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As digitization continues to disrupt industries and organizations look to transform their operations to compete, the need for people with the necessary digital skills is growing in importance.

In a global report commissioned by Telstra called Connecting Commerce, the Economist Intelligence Unit found that although 73 percent of respondents in San Francisco and 61 per cent in New York believe their educational institutions are effective at preparing people with the right digital skills, the supply of talent is not keeping up with the growth in demand. These results were based on a survey of 2,620 executives in 45 cities, including three in the U.S. (Chicago, New York and San Francisco), and assessed the confidence of business executives in their city’s digital environments.

Similarly, U.S. universities dominated this year’s Times Higher Education World University Rankings with seven schools in the top ten. Even so, the U.S. is facing a digital skills shortage as new technologies mature and are assimilated faster today than ever before.

Digital skill shortages are a challenge for businesses around the world

It’s not just a problem facing the U.S. Skills gaps are among the two toughest challenges firms around the world face in pursuing their digital transformation, along with financial constraints, according to the Connecting Commerce report. Although specialized programs in data engineering and analysis are increasingly common at universities, more than 40 percent of respondents globally think their city’s educational institutions are at best, only partly effective at training people with the digital skills needed to implement their digital transformation programs. With cyberthreats continuing to be a constant concern for businesses globally, it’s fitting that respondents named digital security the most critical skill needed, followed by big data analytics.

Supply versus demand

The spike in demand for digital talent is due, in part, to changing technology adoption patterns as new technology lifecycles speed up and products mature. Take for instance the rapid development of the Internet of Things (IoT) around the world, to the tune of eight billion independently connected devices. Just eight years ago, less than one billion devices were connected.

Given how quickly technology is evolving, it’s becoming essential for businesses to recruit and retain people with the know-how and confidence to adapt as new innovations unfold.

Exacerbating the supply issue is the fact that businesses across all industries are now competing with the leading technology companies for their digital talent as they look for people with the capability to lead their digital transformation programs or oversee their businesses network infrastructure – all in pursuit of a competitive edge.

Initiatives for the future

In the U.S., there’s even a perceived shortage of digital talent within cities with strong innovation reputations like San Francisco. According to Zac Bookman, Co-Founder and CEO of OpenGov, “It is hard to recruit [in San Francisco] because there is a shortage in the order of tens of thousands of highly skilled engineers”.

Encouragingly, in recent years there has been a greater focus on equipping the next generation with foundation digital skills. A report by Google in 2016 found that 40 percent of U.S. schools are now offering coding classes with the governments of New York, Los Angeles and Chicago all pledging to offer computer science classes to over one million students by 2020.

Stakeholder collaboration is key

A starting point for making sure the education system can meet the skills needs of companies is for there to be a good understanding of what those needs are. For this, a degree of consultation needs to take place between educational institutions and businesses. This is where there is room to improve. Just over half (53 percent) of all executives surveyed in the Connecting Commerce report confirmed that such consultations are taking place between firms and educational institutions. Here, we can all work together to build a workforce that’s equipped to shape America’s digital future.


This article first appeared in ChannelVision magazine.