Digital Tech Sector Data Pack. Version Final

Transcription

1 Digital Tech Sector Data Pack Version Final

2 Contents Page - Introduction to the Sector Data Pack 3 - Introduction to and Definition of the Digital Tech Sector 3 - Key Findings from the Data Analysis 5 - The Digital Tech Sector in New Anglia 6 o GVA 9 o Employment 12 o Businesses 29 o Wages 34 o Qualifications and Skills 38 o Vacancies 41 - A Future View of the Digital Tech Sector 47 - Views from Sector Stakeholders 56 - Appendices 62 o Appendix 1 Digital Tech sector definition 63 o Appendix 2 New Anglia LEP Digital Tech sector definition comparison with other recognised 65 definitions of the sector o Appendix 3 TechNation16 report definition of Digital Tech sector jobs using Standard 67 Occupational Classification 2

3 Introduction to the Sector Data Pack The role of the Sector Data Pack is to bring together the latest socio-economic and labour market data and present both an up-to-date, and future view, of the sector and any underlying issues within the area that could impact upon it. Information and feedback collected from stakeholder consultation (through workshops, meetings, and survey) is also presented and summarised (where available and applicable). The Data Pack sits below the Sector Skills Plan, with the key findings from the data analysis helping to inform the priorities developed in the plan. In most instances data has been analysed and presented down to local authority level. In some instances, and even where local authority data is available, it has not been presented in the data pack due to issues of unreliability and small sample sizes. This is particularly the case with data from the Annual Population Survey and the Annual Survey of Hours and Earnings. Throughout the Data Pack findings are also presented for the areas of Lincolnshire (county), Greater Cambridge and Greater Peterborough (GCGP) Local Enterprise Partnership (LEP), Greater Lincolnshire LEP (GLLEP), and South East LEP (SELEP). These comparator areas were agreed in consultation with the Digital Tech sector group and New Anglia LEP officers. Introduction to and Definition of the Digital Tech Sector The Digital Tech economy recognises the primary job roles involved in digital tech industries, such as computer programming and digital games design alongside the enabling role digital tech occupations make with traditional (non-digital) industries- such as finance and culture and tourism. The New Anglia Local Enterprise Partnership has previously prioritised the ICT Sector as one of five high impact sectors within its Strategic Economic Plan (SEP) (2014) 1. The SEP defines a series of major economic targets (by 2026), which includes a net increase of jobs growth by 95,000, 10,000 new businesses created and an overall increase to productivity for the region by Gross Value Added (GVA) (from 36,000 to 40,000). These high impact sectors have been prioritised as those that demonstrate the greatest opportunity for economic growth, therefore underpinning the SEP s headline targets. Initially defined as ICT, the LEP supported the development of business intelligence through an ICT partnership, initially hosted by the Suffolk Chamber of Commerce (as the IP Network ) and the commissioning of research to map the sector s key businesses and gather evidence on the opportunities, and challenges that the ICT sector faces 2. Partnership development based on the evidence findings of the mapping work highlighted the growing recognition of the significance of the sector economically, including its employment, business and jobs density being higher than previously assessed. This analysis was 1 New Anglia LEP Strategic Economic Plan (2014), New Anglia LEP 2 Mapping New Anglia s ICT Sector (2015), Regeneris 3

4 consolidated further with the Tech Nation Report- Transforming UK Industries (2016) 3, which highlighted that both Ipswich and Norwich were part of a list of 27 nationally significant tech business clusters. The Tech Nation report used defined indicators that included jobs density, economic performance and the extent to which key local organisations are effectively engaged with local businesses. Significantly, the Tech Nation report positioned industries, such as telecommunications and networking and hardware development alongside a range of other industries including app and software development, digital media and gaming- to promote the importance of the Digital Tech economy. The Digital Tech economy recognises the primary job roles involved in digital tech industries, such as computer programming and digital games design alongside the enabling role digital tech occupations make with traditional (non-digital) industries- such as finance and culture and tourism. Accordingly, both the former Department for Business Innovation & Skills (BIS) and the Department for Culture, Media and Sport (DCMS) identified the importance of addressing labour and skills shortages for key roles within the primary digital tech market and also the adoption of digital capability across the wider economy, to drive innovation and market competitiveness 4. For the purposes of this work Digital Tech, rather than ICT, has been adopted, which aligns well with the Tech Nation context and builds on the previous ICT sector mapping and New Anglia Local Enterprise Partnership supported research. A complete breakdown of the Standard Industrial Classification (SIC) categories that complete the scope of the Digital Tech definition can be found in the appendices along with information on how this definition compares with SICs used for the previous ICT sector mapping analysis and the Tech Nation 2016 report, and the framework used by the Department for Culture, Media and Sport (DCMS). Important to the definition is a framework which: - Captures in its entirety the SICs used for the previous ICT sector mapping analysis and the Tech Nation 2016 report; - Includes additional SICs that align with the Department for Culture, Media and Sport (DCMS) framework for digital technology; and - Based on stakeholder feedback includes a number of SICs including digital media, publishing, PR and communications activities, which reflects the increasing adoption of digital methods and subsequent skills needed, for important business activities across the New Anglia region. For these additional SICs the overall contribution evidenced towards key indicators such as jobs and employment share have been balanced using a standard percentage. This complements the Tech Nation methodology of equating digital economy activity across industries previously considered as being on the periphery. It is important to note that the process for categorisation of businesses by SIC is somewhat unregulated and is largely dependent on the initial registration a business makes with Companies House upon business start-up (and on subsequent annual returns). There is therefore an inherent risk with using SIC analysis as the sole methodology for assessing the scale of an industrial sector and subsequent evidence based action planning. For the purposes of the Digital Tech Skills Plan, a methodology has been developed that balances SIC analysis of secondary data alongside primary qualitative data obtained through key partner focus groups and semi-structured interviews. 3 Tech Nation- Transforming UK Industries (2016), Tech Nation 4 Digital Skills for the UK Economy (2016), BIS & DCMS 4

5 Key Findings from the Data Analysis: - The Digital Tech sector in New Anglia was worth approximately 1.3bn in This 1.3bn equates to just below 4 per cent of New Anglia s economy total value, which is less than its LEP comparators and nationally, suggesting that the sector is underperforming - Growth in value in the sector has been in line with that of nationally, but again below that of comparator areas - 16,600 people were employed in the sector in 2015, around 2.5 per cent of the total workforce, which again is below LEP comparator areas and nationally - Digital Tech sector employment within New Anglia is concentrated in Suffolk Coastal, Norwich, and Ipswich - Growth in employment has again been solid but lags behind that of its neighbours and nationally - Some local authority areas within New Anglia have experienced reductions in Digital Tech sector employment - New Anglia s Digital Tech sector Location Quotient is below that of its two main comparator LEPs and has fallen since Suffolk Coastal has a high LQ of 1.6 but this has fallen over the last 5 years - The decline in part-time employment in the New Anglia Digital Tech sector has been more pronounced than nationally - At the same time, growth in full-time employment has been just above that of nationally - There are 3,425 Digital Tech businesses in New Anglia and unlike employment, there is a good spread of these businesses across the area - The proportion of New Anglia residents with higher level qualifications is increasing but remains below national averages - Level 4 qualifications and above within the New Anglia Digital Tech sector are also below the national average - Growth in Digital Tech sector apprenticeships has in the main been flat since 2011 but there has been a shift in apprenticeship delivery more in line with the sector mix locally - Forecasts for employment growth in the sector are fairly flat, however, at the same time, management positions, and professional and associate professional occupations, are all set to grow in importance over time and fuel demand for higher skills within the sector and area. 5

6 The Digital Tech Sector in New Anglia 6

7 Digital Tech sector s contribution to the local economy 3.6% 2.5% 4.7% The Digital Tech sector contributes the following to the New Anglia LEP economy: - Nearly 4 per cent of total economic value (Gross Value Added or GVA) generated, which is around 1.3bn of the 35.5bn generated by the New Anglia economy in per cent of total employment (655,000), equating to 16,600 employees in Nearly 5 per cent of businesses, over 3,400 of the 72,900 businesses in New Anglia. GVA Employment Businesses Sources: Sub-regional GVA; Business Register and Employment Survey, UK Business Counts; all Office for National Statistics Please note that values for GVA are based on the Information and Communication Sector, with values for employment and businesses based on the SIC codes detailed in the appendices. 7

8 Digital Tech sector s contribution to growth in the local economy (2010=100) Growth in GVA in the sector has been higher than that of total growth in the New Anglia economy, whilst growth in business numbers has been roughly in line with that of total business numbers. The stand out element here is the fluctuations in employment in the Digital Tech sector. Based on feedback from the Office for National Statistics on this issue it appears that the 2014 totals overestimated employment in the sector, whereas 2015 estimates are in fact closer to reality. The shift was due to the sampling of two businesses in the sector who went through relatively unique circumstances (one moved employment into another industry between , whereas the other went through a restructure which saw employment numbers allocated differently in 2014 than in 2015). Digital Tech GVA Digital Tech Business Total Employment Digital Tech Employment Total GVA Total Business Sources: Sub-regional GVA; Business Register and Employment Survey, UK Business Counts; all Office for National Statistics 8

9 New Anglia Norfolk Suffolk Lincolnshire Digital Tech sector GVA ( m) across comparator areas, m 289m 824m 1,277m Sources: Sub-regional Gross Value Added (GVA), Office for National Statistics New Anglia s Digital Tech sector was worth approximately 1.3bn in 2015 GCGP GLLEP SELEP 343m 2,275m 3,453m In GVA terms then New Anglia LEPs Digital Tech sector dwarfs that of the Greater Lincolnshire LEPs. However, when we look to the other LEP comparator areas of Greater Cambridge & Greater Peterborough and South East, then the sector in these areas is much larger. Does this mean that the sector is more significant in those areas? 9

10 Proportion of total GVA produced by Digital Tech sector across comparator areas, 2015 The Digital Tech sector provided nearly 4% of New Anglia s total economic value in 2015 New Anglia 3.6% Norfolk Suffolk Lincolnshire GCGP GLLEP SELEP East of England 1.7% 2.1% 2.4% 4.0% 4.9% 5.4% 6.0% In response to the question of sectoral significance then the answer is both yes and no. Despite South East LEPs Digital Tech sector generating more than double that of New Anglia s, relative to the size of the total economy then the sector generates roughly the same amount i.e. 3 to 4 per cent. In the Greater Cambridge & Greater Peterborough LEP then the sector generates much more of total economic value at around six per cent. United Kingdom 6.5% Sources: Sub-regional Gross Value Added (GVA), Office for National Statistics However, when we look at the Digital Tech sector s contribution nationally then all areas are underperforming to a certain extent. 10

11 Change in Digital Tech sector GVA across comparator areas (2010 = 100) New Anglia Norfolk Suffolk Lincolnshire GCGP GLLEP SELEP East of England United Kingdom Growth in GVA of the Digital Tech sector in New Anglia has in the main been above the national average between 2010 and Despite this, figures for 2015 show that five year growth across the sector at both New Anglia and UK has been Sources: Sub-regional Gross Value Added (GVA), Office for National Statistics Economic growth in New Anglia s Digital Tech sector has been in line with national growth Growth in sectoral GVA across comparator LEP areas has been much higher, in particular in the Greater Lincolnshire LEP area though this is obviously countered to a certain extent by the sector being much smaller in that area. 11

12 New Anglia Norfolk 7,400 16,600 16,600 people were employed in New Anglia s Digital Tech sector in 2015 Suffolk 9,200 Employment in the Digital Tech sector across comparator areas, 2015 Lincolnshire 5,300 Source: Business Register and Employment Survey, Office for National Statistics GCGP 28,900 GLLEP 6,600 SELEP 51,700 12

13 New Anglia Norfolk Suffolk Lincolnshire 1.9% 2.1% 2.5% 2.9% Proportion of employment provided by the Digital Tech sector across comparator areas, 2015 In line with economic value, the Digital Tech sector is under represented in employment terms when compared to its neighbours and nationally GCGP 4.3% GLLEP SELEP 1.6% 3.2% Digital Tech provides 2.5 per cent of total employment in New Anglia, which is well below the 4.6 per cent provided nationally by the sector. East of England 4.1% England 4.6% Source: Business Register and Employment Survey, Office for National Statistics 13

14 Employment in the Digital Tech sector across New Anglia, ,000 8% Digital Tech sector employment in New Anglia is concentrated in Suffolk Coastal, Norwich and Ipswich 3,500 3,000 2,500 2,000 1,500 1, % 6% 5% 4% 3% 2% 1% 0% Employment in the Digital Tech sector in New Anglia is concentrated in the local authority areas of Suffolk Coastal, Norwich, and Ipswich. Suffolk Coastal local authority area is home to Adastral Park, resulting in it having the highest employment number. It is closely followed by Norwich and then Ipswich, the two further centres of activity for the sector. Digital Tech Employment % Digital Tech Employment Suffolk Coastal also has the highest proportion of its total employment provided by the Digital Tech sector. Source: Business Register and Employment Survey, Office for National Statistics 14

15 Norfolk 10% Suffolk Lincolnshire 4% 9% Change in Digital Tech sector employment across comparator areas, New Anglia LEP 9% GCGP 20% GLLEP 3% SELEP 27% East of England England 14% 21% Overall, employment in the sector in New Anglia has grown by around nine per cent but this is much lower than two out of its three neighbouring LEP area, and both regional and national averages. Source: Business Register and Employment Survey, Office for National Statistics 15

16 Breckland North Norfolk Change in Digital Tech sector employment across New Anglia, % -30% -20% -10% 0% 10% 20% 30% 40% 50% Norwich South Norfolk Broadland King`s Lynn and West Norfolk Great Yarmouth Waveney Babergh Ipswich Below LEP level, and looking at changes in employment at local authority level, then there are some very encouraging figures with many areas experiencing growth rates above that of the national average. Of particular note is Norwich which has a large number of people employed in the sector and had above average growth over the five year period in question. Source: Business Register and Employment Survey, Office for National Statistics Mid Suffolk Suffolk Coastal St Edmundsbury Forest Heath 16

17 Top 5 Digital Tech sub sectors, 2015 Industry Sector Code Industry Sector Name Employment % of total DigiTech sector employment Change in employment Other telecommunications activities 4,000 24% -8% Computer consultancy activities 3,600 22% 44% Business and domestic software development 1,700 10% 65% Other information technology and computer service activities 1,500 9% -7% Wholesale of electronic and telecommunications equipment and parts 700 4% -7% Source: Business Register and Employment Survey, Office for National Statistics 17

18 Top growth Digital Tech sub sectors with 100 employees or more Industry Sector Code Industry Sector Name Employment % of total DigiTech sector employment Change in employment Video production activities 100 0% 2175% Wireless telecommunications activities 200 1% 1392% Web portals 100 1% 303% Sound recording and music publishing activities 100 0% 223% Wired telecommunications activities 100 1% 211% Publishing of consumer, business and professional journals and periodicals 200 1% 204% Television programme production activities 100 1% 134% Other information service activities nec 100 1% 116% Book publishing 100 0% 100% Other software publishing 100 1% 69% Source: Business Register and Employment Survey, Office for National Statistics 18

19 Digital Tech sector location quotients across comparator areas, Norfolk Suffolk Lincolnshire Location quotients (LQs) are a useful way of showing a sectors importance to the local economy relative to the national picture. The analysis presented here uses employment with an LQ above 1 showing a higher concentration than nationally, and an LQ of below than 1 a lower concentration. New Anglia LEP GCGP GLLEP As with employment numbers then New Anglia remains below its nearest Digital Tech competitors of South East LEP and Greater Cambridge Greater Peterborough (GCGP) in terms of the sectors LQ. It is also worth noting the fall in New Anglia s LQ over time, albeit small, compared to the rises in LQs for the South East LEP and GCGP. South East SELEP Source: Business Register and Employment Survey, Office for National Statistics 19

20 Digital Tech sector location quotients across New Anglia, 2015 Breckland Broadland Great Yarmouth King`s Lynn & West Norfolk North Norfolk Norwich South Norfolk Babergh Forest Heath Ipswich Mid Suffolk St Edmundsbury Suffolk Coastal Waveney With the presence of Adastral Park then Suffolk Coastal is the only local authority area in New Anglia with a Digital Tech sector location quotient above 1. This is tempered by the fact that its LQ has fallen between 2010 and 2015, though this is not the only local authority district area across New Anglia to experience this. Source: Business Register and Employment Survey, Office for National Statistics 20

21 Digital Tech sub sectors (100+ employees) with location quotients (LQs) above 1 Industry Sector Code Industry Sector Name Employment % of total DigiTech sector LQ employment Repair of communication equipment 500 3% Motion picture projection activities 300 2% Video production activities 100 0% Manufacture of electronic components 300 2% Publishing of consumer, business and professional journals and periodicals 200 1% Publishing of newspapers 200 1% 1.1 Source: Business Register and Employment Survey 2015, Office for National Statistics 21

22 Digital Tech sub sectors (100+ employees) that supply a greater proportion of Digital Tech sector employment than UK average Industry Sector Code Industry Sector Name Employment % of total DigiTech sector employment Repair of communication equipment 500 3% Motion picture projection activities 300 2% Video production activities 100 0% Manufacture of electronic components 300 2% Publishing of consumer, business and professional journals and periodicals 200 1% Publishing of newspapers 200 1% Other telecommunications activities 4,000 24% Sound recording and music publishing activities 100 0% Wholesale of electronic and telecommunications equipment and parts 700 4% Other publishing activities 100 0% Specialised design activities 300 2% Manufacture of telegraph and telephone apparatus and equipment 100 1% Manufacture of loaded electronic boards 100 1% Book publishing 100 0% Repair of computers and peripheral equipment 500 3% 1.1 Index (UK=1) Source: Business Register and Employment Survey 2015, Office for National Statistics 22

23 Norfolk Suffolk Lincolnshire Digital Tech sector employment by full-time / part-time split across comparator areas, % 89% 87% 15% 11% 13% The full-time / parttime employment split of the Digital Tech sector in Suffolk is in line with the national picture. New Anglia LEP GCGP GLLEP SELEP 87% 89% 86% 87% 13% 11% 14% 13% East of England 87% 13% England 89% 11% Full-time Part-time Source: Business Register and Employment Survey, Office for National Statistics 23

24 Babergh 91% 9% Breckland Broadland Forest Heath Great Yarmouth Ipswich 86% 88% 85% 86% 86% 14% 11% 14% 14% 14% Digital Tech sector employment by full-time / part-time split across New Anglia, 2015 King`s Lynn and West Norfolk Mid Suffolk North Norfolk Norwich South Norfolk 84% 85% 81% 85% 85% 16% 15% 19% 16% 15% Of particular note here is the local authority area of Suffolk Coastal (the home of Adastral Park) with its employment structure geared towards full-time more than any other local authority area in New Anglia. At the opposite end of the scale is North Norfolk with nearly a fifth of its 300 people employed in the sector working part-time. St Edmundsbury Suffolk Coastal 86% 93% 13% 7% Source: Business Register and Employment Survey, Office for National Statistics Waveney 83% 17% Full-time Part-time 24

25 Change in Digital Tech sector full-time and part-time employment across comparator areas, Norfolk -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% Suffolk Lincolnshire New Anglia LEP GCGP GLLEP SELEP East of England Full-time Part-time In general, then the period 2010 to 2015 has seen a shift away from part-time working in the sector with growth only being recorded in full-time employment. In New Anglia then this shift in employment patterns has been more pronounced than nationally, particularly in terms of the decline in part-time employment. Source: Business Register and Employment Survey, Office for National Statistics England 25

26 -80% -40% 0% 40% 80% 120% Breckland North Norfolk Broadland South Norfolk Norwich King`s Lynn and West Norfolk Great Yarmouth Waveney Babergh Mid Suffolk Ipswich St Edmundsbury Suffolk Coastal Forest Heath Full-time Part-time Change in Digital Tech sector full-time and parttime employment across New Anglia, In contrast to the national and LEP level picture, at local authority level across New Anglia then there are two instances of where part-time employment has actually grown between 2010 and 2015 most notably Norwich being one of those areas. Unsurprisingly those areas which have experienced declines in full-time employment are also those that have experienced declines in total employment in the sector. Source: Business Register and Employment Survey, Office for National Statistics 26

27 35 Business and public service associate professionals 34 Culture, media and sports occupations 24 Business, media and public service professionals 21 Science, research, engineering and technology professionals 11 Corporate managers and directors Employment Male and Female employment in the Digital Sector and Top 5 Occupations for Employment 0% 50% 100% Total 52% 48% Digital Tech 67% 33% Total 71% 29% Digital Tech 76% 24% Total 82% 18% Digital Tech Total 58% 87% 42% 13% Source: UKCES Working Futures Digital Tech 61% 39% Total 60% 40% Digital Tech 50% 50% Total 55% 45% Digital Tech 57% 43% 27 Male Female

28 Self-employment in the Digital Tech sector Digital Tech 76% 24% Source: New Anglia Economic Strategy evidence base work All Sectors 86% 14% Employees Self-employed 28

29 New Anglia LEP Norfolk Suffolk GCGP GLLEP SELEP East of England England 0% 100% 28% 28% 27% 29% 28% 30% 29% 31% 32% 29% 23% 35% 28% 38% 35% 36% 10% 9% 10% 9% 9% 10% 10% 10% 31% 33% 39% 29% 33% 23% 26% 22% 113 Functional Managers and Directors 213 Information Technology and Telecommunications Professionals 313 Information Technology Technicians 524 Electrical and Electronic Trades Workplace Digital Tech employment 2011 by broad Standard Occupational Classification (SOC) across comparator areas Analysis of higher level Standard Occupational Classifications that contain those lower level Digital Tech sector occupations (detailed in appendix 3 on page X) hints at some distinct differences in the structure of employment across comparator areas. New Anglia LEP appears to be more geared towards the Electrical and Electronic Trades associated with the sector than nationally whereas as Greater Cambridgeshire Greater Peterborough LEP has a greater proportion of IT and Telecommunications Professionals. Source: 2011 Census, Office for National Statistics 29

30 0% 100% Breckland 32% 19% 7% 43% Broadland Great Yarmouth King`s Lynn and West Norfolk North Norfolk Norwich South Norfolk Babergh Forest Heath Ipswich Mid Suffolk St Edmundsbury 26% 28% 26% 32% 27% 31% 32% 31% 26% 34% 34% 31% 9% 33% 18% 17% 9% 10% 44% 48% 20% 8% 41% 40% 13% 21% 29% 31% 22% 37% 25% 26% 9% 8% 12% 11% 7% 8% 30% 29% 35% 26% 34% 32% Workplace Digital Tech employment 2011 by broad Standard Occupational Classification (SOC) across New Anglia These differences in the structure of employment in the sector become even more apparent when looking at the local authority areas that make up New Anglia. For example, Suffolk Coastal and Norwich are particularly geared towards IT and Telecommunications Professionals. Suffolk Coastal 18% 53% 7% 22% Source: 2011 Census, Office for National Statistics Waveney 27% 20% 9% 44% 113 Functional Managers and Directors 213 Information Technology and Telecommunications Professionals 313 Information Technology Technicians 524 Electrical and Electronic Trades 30

31 Digital Tech sector business numbers across comparator areas, South SELEP East LEP 13, GCGP GCGP 5, New Anglia LEP 3,425 Number of Business Units per 10,000 Population 13 GLLEP GLLEP 1,415 Number of Business Units 23 Suffolk Suffolk 1, Norfolk Norfolk 1, Lincolnshire 1, ,000 4,000 6,000 8,000 10,000 12,000 14,000 Source: UK Business Counts, and Sub-national Population Estimates, Office for National Statistics 31

32 Great Yarmouth Forest Heath Waveney North Norfolk Breckland King`s Lynn and West Norfolk Babergh Mid Suffolk St Edmundsbury South Norfolk Digital Tech sector business numbers across New Anglia, When compared with the concentrated picture of employment, then business numbers show a good spread across the New Anglia area though again with the top three areas composed of Norwich, Suffolk Coastal, and Ipswich. Unlike employment, Digital Tech sector businesses are spread out across the New Anglia area Broadland Ipswich Suffolk Coastal Norwich Source: UK Business Counts, Office for National Statistics

33 80% 85% 90% 95% 100% Norfolk Suffolk Lincolnshire New Anglia LEP GCGP GLLEP SELEP East of England England Babergh Breckland Broadland Forest Heath Great Yarmouth Ipswich King`s Lynn & West Norfolk Mid Suffolk North Norfolk Norwich South Norfolk St Edmundsbury Suffolk Coastal Waveney No. of employees 92% 92% 93% 92% 91% 93% 94% 93% 92% 6% 7% % 85% 90% 95% 100% 87% 82% 88% 94% 94% 95% 92% 90% 92% 93% 96% 96% 95% 96% % 12% 10% 7% 5% 6% 6% 5% 5% 33 5% 4% 6% 5% 8% 8% 7% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 5% 4% 4% 4% 2% 2% 4% 2% 1% Digital Tech sector business numbers by size across comparator areas, 2016 Source: UK Business Counts, Office for National Statistics At LEP and County level then there is very little to choose between areas in terms of the makeup of businesses by employee numbers. However, at local authority level then both Norwich and Ipswich in particular stand out, with 10 per cent of businesses employing between 10 and 49 people. Norwich too has the largest percentage of businesses employing between 50 and 249 people. Please note that at Local Authority level that businesses employing more than 250 people are not reported due to their very small numbers and resulting disclosive nature. Digital Tech sector business numbers by size across New Anglia, 2016 Source: UK Business Counts, Office for National Statistics

34 Change in Digital Tech business units across comparator areas, Norfolk 14% Suffolk 5% Lincolnshire 9% New Anglia LEP 9% GCGP 20% GLLEP 9% SELEP 32% East of England 29% England 37% Source: UK Business Counts, Office for National Statistics 34

35 Great Yarmouth -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Breckland South Norfolk North Norfolk Broadland Norwich King`s Lynn and West Norfolk Mid Suffolk Suffolk Coastal Babergh Waveney St Edmundsbury Change in Digital Tech business units across New Anglia, Below the New Anglia geography then we can observe some very different fortunes in business growth across the local authorities. However, please note the small bases for measuring change here. Forest Heath in particular, has seen business unit numbers increase by 33% but from a base of around 95. This is still surprising given that employment fell over roughly the same period. The large employment areas of Norwich and Ipswich have both performed well but worth noting the fall in business unit numbers in Suffolk Coastal. Sources: UK Business Counts, Office for National Statistics Ipswich Forest Heath 35

36 Digital Tech sector wages Median gross annual pay all employees (UK) Digital Tech (average median value) IT engineers (5245) Telecommunications engineers (5242) IT user support technicians (3132) IT operations technicians (3131) IT and telecommunications professionals n.e.c. (2139) Web design and development professionals (2137) Programmers and software development professionals (2136) IT business analysts, architects and systems designers (2135) IT project and programme managers (2134) IT specialist managers (2133) Information technology and telecommunications directors (1136) 26,597 23,409 39,130 37,065 (14%) 32,681 31,348 (4%) 28,376 27,922 (2%) 27,905 26,739 (4%) (6%) 36,896 38,894 (-5%) 30,000 28,445 (5%) 39,771 39,362 (1%) 44,226 41,028 (8%) 47,937 46,970 (2%) 47,020 43,540 (8%) Figures in brackets denote percentage change between 2014 and ,026 60,062 (15%) Information technology technicians (313) Information technology and telecommunications professionals (213) 28,247 27,211 (4%) 41,380 40,053 (3%) Source: Annual Survey of Hours and Earnings, Office for National Statistics 36

37 Digital Tech sector wages Median gross annual pay full time employees (UK) Digital Tech (average median value) IT engineers (5245) Telecommunications engineers (5242) IT user support technicians (3132) IT operations technicians (3131) IT and telecommunications professionals n.e.c. (2139) Web design and development professionals (2137) Programmers and software development professionals (2136) IT business analysts, architects and systems designers (2135) IT project and programme managers (2134) IT specialist managers (2133) Information technology and telecommunications directors (1136) 26,901 26,960 39,989 38,413 (0%) 32,702 31,474 (4%) 28,830 28,580 (1%) 28,813 27,905 (3%) (4%) 39,253 (-1%) 39,652 30,392 (5%) 29,026 40,687 (1%) 40,137 44,832 (7%) 41,837 48,536 (2%) 47,648 47,768 44,858 (6%) Figures in brackets denote percentage change between 2014 and ,161 64,469 (10%) Information technology technicians (313) Information technology and telecommunications professionals (213) 28,831 28,288 (2%) 42,515 40,874 (4%) Source: Annual Survey of Hours and Earnings, Office for National Statistics 37

38 Information and Communication Industry Workplace Qualifications across comparator areas, 2011 New Anglia LEP Norfolk Suffolk Lincolnshire GCGP GLLEP SELEP East of England 3% 4% 3% 4% 3% 5% 4% 3% 10% 11% 9% 12% 9% 13% 14% 11% 14% 17% 12% 12% 16% 18% 15% 19% 18% 13% 19% 18% 17% 17% 14% 15% 50% 44% 55% 40% 58% 39% 41% 51% 6% 6% 6% 6% 5% 6% 6% 6% Qualification levels in the sector (noting again that the Information and Communication industry is a broad approximation of the sector) in New Anglia compare favourably with those regionally and some comparator LEP areas. However, when compared with Greater Cambridgeshire and Greater Peterborough LEP and nationally then New Anglia falls short of those with level 4 qualifications and above. England 3% 9% 12% 14% 57% 6% Source: 2011 Census, Office for National Statistics No qualifications Level 2 qualifications Level 4 qualifications and above Level 1 qualifications Level 3 qualifications Apprenticeships and other qualifications 38

39 Digital Tech Apprenticeships There has been a shift in apprenticeship delivery more in line with the Digital Tech sector mix locally What is initially apparent from this data is the reduction in IT Application Specialist course starts, and a corresponding increase in IT, Software, Web & Telecoms Professional. Also, Social Media and Digital Marketing appears to be a relatively new course, and growing / / / /15 Social Media and Digital Marketing Providing Financial Services Marketing IT, Software, Web & Telecoms Professional IT Application Specialist Design Creative and Digital Media Source: Skills Funding Agency Data Cube 39

40 Change in Digital Tech Apprenticeships, Index 2005/6 = Analysis of Digital Tech type apprenticeship starts since 2005/6 shows that there has been growth in numbers until around 2011 but that this growth has then effectively flat lined. Please note that this analysis uses a less precise definition of the digital tech sector (Information and Communication Technology apprenticeships) as opposed to the previous data cube analysis. Source: FE Data Library, Department for Education New Anglia LEP East of England England 40

41 Norwich Ipswich St. Edmundsbury Forest Heath Suffolk Coastal South Norfolk Breckland Great Yarmouth Kings Lynn and West Norfolk Waveney Mid Suffolk Babergh North Norfolk Broadland Digital Tech sector vacancies across New Anglia, ,000 1,500 2,000 2,500 3,000 3,500 Jan 2012 Dec 2016 Source: Labour Insight Jobs, Burning Glass Technologies According to the Labour Insight Jobs tool, then there were 10,821 postings for the sector in New Anglia between Jan. 1, 2012 and Dec. 31, A further 1,521 postings had the potential to be within the sector but a final judgement could not be made on these due to their unspecified or unclassified nature. The definition for the Digital Tech sector used in this exercise is wider than that previously defined but it still provides us with some useful information on vacancy numbers and types. The definition captures the following industry and sectors: Information & Communication; Advertising and market research; Other professional, scientific and technical activities; Creative, arts and entertainment activities; Libraries, archives, museums and other cultural activities; Repair of computers and personal and household goods. Please note that some caution needs to be applied to this data as results may reflect the way different sectors recruit rather than real differences in the number of jobs. 41

42 Google Iconic Event Strategies Simply Ltd EE Ltd Archant Ltd Daisy Group Telecom Plus Cosine Sanderson Group The Mill Xerox Ltd Oracle Virgin Media BT RSPB Alpha Language Services Sage Group ADOS Solutions Wincanton GFK National Trust Vodafone Group Absolute Interpreting Translations Ltd D A Languages Ltd Serco Group Top Digital Tech Sector Employers across New Anglia, Jan 2012 Dec 2016 Source: Labour Insight Jobs, Burning Glass Technologies Vacancies are often raised by large outsourced service providers and a crosscutting range of traditionally nondigital employers ,000 1,200 42

43 Marketing associate professionals (3543) Authors, writers and translators (3412) Business sales executives (3542) Sales and retail assistants (7111) Sales related occupations n.e.c. (7129) Programmers and software development professionals (2136) Telephone salespersons (7113) Other administrative occupations n.e.c (4159) Market research interviewers (7215) Web design and development professionals (2137) Sales accounts and business development managers (3545) Customer service occupations n.e.c (7219) Quantity surveyors (2433) Graphic designers (3421) Photographers, audio-visual and broadcastign equipment operators (3417) IT business analysts, architects and system designers (2135) Physiotherapists (2221) Marketing and sales directors (1132) Call and contact centre occupations (7211) Managers and proprietors in other services n.e.c. (1259) Financial accounts managers (3538) Digital Tech sector vacancies by occupation, Jan 2012 Dec 2016 IT Source: user support Labour technicians Insight Jobs, (3132) Burning Glass Technologies Source: Labour Insight Jobs, Burning Glass Technologies 43

44 ,000 1,200 Sales Executive Customer Service and Sales Research Interviewer Account Manager Graphic Designer Android Developer Marketing Manager Customer Service Advisor Marketing Assistant Business Development Executive Sales Representative PHP Developer Web Developer Marketing Analyst Retail Salesperson Sales Consultant Assistant Manager Retail Advisor Sales Manager Digital Tech sector vacancies by job title, Jan 2012 Dec 2016 Source: Labour Insight Jobs, Burning Glass Technologies 44

45 Digital Tech sector vacancies by qualification level required, Jan 2012 Dec 2016 Source: Labour Insight Jobs, Burning Glass Technologies 483 Bachelor's degrees, graduate certificates and diplomas GCSEs, Standard Grades, and Level 2 S/NVQs A-Levels, Highers, and Level 3 S/NVQs Level 4 diplomas and certificates, HNCs, Level S/NVQs Foundation degrees and HNDs Post graduate degrees, Level 5 S/NVQs, certificates and diplomas 45

46 ,000 1,200 1,400 1,600 1,800 Sales Customer Service Marketing Sales Microsoft Excel Market Research Marketing Customer Contact Business Development Product Sales Graphic Design Telecommunications Business Management Accountancy Project Management Sales Recruiting Microsoft Office JavaScript Social Media Purchasing Contract Management Telesales Financial Accountancy Promotional Marketing Sales Management Advertising Sales Digital Tech sector vacancies by skills required, Jan 2012 Dec 2016 Source: Labour Insight Jobs, Burning Glass Technologies 46

47 A Future View of the Digital Tech Sector 47

48 Forecasts for change in Digital Tech employment, New Anglia Publishing & broadcasting (EEFM) Telecoms (EEFM) Computer related activity (EEFM) Digital Tech (EEFM) Media (WF) Information technology (WF) Digital Tech (WF) The data presented in this chart is from the East of England Forecasting Model (EEFM) and the UKCES Working Futures data (WF). In each case a Digital Tech sector has been approximated from the sector splits available in each model. In the case of the East of England Forecasting Model then Publishing & broadcasting, Telecoms, and Computer related activity have been summed to arrive at a Digital Tech sector. For the Working Futures data then Media and Information technology have been summed. In both cases, and if we look beyond the dip in employment in the Working Futures Digital Tech sector (which could be a result of the aforementioned SIC code changes described by the Office for National Statistics) then both models forecast fairly flat levels of overall employment in the sector. It is worth noting at this stage then neither set of figures take into account New Anglia LEPs growth ambitions. Sources: East of England Forecasting Model, Cambridge Econometrics; UKCES Working Futures

49 100% 80% 60% 40% 20% 0% Occupational composition of employment in New Anglia s Digital Tech sector over time 5% 5% 4% 4% 4% 12% 10% 8% 7% 7% 8% 6% 6% 9% 13% 22% 23% 23% 22% 21% 30% 33% Digital Tech 37% 38% 39% 13% 14% 15% 15% 16% Elementary occupations Sales and customer service Skilled trades occupations Associate professional and technical Managers, directors and senior officials Process, plant and machine operatives Caring, leisure and other service Administrative and secretarial Professional occupations Management positions, professional and associate professional occupations are all set to maintain the bulk of the Digital Tech sector employment and grow in importance over time. At the same time, skilled trade and administrative occupations are set to decline. A similar pattern can be observed if we look at the same results for the sectors of Media and Information Technology used to create the Digital Tech sector. Source: UKCES Working Futures

50 100% 80% 60% 40% 20% 21% 22% 23% 17% 19% Elementary occupations 20% Sales and customer service 13% 14% 15% 12% 12% 16% 15% 16% Skilled trades 15% occupations 16% 0% Associate professional and technical 0% Managers, directors 2019 and senior 2024officials Information 2014 Technology % Elementary occupations Process, plant and machine operatives Elementary 5% occupations 5% 4% Sales Process, and customer plant 4% and service machine operatives 4% Caring, leisure and other service Sales and customer service 11% 10% 8% Skilled Caring, trades leisure occupations 7% and other service 7% Administrative and secretarial Skilled trades occupations 80% 7% Associate Administrative professional 6% and secretarial and technical 6% Professional occupations Associate 8% 13% professional and technical Managers, Professional directors occupations and senior officials Managers, directors and senior officials 19% 19% 19% 19% 60% 18% 40% 20% 0% 11% 10% 80% 7% 6 8% 13% Information Technology 19% 1 Media 100% 19% 5% 5% 4% 60% 18% 4% 4% 9% 10% 8% 7% 7% 11% 10% 8% 7% 7% 80% 7% 6% 6% 9% 8% 8% 7% 40% 13% 44% 4 13% 11% 7% 6% 39% 19% 36% 19% 19% 9% 19% 11% 60% 12% 18% 20% 33% 33% 29% Media 13% 14% 15% 1 29% 27% 40% 44% 0% 45% 45% 39% 36% % 39% 44% 45% 45% 13% 14% 15% 15% 16% Source: UKCES Working Futures Elementary occupations Sales and customer service Skilled trades occupations Associate professional and technical Process, plant and machine operatives Caring, leisure 50 and other service Administrative and secretarial Professional occupations Information Technology Process, plan Caring, leisure Administrative Professional o

51 Digital Tech Replacement and Expansion Demand by Occupation -1,000 1,000 3,000 5,000 7,000 All occupations Science, research, engineering and technology professionals Corporate managers and directors Business and public service associate professionals Culture, media and sports occupations Business, media and public service professionals Given the baseline projection of a flat level of employment growth seen in the previous section then the net requirement of posts to be filled across the sector is created totally by replacement demand i.e. people leaving or retiring from the workforce. Between 2014 and 2024 then there will be close to 6,000 positions created through retirement that will need filling. However, if we go below the All occupations element and have a look at the top five occupations (based on total net requirement of jobs over the period ) in the sector then we can see that there are elements of expansion demand despite the projected no change in total Source: UKCES Working Futures Expansion demand Replacement demand Net requirement 51

52 50% 40% 30% 20% 10% 0% -10% -20% All occupations Science, research, engineering and technology professionals Corporate managers and directors Business and public service associate professionals Culture, media and sports occupations Expansion demand Replacement demand Net requirement Business, media and public service professionals Replacement and Expansion Demand by Occupation The following chart displays the same information, but this time replacement and expansion demand are displayed as percentages of the total employment by occupation in the sector in This helps to give a sense of churn within the sectors workforce over the next decade. Source: UKCES Working Futures

53 Replacement and Expansion Demand by Qualification, Please note that the Working Futures data uses the following breakout of qualification levels: QCF8 - Doctorate QCF7 - Other higher degree QCF6 - First degree QCF5 - Foundation degree; Nursing; Teaching QCF4 - HE below degree level QCF3 - A level & equivalent QCF2 - GCSE (A-C) & equivalent QCF1 - GCSE (below grade C) & equivalent No Q - No Qualification Source: UKCES Working Futures , ,000 2,000 3,000 4,000 5,000 QCF 7-8 QCF 4-6 QCF 3 QCF 2 Expansion Demand Replacement Demand QCF 1 No Qual The UKCES Working Futures data also enables us to consider levels of future replacement and expansion demand in terms of the levels of qualifications that will be leaving and required in the workforce as it changes over time. As we can see from the chart, positive replacement and expansion demand within the Digital Tech sector is going to be dominated by the demand for a first degree level of qualification. 53

54 17% No Digital Tech Sector Employment Change by Qualification Level 13% (including TechEast job creation target) 44% 17% 13% 59% 44% 16% 17% 21,100 jobs QCF No Qual 2 QCF % % 15% 16,600 jobs 8% 17% QCF 31 10% QCF % 6% No Qual 17% No Qual 44% % 13% % QCF % QCF 1 8% QCF 1 10% QCF % 59% QCF 2 44% 16% 17% 6% No Qual QCF % % QCF % QCF 1 QCF 3 16% 8% QCF 3 10% QCF 7-8 QCF % 17% 6% No Qual 44% 15% 9% QCF 2 13% 59% 8% QCF % QCF % % 6% QCF 1 8% QCF 3 10% % 2024 QCF % 16% Source: UKCES Working Futures QCF 2 59% QCF % % 8% QCF 3 The TechEast target of 5,000 jobs 10% includes job creation in Cambridge. QCF % 6% If we break this target down, based on employment in each of TechEast s constiuent areas, then the target for New Anglia comes out at 2,237 jobs by QCF If we 4-6push that jobs target forward to 2024, bringing it into line % with the Working Futures data % we are using to estimate replacement and expansion demand, then this target reaches approximately 4,500 jobs (please note that 8% in total target calculations 10% QCF this figure 7-8 is rounded to the nearest thousand i.e. 4,000). Given that forecasts for employment in the sector 6% show that growth will be in those jobs with higher level qualifications (QCF 4 and above), there will be less roles in lower qualification roles, and we can assume that any additional job creation in the sector will be in those 2014higher skilled roles as well QCF 1 No Qual QCF 2 QCF 1 QCF 3 54

55 Digital Tech Sector Replacement and Expansion Demand by Qualification Level These two charts are presented to show forecast change in the Digital Tech workforce over the period from when the TechEast job creation target came into affect (2017) and the latest date of Working Futures data (2024) used to procude this analysis. Job creation and loss by qualification level, (Replacement Demand) 10% 15% 16% 44% 13% +4,000 jobs 0 + Job creation and loss by qualification level, (Expansion Demand) -2,000 jobs +2,000 jobs - 0 No Qual QCF 1 QCF 2 QCF 3 QCF 4-6 QCF Source: UKCES Working Futures

56 Views from Sector Stakeholders 56

57 Key findings from stakeholder consultation: Key Issues/Challenges - The feedback we have had from SMEs within the Digital Tech sector is that the main demand for recruitment comes at graduate level, with most employers favouring graduates with around 2 years of experience. There is some reticence to take on newly qualified graduates with employers recognising employability and competency as being as equally important as a qualification; - Therefore, more needs to be done to ensure employability is developed through schools, FE colleges and University. UEA, NUA and UCS have schemes in place that could be developed further through school engagement; - The retention of talent (graduates) is a challenge, with Norwich in particular more likely to see graduates leave the area for employment elsewhere (particularly London). Norwich has a strong digital creative presence and the recent activity to raise the profile of the sector (SyncNorwich etc) needs to be capitalised on by profiling the depth and value of the sector and the careers it offers. Ipswich s presence in telecoms & software engineering (at Adastral Park) and the Innovation Martlesham activity are key drivers for competitive advantage for the region too and the place marketing strategy for the area needs to make careful reference to the skills supply and offer for startups, growing SMEs and inward investment. There is also a strong need to engage with schools to inform the career choices of young people on this basis; - The FE sector and independent training base has great potential to collaborate through a joined-up offer but from an employer perspective their profile is relatively low, with businesses more likely to train internally or seek technical training outside of the area. Pursuing greater flexibility of the adult skills budget could enable a far more responsive post-16 skills response, with the Local Authorities able to influence the match between training provision and need; and help the skills offer become more accessible to SMEs; - Developing a leadership and ownership function to take forward the skills strategy is of paramount importance- given the need to represent the demands of the industry and engender a more joined-up and responsive skills offer. Ownership that demonstrates the investment the sector is prepared to make in skills can act as an important catalyst for extra resources linked to skills reform and technical excellence - such as highlighted in the Industrial Strategy and made available through New Anglia LEP s Skills Deal programme. Key Skills Shortages - Multi-application software design/language coding; - Cloud based platform enterprise architecture and development; - AWS and Azure- cloud based transitioning and development; - App development for mobile solutions; 57