The Nash Squared Digital Leadership Report, in collaboration with CIONET has found that despite 90 per cent of digital leaders in the UK expecting an economic downturn, tech spend this year is set to grow at its third fastest rate in over 15 years. The world’s largest and longest running survey of senior technology decision makers has found over half (52 per cent) of digital leaders in the UK expect their technology budget to rise, and only around 1 in 7 expect their budget to fall.
The survey found UK investment has slowed in emerging tech like AI, RPA and Big Data, threatening opportunities to innovate through global economic instability. However, investment remains strong in cloud technology (67 per cent reporting large-scale usage in the UK).
Amidst the huge investment in the cloud, over a third (41 per cent) of digital leaders in the UK are reporting that the cloud is creating security headaches due to the complexities it can create, especially for large, distributed organisations. Almost half (44 per cent) of the largest organisations in the UK (total IT budget >$250m), report a major cyber attack in the last two years. Meanwhile, global unrest and a growing awareness of the politicisation around cyber warfare has led to almost half of digital leaders in the UK (45 per cent) fearing an attack from foreign powers – shooting up from just 12 per cent in 2018.
The report also found:
• Shortage of cyber talent continues to be a significant issue for digital leaders – Cyber continues to be one of the most sought after technology skills in the UK. A DCMS report in 2021 found that the UK’s cyber security recruitment pool has a shortfall of 10,000 people a year. This shortage and the increasing cyber threat has left only a third (32 per cent) of digital leaders in the UK feeling confident they have all reasonable risks covered.
• The war for talent, and keeping pay demands reasonable, emerges as a big chal-lenge – 68 per cent of digital leaders in the UK state that a skills shortage prevents them from keeping up with the pace of change; the largest proportion ever recorded. 57 per cent think that UK organisations will never have enough technology staff and almost two thirds (63 per cent) feel that the rising cost of living has made salary demands unsustainable.
• Government policies aren’t working on tech skills – A staggering 78 per cent of digital leaders in the UK feel that government’s policies are completely ineffective at tackling the tech skills shortage. This compares unfavourably to Asia where the figure is almost half, at 41 per cent.
• Robots, a way to plug the gap in the tech talent market – On average, digital leaders in the UK plan to use digital labour to automate around 1 in 7 (14 per cent) of their workforce over the next five years.
• Hybrid/Remote working boosts women in tech and access to global talent – Hybrid working is now commonplace in tech, with 2 to 3 days a week in the office the aver-age requirement. This is starting to help have a positive impact on the number of women in the UK’s tech sector: female leaders are up to 15 per cent in the UK (from 12 per cent in 2021), almost a quarter (23 per cent) of the tech team is now female, and 27 per cent of new hires in the last two years have been women. The pipeline is slowly but surely improving. The report also found that a quarter (25 per cent) of digital leaders say that remote working has enabled them to start recruiting talent from overseas.
“Economic headwinds are gathering and indicators are turning negative – but despite or even because of this, UK businesses know that investment in technology remains crucial,” said Bev White, CEO of Nash Squared, “Both to maximise the efficiency of what they al-ready have and to become more agile and responsive in highly unpredictable conditions, technology is the key enabler. But while technology investment intentions stand at their third highest level in over 15 years, nevertheless there are signs that some businesses are reining back on investment in areas like AI and Big Data. The reasons for this are understandable, but organisations should be careful not to cut back too deeply – they run the risk of falling too far off the pace to catch up again, leaving a long-lasting dent to their competitive positioning.
“Meanwhile, another area that truly demands ongoing investment is cyber security.,” she added. “The threat environment is highly charged, and the rise in concerns about foreign power activity is striking. The world has become a more dangerous place in 2022. UK businesses must take robust defensive steps accordingly.”
With investment intentions remaining high and 56 per cent of organisations in the UK expecting to increase their technology headcount in 2023 against a backdrop of widespread skills shortages, Bev White, CEO of Nash Squared, added: “Businesses run on people – but the UK’s technology sector simply can’t find enough of them. While the skills shortages afflicting the sector are nothing new, it’s a concern that they’re worsening rather than get-ting better. However, what we see in our research is that organisations are taking innovative steps to ease the challenges – redesigning their employee offers to attract talent and, increasingly, looking beyond our own borders to access bright minds internationally, working remotely. They’ve also been increasing their efforts to attract more women into tech. I am heartened to see progress here: the industry is inching towards the better gender balance it so badly needs.”
