The UK risks falling behind the EU as growing concerns over digital skills shortages see businesses struggling to recruit talent across the UK’s major cities.
The European Commission has launched three new Digital Skills Academies focused on artificial intelligence, quantum technologies and virtual worlds. Funded through the Digital Europe Programme, the academies will provide specialist training in critical technologies as part of the EU’s wider strategy to strengthen digital talent and support long-term competitiveness. The initiative builds on more than €294 million already invested through the Digital Europe Programme to support digital skills development across areas including AI, cybersecurity, cloud and data.
Meanwhile, new research suggests the UK’s digital skills gap continues to widen. A survey of more than 2,000 London business leaders found that half believe their workforce lacks the skills needed to meet the demands of AI adoption, while 15% reported significant skills shortages – the highest level recorded by the annual survey.
Among organisations experiencing skills gaps, 60% cited shortages in advanced digital skills and 23% reported gaps in basic digital skills, reinforcing concerns that workforce capability is becoming a growing barrier to business growth, innovation and productivity.
Sheila Flavell, CBE, COO of FDM Group, said: “The UK has battled a serious digital skills shortage over the last few years. Today, that challenge has pivoted to an underutilisation of skills. A generation of highly skilled graduates are being put into roles that are grossly mismatched to their potential. This underemployment is causing both personal frustrations, as well as impacting long-term business growth.
There is a fundamental misalignment between what universities teach and the skills employers need on day one. Until we close that gap, we’ll continue to see talented people locked out of the careers they’ve trained for.”
Richard Bovey, Chief for Data at AND Digital, commented: “AI tools are increasingly being embedded into small and midsize businesses as they work to stay competitive, however, this rapid shift means digital skills are no longer a ‘nice to have’, but critical for business growth. When employees and business owners have accessible ways to build confidence with essential AI and digital tools, it puts them in a much stronger position to thrive in today’s workplace.”
Industry experts have also warned that the UK’s technical skills shortage is not simply a recruitment challenge but reflects weaknesses in the education-to-employment pipeline, with clearer technical pathways needed to help develop future digital talent. As Europe accelerates investment in digital capability, the latest developments raise important questions about how the UK will strengthen digital education, improve media literacy and build the workforce needed to support its own digital ambitions.
Elizabeth Anderson, CEO of the Digital Poverty Alliance, commented: “Digital transformation is only as strong as the people able to participate in it, and today too many individuals lack the skills and confidence needed to fully engage with an increasingly digital society.
“Our recent Media Literacy Report found that 40% of people do not know what an algorithm is, 43% are unaware that algorithms shape the content they see online, and 90% had never heard of a large language model (LLM). At the same time, just 23% reported receiving any form of media literacy education, despite digital platforms playing an ever-greater role in how we learn, work and access public services. These findings demonstrate that the UK’s digital skills challenge extends far beyond coding or technical expertise; it is about equipping people with the critical digital literacy needed to navigate the modern world safely and confidently.
“Digital exclusion impacts 19 million people across the UK and addressing this means tackling more than digital access, but the required skills to fully reap the benefits. Investment in infrastructure, AI and emerging technologies must be matched by sustained investment in lifelong digital education, ensuring that no one is excluded from the opportunities of the digital economy because they were never given the skills to participate.”
