major digital players, including giants in the e-commerce sector, have recently announced their decisions to expand their operations in the UK, bringing the promise of jobs growth in the tech sector.

In February, Amazon announced that it will be creating some 5,000 new jobs across the UK, including at its new UK headquarters in London, while online travel company Expedia announced it will be doubling capacity at its UK headquarters, which currently employs 1,400 staff. This came after major technology players, including Facebook and Google, announced plans to increase their UK workforce in the latter part of last year, with Google announcing 3,000 new jobs.

Such headline figures appear to demonstrate the robustness of the UK digital sector. However, in light of the skills needed to succeed in the digital sector, there remain question marks over whether the UK can support this growth.

Digital skills crisis?

In particular, there are doubts regarding the capacity of the UK labor market to provide the necessary digitally-skilled jobs needed for this growth. The UK digital sector is highly dependent on skilled EU migrants, and could, therefore, suffer from a considerable shortage of such skills if, as is widely expected, the UK government seeks to impose controls on the free movement of labor in the wake of Brexit.

On 19 February, the policy group the Coalition for the Digital Economy (COADEC) published a study, which found that the UK Tech industry as a whole faces a shortfall of some 800,000 jobs as a result of Brexit. In particular, the Report found that skilled migrant workers were of particular importance to the UK’s start-up sector. The Report, therefore, calls on the government to adopt a post-Brexit framework that allows for skilled workers to enter the UK, and to stay once they have arrived in the UK.

The headline figures reported by COADEC emphasize the UK’s digital sector’s high stakes in the aftermath of Brexit.

May’s strategy for post-Brexit digital skills

The UK government has acknowledged that that issue of a shortage of digital skills post-Brexit is a pressing one. In late January, UK Prime Minister Theresa May announced a strategy for the UK’s post-Brexit industrial plan, and the proliferation of digital skills was a major aspect of the plan.

The plan outlined several initiatives in this area, including the construction of Institutes of Technology in every UK region, and 15 core technical “routes” for students to be trained in the skills most needed by employers in their regions.

However, the plan was criticized for the relative lack of funding that was made available to realize the aims of the plan, with, for example, only £170 million being made available for the establishment of the Institutes of Technology.

The future of the UK as the major tech and e-commerce center in Europe hangs in the balance. Its future success heavily depends on the ability of the UK government to develop a post-Brexit framework that provides the industry with the necessary digital skills it needs to thrive.

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