New technologies drive new jobs in Scotland and UK regions

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PwC’s latest UK Economic Outlook (UKEO) says that around 6% of the UK workforce now work in jobs which didn’t exist in 1990. These range from software engineers and database administrators to programmers and IT support workers.

In London, close to one-in-ten workers are employed in these new ‘digital’ jobs, followed by Scotland, East Anglia, Yorkshire and the South-West with around 5.8%.

The report also reveals that Scotland is ahead of some of the other regions like parts of the North of England, Manchester, Wales and Merseyside.

The research was prepared in association with Dr Carl Benedikt Frey of the Oxford Martin Programme at Oxford University and highlights a shift in the UK workforce towards highly skilled professional and technical roles linked to overall economic performance in major UK regions and cities.

What the research calls ‘skilled cities’ have tended to show stronger employment growth and a healthier trend in unemployment rates since 2005 and a higher rate of new business creation.

The UKEO research says that the best preforming regions can expect the overall workforce to grow, reflecting their ‘skilled cities’ status, with the forecast suggesting that the Scottish workforce should grow by 7.2% over the next decade; this is above the UK average of 6% and the fifth largest growth outside of London. The forecast also reveals that the former Strathclyde region alone is expected to grow by 5.5% – a move that perhaps reflects the regeneration in the area and the Glasgow City Deal status to boost economic growth.
GVA and house price growth indicators

The latest UK economic forecast estimates GDP growth of 2.7% for 2014 and 2.3% for 2015 in Scotland, just marginally behind the UK average growth figure in 2015 of 2.5%.

The UKEO also outlined a cooling in the UK house market. While UK house prices ended 2014 around 10% higher than at the start of the year, the strongest annual average performance since 2007, there were clear signs that this pace of growth was starting to ease and would continue to do so during 2015

In Scotland, the average house price growth was 5.5% – below the 9.8% UK average but ahead of other regions such as Wales, North East and North West of England and Northern Ireland.

Paul Brewer, head of government and public sector, PwC in Scotland, said:

“Our UKEO estimates growth of 2.3% in 2015, which is marginally below the UK average of 2.5% and ahead of the North East of England (1.9%), Northern Ireland (1.7%) and Wales (2.1%). It is also below the recent Fraser of Allander Institute forecast for GDP growth of 2.6% in 2015; an upward revision to their November 2014 forecasts, reflecting evidence of a strengthening of the recovery in investment in particular.

“There is no doubt that lower oil prices and falling inflation have given a boost to household disposable incomes and with inflation at 0.3%, most workers have received what equates to a real-terms pay increase. The significant footprint of the Oil & Gas sector in Scotland will restrain the impact of this on Scotland’s overall growth.

“However, recovery is being driven by jobs rather than productivity and productivity growth will be critical in enabling wages to recover without driving up inflation in the medium-term.”

The PwC research into the rise of the digital job says that the new types of job are in categories linked to digital technologies such as computer software engineers (80% of employees now doing types of jobs that did not exist in 1990); database administrators (79%); information systems managers (77%); and computer programmers (71%).

However, there is concern over a ‘north-south digital divide’ with London continuing to be the driver of new job creation, where total employment across all sectors in Central London is projected to grow by 25% over the next decade, with 13% projected for Inner London –substantially above the average of 5.8% for the UK regions, excluding London and the South-East.

Paul Brewer, head of government and public sector, PwC in Scotland, said there is a role for government and other institutions to co-ordinate activity and support clusters of skilled occupations and industries outside London:

“Many Scottish Enterprise, local authority and City region investment programmes have sought to advance these objectives in recent years.

“Universities also have a vital role in establishing successful digital hubs. Edinburgh, for instance, is one of six UK universities to rank in the top 10 for computer science outside of London, with others including Southampton, Cambridge, and Manchester.

“Our research notes that Stanford alumni have created around 40,000 companies and over five million jobs in the US. What is to stop leading universities in Scotland and the UK securing similar success as dynamic catalysts for innovation and growth?”

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