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Thursday, 23 March, 2000, 12:59 GMT
Europe tackles IT skills shortage

The shortage of skilled workers could be costly
European Union leaders might be committed to making the EU an e-commerce powerhouse, but they will need to overcome a major hurdle to achieve that goal.

There is a serious shortage of skilled information technology workers in Europe, which major companies fear could slow economic growth.

Leaders at a special e-commerce summit in Lisbon believe Europe should be challenging the United States, and they are looking at ways of creating new businesses and jobs.

Filling those jobs with the right people might not be easy.

According to research by International Data Corporation and Microsoft, Europe will be short of about 1.7 million information technology workers by 2003.

Unless more people are trained up, the research suggests, the projected internet boom could be severely hindered.

Gerhard Schroeder
Gerhard Schroeder: "Green card" scheme in Germany
Germany is already addressing the problem by announcing a plan to grant work permits to 20,000 non-EU nationals.

The US-style "green card" scheme is opposed by German trade unions, but Chancellor Gerhard Schroeder believes each foreign computer specialist allowed into the country could generate several new jobs.

"We ought to get to grips with this now and then see how it works and draw conclusions," he said.

And in his Budget this week, UK Chancellor Gordon Brown said work permit rules would be changed in areas where there was a global IT shortage.

Gap set to widen

Action is certainly needed. Last year, Europe had about 9.47 million IT vacancies and only about 8.61 million suitably qualified people to choose from.

That skills gap of 9% is set to widen to 13% over the next three years.

The UK will be one of the hardest hit in Europe as it is expected to lack 14% of the workers it needs.

This shortage could bid up earnings for those suitably qualified, leading to inflationary pressures it would be very difficult for the government to control.

The UK has witnessed strong growth in internet usage as its service-driven economy lends itself to conducting business electronically.

Germany is expected to experience an acute skills shortage by 2003, given that it is predicted to be at the heart of the internet economy.

Nordic countries have led the way in adopting new technology, so while they too will lack trained staff, they will also be quick to develop less labour-intensive technologies.

Missed opportunities

The lack of skills means that European companies will miss out on new business opportunities.

This could cost European business about 100bn euros between 2000 and 2002, separate research from Datamonitor suggests.

Trained IT workers will be able to command high salaries, in effect putting themselves out of the range of small businesses, who can benefit from e-commerce.

Europe is also missing the chance to increase its share of high wage earners.

Governments lose out as they cannot collect a potential 60bn euros of tax revenues.

Many analysts agree that the internet boom could revolutionise the European economy. It could boost GDP in the EU by 1.5% through 2002, Datamonitor said.

If projects are put on hold because of a lack of the right people, then the door is left open for non-European companies to gain a competitive edge.

Where are the jobs?

According to Datamonitor, the jobs exist in all areas of e-business from Java programming and web hosting.

"There is no magic bullet solution to the IT skills gap," admitted Doug Wilson, director at Datamonitor.

He adds that action needs to be taken before "any long-term economic damage results".

The solution is for business, academia and government to work together, Clare Curtis, Microsoft UK's skills manager said.

One solution for IT companies is to take on unskilled workers and train them up.

IBM trains up non-IT graduates
"We don't have enough people in the pipeline to fill the vacancies," Rebecca George, European recruitment manager at IBM said, adding that about 50% of the graduates they employ have no IT background.

"We take a lot of people with non-IT skills and train them up," she said.

"We [the industry] have got something like 50,000 IT vacancies in the UK and something like 18,000 graduates coming out of university."

While Ms George thinks the skills gap could slow the growth of e-business, she points that for such a business to succeed, skills other than IT are also important.

"You need people to write the code [but] you need lots of people to be involved - e-business pulls together all kinds of people to work in collaboration."

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29 Nov 99 | Business
E-business: opportunity or peril?
17 Sep 99 | The Economy
Internet engineers crisis warning
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