Memorandum 24
Submission from Microsoft
1. Summary: The IT industry is a significant
contributor to the UK and faces the same skills shortage issues
as other STEM related industries. Despite the growing skills gap,
ICT & computing are excluded from most STEM initiatives, including
ELQ allocations, as IT & computing is not considered by Hefce
to be Strategic, Important and Vulnerable (SIV). This is not in
the economic interests of the UK as it constrains the growth of
the UK IT industry and other industries dependent on IT for increased
productivity and should be reviewed by Hefce in the light of current
market and student number data.
2. The IT industry is a significant contributor
to the UK economy. It employs 1.4 million people and represents
7% of GDP. Furthermore it is expected to grow by 140,000 people
and create 4,600 new businesses by 2011.[31]
In addition to its direct impact, the use of IT by other organisations
increases their productivity, indeed the EU estimates that 50%
of potential productivity gains come through the use of IT in
the workplace.[32]
Microsoft employs only 2,500 people in the UK, yet over 500,000
people in this country are employed in developing, delivering
and supporting Microsoft based solutions.[33]
3. However, there is a chronic shortage
of skills in the IT industry which acts as a potential brake on
growth. At the same time that the industry is growing steadily,
the numbers of students starting undergraduate courses in computing
and IT has fallen by around 9% per year.[34]
Microsoft's network of 15,000 IT delivery partners are also reporting
increasing difficulty in recruiting qualified staff.
4. Yet despite this, computing & IT
is not considered by Hefce to be a strategic, important &
vulnerable subject (SIV). Whilst STEM subjects, from which the
IT industry draws heavily, were classified as SIVs in general,
"e-skills" were specifically excluded on the basis that
Hefce had not seen evidence of vulnerability.
5. SIVs are given a specific allocation
of places on ELQ courses in order to provide a degree of protection
but computing and IT therefore receives no such protection. As
the IT industry is a young industry, the retraining of people
with older qualifications is an important route through which
new talent is brought in. We accept the principle that the government
should not in general be supporting serial graduates, such as
a graduate historian studying for a classics degree, on the grounds
that there is little economic impact. However, we find it difficult
to understand why a graduate studying for a biology degree leading
into the pharmaceutical industry should be supported when a graduate
studying computing or ICT leading into the IT industry should
not.
6. Of course, employer co-funded courses
would still be eligible for support and we encourage their uptake
within the industry. However, if they were the solution to skills
gap issues then we would expect the same approach to apply to
other STEM subjects.
7. The exclusion of IT related subjects
from the SIV classification leads to a number of other damaging
consequences for student funding and many STEM related initiatives.
However, the limitation on the retraining of graduates into the
UK IT industry that is short of skills when IT is geographically
mobile and particularly vulnerable to overseas competition is
a particular threat.
8. Microsoft proposes that the Select Committee
asks Hefce to review the exclusion of ICT & computing from
the SIV classification in the light of recent student information
and market data. This would then allow IT & computing to benefit
from the same status as other STEM subjects within ELQ and other
policies and initiatives to protect the UK's STEM base.
January 2008
31 IDC (2007) Back
32
EU e-skills study Back
33
IDC (2007) Back
34
Hefce data (2002/3-2004/5) Back
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