Scotland needs to improve its IT skills base in order for its economy to compete, a new report states.

The report, by IT trade body ScotlandIS, said there is an “urgent need” for ICT skills to be better embedded across the Scotland in order to enable innovation as the economy increasingly bases itself around selling services.

Scotland risks under performing because of the skills shortage, warned the report, conducted by researchers NMP. Polly Purvis, executive director at ScotlandIS, said Scotland needed to improve its current talent pool.

She said Scotland risked being left further behind by the “leading knowledge economies”, adding: “Scotland has a great reputation for innovation, but we need to ensure we have the tools and skills to continue that tradition and not merely trade on past success.”

Half of technology companies in Scotland have recruited from overseas in the last year. A reliance on offshore IT skills to drive innovation is a “recipe for disaster”, she said.

But the report also stated that more ICT jobs are available in Scotland than is commonly perceived. Some 105,000 people currently work in the sector and generate £5 billion annually, which is five per cent of Scotland’s GDP.

A long term commitment is needed by the public and private sectors to collaborate and improve the situation, the report said, adding that Scottish schools and universities need to attract students to study technology-related subjects.

In the five years to 2006, applications to study ICT degrees in Scotland fell by 49 per cent. This was despite Edinburgh University having been rated as Britain’s top destination for studying ICT, and St Andrew’s and Glasgow universities featuring in the top 20 for computing science.

A three step plan was needed, it said, including strengthening connections between industry and academia, the development of elite ICT postgraduate courses, and an improvement of ICT teaching standards.

It said in highly developed knowledge economies such as Sweden, Finland, Malaysia and Massachusetts, there was a history of long term government support for the sector, more investment, better embedded skills and a culture of more risk taking.

Donald McLaughlin, operations director at Cisco in Scotland, said: “Our economy needs a shot in the arm. A stronger focus on technical innovation is the tonic it needs.”

“If we cannot turn the tide back towards technology as an attractive career option, Scotland will have a poorer quality workforce, which ultimately results in a poorer Scotland,” added Raymond O’Hare, regional director at Microsoft in Scotland.

Related articles:

RBS in talks over job cuts as ABN integration progresses