Service Contract
CHAPTER 5: KEY ‘PHASE ONE’ FINDINGS Introduction Introduction
The key objective of ‘phase one’ of this research was to describe the current international landscape for e-skills and ICT professionalism. In doing so, it has become clear that the landscape is complex: there is no single truth that resonates in all countries, in all regions, or across all stakeholders. However, this lack of concordance does not mean that there is little basis for collaboration. It could be argued that it is precisely because of the multitude of divergent paths that efforts to foster collaboration should be strengthened. In this chapter, some of the key themes that have emerged in the course of the ‘phase one’ research are reflected. In addition, some current and emerging policy actions are reviewed and a narrative is presented that outlines how international stakeholders may collaborate going forward.
Assessment of the current landscape for e-skills and ICT professionalism
World trade and technology
Introducing the 2013 World Trade Report, Pascal Lamy, the Director General of the World Trade Organisation stated “technology has not just provided the wherewithal to make globalization possible in a physical and virtual sense, but it is also the key source of increased productivity associated with innovation and growth…Likely developments in respect of many of the sectors and issues…depends crucially on what happens on the technology front…New technologies and innovation will emerge with greater vigour from the services sector. Technology could also change much of what we take for granted today in terms of production and consumption patterns.
Technology and trade are both recognized as disruptive forces in terms of income distribution. It is trade that faces the strongest political opposition even if in reality it is a lesser force for change than technology. In either case, long-term policies for education and training, and short-term policies to manage these transitions are indispensable to future growth, stability and social harmony” (Lamy. 2013). Such a statement encapsulates the importance of technology to the global economy, and in turn, reinforces the need for ICT skills that allow technology to be exploited successfully.
Jobs crisis
The world is confronting a jobs crisis. Over 197 million people are without a job in 2012. In the advanced economies, over 40 million are unemployed at a time when businesses complain of a dearth of skilled workers. As McKinsey conclude “labour market institutions and policies have not kept up to date with the changes in business practices and technology that are defining what kind of jobs will be created and where they will be created”. The situation is particularly alarming for young people. For
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example, in Greece, Spain and South Africa, more than half of young people are unemployed. There is a risk that this cohort will remain unemployed for a long time period, as the next wave of graduates/school-leavers are likely to be perceived as more attractive to employers than a group who have been unemployed for a prolonged period. The pattern is particularly worrying as the high levels of youth unemployment coincide with reports from many employers that a skills shortage is a cause of entry- level vacancies. Together, this pattern underlines the need to improve skills development for this age group in parallel with efforts to create jobs.
Technological change
A series of major, interconnected technological trends are evident: cloud computing, big data, cyber security, social business and internet of everything. The trends represent important shifts in the application of ICT, and are likely to act as the main drivers of increased demand for ICT practitioners over the period under examination.
Impact of globalization on the demand for e-skills
Offshoring is most commonly used as a form of cost arbitrage, given the lower salary costs. While this differential has narrowed in recent years, there is still a significant difference in costs, with an entry level graduate to an Indian IT outsourcing firm costing approximately one-tenth of the equivalent in Germany. It is likely that usage of offshore providers could accelerate in Europe, given the prevailing, strong cost focus within organisations. In addition, offshore vendors are making investments to build local profiles and presence in Europe, recruiting “native” local European for sales, marketing, consulting and delivery functions that are supplemented by remote service centres in low-cost economies. This sourcing model appears to resonate well with buyers, possibly because it often results in the creation of local, high-skilled jobs by the provider, and there is evidence of a growing user acceptance of offshoring.
In the longer term, low-cost EU countries that are currently service providers, most notably Eastern EU countries, are likely to become more expensive, diminishing their appeal from a cost perspective. Asia is the leader in delivery centre setup and expansion, led by India. Another factor to take into consideration in examining offshoring trends is the level of domestic demand in developing economies.
Companies wishing to establish a presence in the regions with predicted fastest growth are now targeting Asia-Pacific, Latin America and Middle East-Africa rather than Western economies. Although profit margins are currently higher in Europe and the US, the longer term trends suggest that the other markets have the greatest growth potential. ICT skills are scarce, and therefore companies may decide it is in their long term interest to focus on emerging markets than invest in developed economies experiencing limited growth. Another trend that may limit growth of offshore providers is the current re-shoring trend, particularly notable in America where a number of high-profile re-shoring activities have made headlines.
High-value, high touch jobs are perceived as less vulnerable to offshoring i.e. those requiring personal touch and judgement that cannot be provided remotely. There is strong evidence to suggest that the role of ICT in organisations is now growing in importance – the emergence of the Chief Digital Officer is testimony to this trend.
Certainly, the survey conducted as part of ‘phase one’ suggests that while traditional
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ICT departments will decline in importance, there will be growing demand for ICT professionals across the enterprise. This is an important trend as high-value, high touch jobs are typically perceived as less vulnerable to offshoring. Therefore, it is possible that growing demand from the business for ICT solutions that are agile, requiring rapid iterations and close interaction with users, will limit offshoring of such ICT roles.
Changing demand for ICT skills
In engaging with over 70 European CIOs/senior IT managers, a picture emerged of the changing demand for ICT skills over the period 2013-2020. Key findings include:
70% of CIOs “agreed” or “strongly agreed” that there is a serious ICT skills gap/mismatch that is hampering the growth of companies.
Approximately 50% of CIOs felt that the lack of high level ICT skills was impacting on their ability to grow the business.
More than half of the respondents felt that recent ICT graduates lacked the necessary combination of skills to contribute to the business without additional training. Only one quarter believed that they did possess the required skills.
Over 60% of respondents felt that offshoring was likely to have a moderate/high/very high impact on their organizations. However, automation was perceived as the bigger threat, with over three quarters of respondents stating it would impact their businesses.
Three quarter of participants believed that the ICT profession is global and national efforts must align to mature the profession successfully.
80% of participants believed that ICT professionals should share a common understanding of a foundational ICT Body of Knowledge.
In terms of the expected trends for individual skills, Table 13 below highlights the key findings:
SKILLSET TRENDS (2013-2020) – CIO Perspectives Most likely to grow
(% respondents)
Most likely to be offshored (% respondents)
Least likely to be offshored (% respondents)
Data visualization (83%) Coding (54%) Information security (81%) Information security (80%) Software testing (45%) Enterprise architecture (76%) User experience design (74%) ICT Support (40%) ICT Supplier Management (76%)
Table 12: CIO views on skill set demand/location. (Source: primary research, 2013).
Note: It was also interesting to note that the skill set that was most predicted to experience decreased demand was legacy maintenance (more than double any other skills). However, the fact that only 21% of respondents viewed this as likely suggests
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that in overall terms, most CIOs believe that demand for ICT skills generally will remain relatively robust over the period 2013-2020.
Strongest growth: The strong growth for data visualization and information security skills most likely reflects the growth in importance of big data and concerns over cyber security. Similarly, the growth in demand for UX skills is most likely related to the need to develop interfaces that are usable on different mobile devices such as smartphones and tablets.
Likely Offshored: The result that coding, software testing and ICT support were most likely to be offshored was anticipated. However, the number of respondents who felt that these skills were likely to be offshored was higher than might have been expected. In the survey, participants were asked to
“indicate the likelihood that the skill will be offshored at some point in time in the period 2013-2020”, but “the extent to which the skill would be offshored”
was not asked. It is therefore important to emphasise that there is no suggestion that 54% of all coding skills will be offshored.
Unlikely offshored: The survey results suggest that information security and enterprise architecture are unlikely to be offshored, possibly because they are perceived as being too strategically important to be offshored or outsourced.
Similarly, the desire to keep ICT supplier management in-house or at least onshore, suggests a desire to retain central control over suppliers.
The impetus for change
Demand for ICT workers in Europe is likely to change significantly by 2020. Many of the skills currently utilized in the IT units of European organisations will no longer be required, or at least, not desired at the current cost levels. The encroachment of automated software and cost arbitrage opportunities from developing countries suggests that the employment outlook for a significant proportion of ICT workers, particularly those working in ICT support and testing, will be challenging. A Quocirca study estimates that “30% of an IT team’s time is spent on low level tasks such as responding to minor user incidents, carrying out routine procedures or checking for errors” (Tarzey and Longbottom, 2012).
At the same time, there is also likely to be rapid growth in areas related to the new technological trends of big data, mobile, cloud computing, and information security.
If estimates are to be believed, the growth in demand for skills in these areas will outnumber the workers with skills that are no longer in-demand. The logical conclusion is to reassign workers from the now-defunct parts of the IT organization to the emerging technological areas. However, the reality is that doing so will require substantial re-skilling in many instances, and this will demand the engagement of all relevant stakeholders to develop meaningful, pragmatic solutions.
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Diversity of current policy actions
Figure 60 (below) provides an indication of the diversity of policy actions, in some cases proposals for policy actions, being promoted in different parts of the world. A view of the overarching objectives of these policy actions, along with a brief description of each action follows thereafter.
Figure 60: Policy actions / Good practices Transversal policy action objectives
Objective Description
Establish positive public perception of the ICT profession
The ICT profession has a negative image in many countries, impacting on the number of new entrants to the profession. By enhancing the perception of the ICT profession and related careers, more people will be encouraged to enter and remain in the profession, thereby lowering the risk of future ICT skills gaps. Policy actions such as targeted promotional campaigns to raise awareness of the importance of ICT and possible career opportunities for schoolchildren, students, graduates, and the unemployed could help to change public attitudes to the ICT profession in the longer term.
Encourage positive gender balance in ICT learner /worker populations
Low levels of female participation in ICT prevail at school, at university, and in the workplace. Successful initiatives to attract and retain women in ICT will enhance the supply of ICT skilled workers and potentially enhance the overall quality of team outputs through
Promote careers in ICT / Establish posi ve percep on at all life-stages (kids, teens, grads, ICT profs, non-ICT profs, elderly,..) Encourage posi ve gender balance
Teach Informa cs in primary and secondary educa on
Closer academic/industry alignment on informa cs
curriculum Increase freq of updates
to ICT curriculum (agile approach) Increase teaching of informa cs to non-ICT
graduates
Alignment of ICT qualifica ons with
entrance to ICT profession
Improve visibility of supply/demand for ICT skills / Strategic workforce planning Common language for ICT competences (e-CF)
Incen vise up-skilling and re-skilling opportuni es for experienced workers (inc older workers) Build educa on
capabili es in emerging technological domains
ICT CPD in emerging technological domains
(inc MOOCs) Immigra on policies to tackle short-term skills
deficits
Mul -stakeholder ini a ves to provide ICT
appren ceships
Promote coherent adop on of ICT ethics
Usage of ICT quality labels for cer fica on
Defined career paths for ICT professionals
Widespread usage of evidence-based portolios
Promote informa cs educa on among non-
ICT professionals Promote diversity of
ICT careers to schoolchildren Develop skillset in teachers to teach
informa cs
Enhance digital literacy in wider popula on Promote importance of lifelong learning strategies for ICT skills
Provision of training/
cer fica on for re-skillers Promote diverse range of
educa onal op ons for new entrants
Interna onal recogni on of informa cs qualifica ons
Job matching services to facilitate prac oner
mobility
Mul stakeholder partnerships to facilitate joined up policy making Transversal
Workplace Ter ary educa on
Primary/secondary educa on
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having a more diverse and balanced team profile.
Enhance digital literacy in the wider population
Low levels of ICT skills in the wider population impacts on the ability of citizens to participate in the digital economy, and acts as a form of social exclusion. Increasing participation through education will help re-integrate these members of society.
Promote importance of lifelong learning strategies for ICT skills
Learning habits are likely to change significantly in the future, due to for example MOOCs, and the ability to “bank” ICT skills acquired via formal, non-formal and informal education will become increasingly important. Initiatives to support this, such as competence frameworks and evidence based portfolios, are likely to gain popular support.
Support strategic workforce planning
Both companies and governments should be encouraged to plan ahead in terms of the ICT skills they will require in the future. By identifying shortages in advance, employers will be better prepared to implement mechanisms to counter such shortages through recruitment plans, in- house training, in-house reassignment, and immigration. Similarly, governments will be able to implement policies to better match supply and demand.
In terms of time horizons, companies are unlikely to plan more than three years in advance, but governments must plan ahead on a longer time horizon in order for the desired actions to have effect. For example, implementing changes to educational policies can take over 10 years before the benefits/discrepancies are realized (as in primary school education).
Improve visibility of supply/demand for ICT skills
At a national level, few countries have granular skills data, impeding efforts to tackle the skills gap effectively. Similarly, there is no consistency in approach between countries, hampering efforts to view the problem at a global level. Establishing consistent processes for collating and disseminating statistical data on ICT skills, possibly exploiting employers/recruiters datasets and harnessing a big data mindset, will help provide insight to support a more pro-active approach to the identification, targeting and assessment of policy actions, facilitating a just-in-time approach to the provision of skills in the workforce. For example, the usage of analytics can be extended to predict future demand for specific roles and/or availability of ICT skilled workers based on datasets related to training, certifications, competence assessments undertaken, search engine analytics, etc.
Promote a common language for ICT competences
At present, different ICT skills and proficiencies have different meanings across individuals, organisations, and countries. A common language for describing ICT competences would help employers, employees and educators in for example, workforce planning, recruitment, skills assessment, course design, training plans, and career paths. Encouraging wider adoption of competence frameworks to industry will help foster usage of a common ICT skills language.
Incentivise up-skilling and re-skilling opportunities for experienced workers (including older workers)
Targeted initiatives to encourage up-skilling and re-skilling are likely to form an essential part of national/regional strategies, given the need to increase the supply of ICT workers and ensure that the skills of existing workers remain competitive. The dynamic nature of ICT, coupled with the pervasiveness of ICT, suggests that increasing numbers of people must remain au fait with changing technologies throughout their careers in order to enhance their employment prospects. The US example of
“Lifelong Learning Accounts”, which incorporate tax breaks for employers and employees, is one such mechanism.
Develop Fostering a network of leaders and visionaries who champion e-
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leaders/visionaries to champion e-skills/ICT professionalism
skills/ICT professionalism will enhance the perception of the profession, as well as foster clarity of vision for those attempting to implement a national/regional e-skills policy.
Improve access to e-skills education
The low level of participation in ICT of women, youths, and over 55s is a missed opportunity. Targeted and timely initiatives to develop in- demand skill sets in these groups can help alleviate predicted skills gaps. New education options, such as MOOCS, can play an important role in improving access.
Promote shared
understanding of ICT fundamentals among professionals
Unlike other professions, there is no common shared understanding of the fundamentals of informatics. People entering the profession without a formal education in informatics may lack a broad understanding of the fundamentals but possess deep siloed knowledge. Fostering a common broad understanding of the domain, via a Foundational ICT BoK, will help to reduce risk.
Primary and secondary education policy actions
Action Description
Teach informatics in primary and secondary education
Computers are prevalent in society, but the concepts behind the technology are not effectively being taught to children. Introducing informatics to young children will enable the key concepts to be communicated at an early stage and for skills development to occur when they are most receptive. Amending the curriculum to include informatics for children of all ages will help foster an interest and understanding of informatics that will be helpful to all students, regardless of their future chosen discipline/career.
Promote diversity of ICT careers to schoolchildren
ICT has a negative image and few children consider a career in ICT.
Promoting a positive, diverse and vibrant image of the ICT profession to young people will help remove some of the negative perceptions.
Develop skill sets in teachers to teach informatics
Teachers, particularly primary school teachers who are responsible for teaching all subjects, lack adequate skills to teach informatics to children. In this respect, initiatives to encourage industry engagement to train teachers could prove helpful.
Tertiary education policy actions
Action Description
Promote closer
academia/industry
alignment on informatics curriculum
Processes to foster greater engagement between industry and academia will support the educating of graduates with knowledge relevant to industry operations. This may result in enhanced graduate readiness for industry employment.
Build education capabilities in emerging technological domains
Many of the new emerging technologies are strategically important and will fundamentally change the way in which ICT is used in organisations. Further, they may fundamentally change the nature of some organisations. It is important that there is adequate educational capacity to teach these new technologies within tertiary education and a curriculum exists to support this.
Increase frequency of
updates to ICT
Processes for maintaining ICT curriculum are often voluntary or best efforts. Given the growing strategic importance of ICT and its