By Eva Perkins | Thought Leadership in Workforce Transformation
The UK’s Invest 2035 Industrial Strategy is a step in the right direction. It lays out a vision for growth, targeting high, productivity sectors such as AI, clean energy, financial services, and digital technologies. It rightly identifies barriers to investment and productivity, particularly around skills shortages and innovation adoption.
However, while it emphasises funding, infrastructure, and trade, there is a critical piece missing a clear, long, term workforce transformation strategy that ensures the UK has the right talent to sustain this growth.
For the UK to truly become a world leader in digital transformation, it must take a fresh approach to skills development, workforce agility, and diversity in hiring. This is not just a government responsibility; businesses need to play a bigger role in shaping the future of tech talent.
The challenge is significant, but there are lessons to be learned from Europe, where countries have successfully aligned skills training, industry needs, and workforce inclusion. If the UK wants to remain competitive, we need to rethink how we develop, train, and hire for tech roles, and look beyond traditional education models to create a more adaptable, inclusive workforce.
The UK’s Workforce Challenge: What’s Holding Us Back?
The Invest 2035 strategy acknowledges that the UK’s productivity and economic growth are constrained by a lack of skilled workers, particularly in the digital sector. Some of the key workforce challenges include:
1. Persistent Skills Gaps in High, Growth Sectors
• Digital transformation is outpacing skills development, businesses are struggling to find workers with the expertise needed in AI, cybersecurity, software development, and data analytics.
• 68% of UK businesses report difficulties hiring for tech roles (BCS, 2023), and the World Economic Forum estimates the UK could face a shortfall of 1.5 million digital workers by 2030.
• Despite this demand, the education, to, workforce pipeline is slow, it still relies heavily on university degrees and traditional training models, which do not always align with industry needs.
2. A Talent Pipeline That is Too Narrow
• Only 12% of A, Level students in the UK take computing, far below the levels seen in Germany and the Netherlands.
• The UK’s reliance on formal education as the primary route into tech careers excludes many talented individuals who could thrive in alternative pathways such as apprenticeships, bootcamps, and employer, led training programs.
• SMEs in particular struggle to access digital skills training, meaning the UK’s productivity gap outside of London continues to widen.
3. Barriers to Diversity and Inclusion
• The UK’s tech workforce remains predominantly male (81%) and white (85%), despite widespread recognition that diverse teams drive better innovation and business performance (McKinsey, 2023).
• Degree requirements and traditional hiring practices often exclude career changers, self, taught programmers, and individuals from underrepresented backgrounds.
• Countries that have removed strict academic barriers and promoted skills, based hiring, such as the Netherlands and Germany, are seeing greater workforce diversity and higher productivity.
Without a serious rethink on skills and workforce development, the UK will struggle to compete with countries that are investing in smarter, more agile approaches to training and hiring.
How Europe is Building a More Resilient Tech Workforce
Across Europe, governments and industries are working together to future, proof the workforce. Here are two case studies that highlight successful strategies the UK could adopt:
Germany: Employer, Led Apprenticeships and Skills, Based Hiring
Germany’s dual education system is often cited as one of the most effective workforce development models in the world. It bridges the gap between education and industry, ensuring that companies have a direct role in shaping training programs.
✔ 42% of Germany’s tech workforce comes from vocational and employer, led training, compared to just 23% in the UK.
✔ Employers work directly with education providers to design apprenticeships that align with real, world job demands.
✔ The country produces 30% more AI specialists per capita than the UK, largely due to industry, driven skills initiatives (European Commission, 2024).
What the UK can learn:
• Expand employer, led apprenticeships in tech, allowing companies to train talent in, house rather than relying solely on graduates.
• Make vocational training a mainstream option, rather than an alternative for those who do not pursue degrees.
• Shift to skills, first hiring model, German companies prioritise technical skills over academic credentials, which has led to a more diverse talent pipeline.
The Netherlands: Removing Degree Barriers & Upskilling the Workforce
The Netherlands has taken a different but equally effective approach, dropping degree requirements for tech roles and investing in continuous upskilling
✔ 80% of Dutch tech employers no longer require a university degree, focusing instead on skills, based hiring.
✔ The country has Europe’s highest female representation in STEM careers, supported by targeted reskilling programs.
✔ Companies like ASML and Booking.com actively recruit from bootcamps, apprenticeships, and alternative training providers, rather than relying on traditional graduate schemes.
What the UK can learn:
• Encourage businesses to drop unnecessary degree requirements, this has led to a more inclusive and diverse workforce in the Netherlands.
• Invest in reskilling and lifelong learning, Dutch employers receive financial support for reskilling programs, allowing workers to continuously upgrade their skills.
• Develop industry, backed bootcamps, companies work directly with training providers to ensure graduates are job, ready.
Both Germany and the Netherlands recognize that a fast, moving digital economy requires a fast, moving workforce strategy. The UK must take a similar approach, ensuring that training, hiring, and career development models are built for agility, inclusion, and long, term growth.
A Smarter Workforce Strategy for the UK
So, what would a stronger, more future, focused workforce plan looks like for the UK? Based on global best practices, three key actions stand out:
1️. Make Employer, Led Training the Standard, Not the Exception
• Expand tech apprenticeships and employer, designed training programs, using Germany’s model as a blueprint.
• Incentivise businesses to invest in upskilling, ensuring workers can continually adapt to technological change.
• Use the Growth and Skills Levy to fund alternative training models, including bootcamps, micro, credentials, and industry, specific certifications.
2️. Remove Unnecessary Degree Barriers
• Encourage tech companies to move toward skills, based hiring, as seen in the Netherlands.
• Create pathways for career changers, self, taught coders, and non, traditional learners to enter tech roles.
• Help SMEs access digital skills training, reducing regional disparities in workforce capabilities.
3️. Invest in Diversity, Driven Skills Initiatives
• Introduce targeted reskilling programs for underrepresented groups in tech.
• Support flexible learning options, such as part, time bootcamps and online certifications.
• Ensure government funding is accessible to diverse learners, not just those on traditional university tracks.
Final Thought: A Workforce Strategy Built for 2035
The UK has the potential to be a world leader in digital transformation, but it won’t happen unless we redesign the way we train, hire, and develop talent.
Instead of relying on slow, moving education models, we need fast, employer, led, skills, first solutions. Instead of talking about diversity, we need hiring systems that actively remove barriers.
The future of the UK’s digital economy depends on the choices we make today. It’s time to do things differently.
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References:
1. Digital Skills Gap in the UK:
• A 2023 report by BCS, The Chartered Institute for IT, highlighted that there are approximately 756,000 potential workers missing from the IT industry, indicating a significant skills shortage.
2. Diversity in the UK Tech Workforce:
• According to BCS’s Diversity Report 2024, 21% of IT specialists in the UK are from Black, Asian, and Minority Ethnic (BAME) groups.
• The same report indicates that women represent 20% of IT specialists in the UK.
3. Diversity and Innovation:
• A McKinsey report from 2023 found that companies with diverse tech teams outperform their competitors by 35% in innovation metrics.
4. Tech Workforce Growth:
• The CompTIA State of the Tech Workforce UK 2023 report noted that the UK tech workforce grew by approximately 75,280 net-new positions since 2017, reaching over 2 million workers in 2022.
5. Gender Representation in Engineering and Technology:
• EngineeringUK reported a decline in the number of women working in engineering and tech, from 16.5% in 2022 to 15.7% in 2023, equating to 38,000 fewer women in the sector.
6. Ethnic Diversity in Tech:
• A report by WeAreTechWomen highlighted that while 25% of tech workers identify as an ethnic minority, representation in senior roles drops to 13%.
7. Women in IT:
• BCS has calculated that, based on trends from 2005 to 2022, it would take nearly three centuries for the representation of women in the IT workforce to reach the average representation across the whole UK workforce.