When I read the findings of the 2018 High Growth Small Business Report, one data point really stood out. Out of the companies surveyed, 90% said their business was suffering from skills shortages. That’s a very worrying statistic, and last year, the Government’s Building our Industrial Strategy green paper clearly identified the size of the task at hand.
It said that, despite the UK having some of the top universities in the world, and a larger proportion of the population with degree-level qualifications that most other nations, technical education has been relatively neglected: “Consequently, we have a shortage of technical level skills, and rank 16 out of 20 OECD countries for the proportion of people with technical qualifications. We have particular skills shortages in sectors that depend on STEM (science, technology, engineering and mathematics) subjects, where we need more of these graduates to compete successfully in a global economy.”
Struggling to compete with the world’s best
Here’s a real-life example of the danger of the UK falling behind in the STEM disciplines. In the summer of 2017, the 41st annual International Collegiate Programming Contest World Finals was hosted at Rapid City, South Dakota. This is the place where the world’s best coders come to pit their wits against one another. The organisers and coaches explained that just one individual coding problem put to competing teams would take typical computer science students an entire semester to solve. First place went to the St Petersburg National Research University. In fact, Russian and Chinese teams took nine of the top 14 spots.
It is far from a coincidence that, until very recently, to graduate high school in Russia, every student needed to have passed calculus. This focus on STEM subjects at an early age – and continued focused through to university – has a profound impact on the ability of the students to step into computer science. The problem in the UK starts long before computer programming. We are no longer promoting the building blocks and foundations of digital skills, and we urgently need to change that. Because with today’s rapid pace of digital change, we can’t afford to keep falling behind.
The rate at which we are creating data is accelerating
One of the most astonishing outcomes of global digitisation has been the exponential rate at which humanity is creating data. Today, 2.5 quintillion bytes of data of new, previously non-existent information will be created. To try and put that in context, 2.5 quintillion pennies would cover the earth five times over, and 2.5 quintillion bytes would fill 2.5 million 1TB hard drives from your run-of-the-mill desktop PC. That is an astonishing amount of information, so the quintillion dollar question is, where will it lead us?
My view is the sheer scale and depth of the data we are now capable of producing will drive the fourth industrial revolution and offers the potential to truly revolutionise people’s lives. I anticipate that some of the most revolutionary and life-changing innovations of the next 20 years will be driven by how we manage to harness this tidal wave of information and shape it into something that provides answers to previously unanswerable questions and unsolvable problems.
“The sheer scale and depth of the data we are now capable of producing will drive the fourth industrial revolution and offers the potential to truly revolutionise people’s lives.”
This new world places an ever-increasing emphasis on the need for ‘digital skills’, but this phrase is too broad. We will, of course, need more brilliant developers to build the machine-learning algorithms that find actionable patterns in huge data sets but for the UK economy to flourish we need to go back to basics. A more sustained focus on STEM, and reacquainting UK students with calculus and mathematics will definitely help. Therefore, it was encouraging to hear in the Chancellor’s Spring Budget, that the Government is introducing new ‘T-Level’ qualifications. These technical study programmes intend to create a ‘skills partnership’ between government, business and education and training providers.
“As our economy changes, we must ensure people have the skills they need to seize the opportunities ahead. So, we’ve committed over £500 million a year to T-Levels, the most ambitious post-16 reforms in 70 years.”
Philip Hammond, Chancellor of the Exchequer
How is Octopus playing a part?
As a fast-growing UK business, Octopus is trying to address the digital skills gap. We can’t change the education system, or teach basic calculus, but we can invest in the development of our employees. We want every person that joins to have the opportunity to develop digital skills; to understand the principles of coding; to recognise the tools needed to extract large datasets; to have the ability to run predictive analytics throughout every function. And most importantly, we teach our people to have the ability – and the freedom – to seek the answers to any questions that they choose to ask.
Because in a few years’ time, we believe that the most successful businesses will be those that are actively driving data into the darkest corners of typically non-data-driven functions. For example:
- Human resources departments using data to determine the key character traits that lead to top performance, or pinpoint areas of potential conflict in the workplace.
- Finance teams spending 90% of their time providing deep insight that supports other areas of the business, from product development through to marketing.
- Sales teams armed with real-time insight of the sales conversion impact of different phrases when they are talking to a potential customer.
We can regain our edge
The UK is still a great place to start and grow a business, and we continue to be a very creative and innovative nation. It’s a place that rewards creativity and innovation, and having the ability to step up, ask questions and challenge the status quo is stronger here than almost anywhere else. But the world is changing fast, and the immense opportunity that this presents doesn’t come for free. We therefore need to adapt in order to remain competitive. As the High Growth Small Business Report shows, we would welcome the Government increasing its investment into these areas to protect what we have, and to help UK businesses of all sizes to build a brighter future.