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The challenges facing the UK's digital economy: an insider's perspective

Not long ago, ITProPortal ankled up to Newport, Wales for Digital 2013. In addition to taking in a fascinating conference headlined by a keynote speech from Sir Terry Matthews, we got the chance to sit down with a range of key UK IT industry figures. One was Tom Kelly, chair of the Welsh government's ICT sector panel and a driving force behind the Digital 2013 event. Steadfast in the belief that Wales has all the necessary ingredients to become a focal point of Britain's wired economy, Tom opined on some of the issues facing the sector going forward - specifically, the shortage of digital skills and the problems facing startup ventures. Without further ado, let's hear his thoughts.

"Wales needs 18,000 additional ICT people"

"The [ICT] sector panel was set up by the Welsh government in 2010 alongside about five to six other sector panels. The marketplace is definitely SME - the S bit of SME and the micro bit of SME. We spent an immense amount of time trying to get a handle on the size of it - in terms of the number of companies, the number of people, and the size of the growth. We eventually got a fairly good feel on that, but I wasn't convinced that the quality of the businesses was good enough, nor was I convinced that the people within the sector were looking to see what was out there.

"So, what I decided to do was to put the event on and one of the things that I wanted was for people to come and hear from the big boys – the IBMs, the Ciscos, the HPs. I wanted them to see where they were putting their investments now and where they as businesses would be deriving their profitability from in three to four years time - a very good clue as to where the ICT sector in Wales should also be looking to invest. When I began to look around at the wider UK, I can honestly say that there is no other event like this - no other event where the giants within the sector come together to say: 'This is where we are going, this is our view of the sector, this is where there is an opportunity for you.'

"ICT as a sector is very much a cross-sector - we have got influence in terms of manufacturing, life sciences, finance. We all know that within the ICT sector, there are more opportunities than there are people to fill the jobs. It's very particular in Wales, where there's going to be a need over the next five years for 18,000 additional ICT people to come in. Currently, we have no idea where those people are coming from. If we could get those in, we could actually double the value of the ICT sector in the economy.

"I think one of the very obvious things when you look in the room is the lack of diversity in terms of men and women [and] I also think age. It's absolutely critical that next year we work with the FE colleges and secondary schools and universities. Ideally, I would like 100-200 people in the room challenging what's being said and being part of the panel to ask questions. Because the future of Wales doesn't rest with people of my age. It rests with the people in the schooling system at the moment."

"The money coming from the EU is not finding its way to the needy"

"One of the biggest issues that young companies have is that they run out of money, or they can't get access to finance. That in my view is related to the ability to attract a mentor. The mentor doesn't have to be an old guy with gray hair. But the mentor has to be there to question. Do what the Japanese say: they reckon if you ask 'why' five times, you eventually get to the kernel of the question. But in the Western world, you can only ask 'why' four times before the aggro begins to kick in.

"Within the government environment, there are facilities there for business support – for the generation of jobs, for education, for training, for inward investment. That inward investment may well be a loan. In the wider UK, there is not a shortage of money. You can get it once the business is there, but the business case I don't believe is being made in Wales as well as it can be because of the lack of mentors. We need people who have made a good living to be asked to come back and give something back into the community. The majority of people I know, if they're asked, 'will you come and talk to some people who are trying to kick a job off, will you give us some assistance in terms of how we pitch for a deal which potentially we shouldn't win' will freely give up their time. The key is getting them to realise – the older individuals – that they've got the experience and this is something they should give.

"We need to see whether we can get the people with the knowledge and the people with the dreams and aspirations to come together and meet, because there is money available within Wales and the government. There's an immense amount of money available from the EU, but I do fear that some of the money coming in from the EU is not finding its way to the needy. Not the needy in terms of people who are scrimping around, but people who've got the ideas [and] are willing to challenge the status quo."

"The ingredients are there"

"I believe government can have a very positive intervention. If I can give you an example: in the back end of the 1960s, the Irish government realised the only way they were going to get out of the agricultural background that they had was to completely change the education system. They had some people there who were intelligent enough to see where the overall economy was going - to see what they had to do to set Ireland up in a way that as the money was coming over the Atlantic, it would land in Ireland and actually stay in Ireland from an investment point of view. And Ireland actually got a very high, disproportionate amount of inward investment from the US and elsewhere, relative to its size, because it put the ingredients in place in terms of education, grants, and a tax system.

"Wales is limited by its ability to change the tax rates, but the tax rates within the UK are getting better. You do have people within government now who have been on the private side, who've [now] gone back into government to make a change. I do believe the ingredients are there. We've come across instances where companies have come to the sector panel and said, 'we're getting nowhere' with something, and we've said, 'put the application in again' and we've monitored it to check there are no blocks being put up. We can't do that for everyone, but the government and the system does know that we are keeping a watch on what's going on."