UK needs to find its 'high-end' IT niche

The UK needs to concentrate on the "high end" of the IT industry if it is to find its niche, delegates said at the launch of a report into the country's knowledge economy.

The report, Delivering i2010: Ensuring the Right Conditions for an Innovative, Inclusive & Competitive UK Knowledge Economy, was launched on Wednesday at the Department of Trade and Industry (DTI). It follows on from a European Union drive to stimulate development in the ICT industry across the continent, and was drawn up by an "Information Age Partnership" working group, including representatives of government and industry and chaired by Microsoft.

Noting that the UK recently dropped out of the global top five nations in terms of innovation — a list based largely on patent applications — the report calls for a "national strategy" to entice young people into the industry through education and diversity, as well as improving the image of the industry and extending tax credits for companies investing in research and development in the UK.

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It also calls for greater co-operation between government and industry — a development which is gaining traction through the work of e-Skills, the ICT sector skills council.

"We do need pure researchers — we should celebrate the geek — but, at the same time, we need people to bring technology and design together in a way that is more consumable," said Matthew Bishop of Microsoft. He pointed out that design was generally a "less male-dominated" industry, and said that encouraging this segment would help "celebrate the diversity needed to bring the [IT] industry forward".

"Base programming skills are being produced in a high quantity in the developing world," he continued, suggesting that the niche for the UK should also be based in the areas of "creative skills", research and "blending technology skills with management".

David Evans of the British Computer Society (BCS) stressed a similar theme, arguing that outsourcing was not in itself the threat to the UK IT industry that many imagine. "Badly done offshoring leads to disasters, but good offshoring doesn't necessarily mean a smaller workforce," he told ZDNet UK. Offshoring basic development reduces the fundamental cost of IT investments, thereby increasing return on investment and encouraging further investment, Evans said.

"From our point of view, we do have people being kicked out of their jobs but, overall, if you look at the IT industry, economically it hasn't been suffering," said Evans. Referring to a "segmentation problem", he noted that offshoring worries "depend on what kind of people we are talking about".

"If we were [just] turning out programmers, I would agree [that there is a problem]," Evans said, but he argued that the "high end" of the industry, where there is a skills shortage, remained an opportunity.

"The thing that threatens long-term competitiveness is a lack of skills, not international competition," Evans added. "That misunderstanding [that offshoring is killing IT] would definitely kill it."

The next stage in the work of the i2010 working group will be a meeting in June, to which Margaret Hodge, the minister of state for industry and the regions, has invited Stephen Timms, of the Treasury, and Bill Rammell, the minister of state for higher education. That meeting will particularly address issues such as improving the image of the ICT industry and attracting more young people to choose the industry for their vocational development.