Skills shortage threatens development of IT and telecom companies

The lack of skills is the biggest obstacle in companies' operations. In the fourth quarter of last year, 31% of service companies said that lack of skills was the biggest obstacle to their business and its development. For IT and telecom companies, the situation is even worse. Among computer consultants, the figure is alarming, with 80% of companies seeing skills shortages as the biggest obstacle to their business.

- If the IT and telecom industry is to continue to be an engine for Swedish growth, the skills issue must be resolved. I link part of the problem to a lack of gender equality. The IT and telecom industry cannot afford to attract only men. The imbalance already starts in the education system, where technical education attracts few women. These must be made attractive and relevant to more target groups," says Anne-Marie Fransson, Director of the Swedish IT and Telecom Association.

Almega's services indicator shows the consequences of the shortage of labor in certain service industries. 22% of information and communication companies, which include companies in the IT and telecom industry, stated in autumn 2018 that they had been forced to turn down orders due to staff shortages. In addition, 16% said that the skills shortage had led them to consider moving all or part of their production abroad.

- "Of course, it costs companies a lot of money to have to turn down business because of a lack of skills," says Anne-Marie Fransson.

Despite a slower pace of output growth towards the end of the year, private service producers accounted for most of last year's GDP growth. Among private service companies, companies in the information and communication sector contributed the most, with 0.6 percentage points out of a total of 2.4. Over the whole of 2018, growth in the private service sector averaged 3.5%. Information and communication companies contributed 1.7%, i.e. almost half of the growth.

Between the fourth quarters of 2017 and 2018, employment in the private services sector increased by 64,000 persons. Information and communication activities, which include business services such as telecommunications, computer programming and computer consultancy, added 10,000 jobs. An increase of 4.9%.
- The IT and telecom industry continues to contribute to Sweden's growth. But the question is how much longer. "Previous figures from IT&Telecomföretagen show that around 70,000 people with IT or digitally related skills will be missing by 2022 if nothing is done," says Anne-Marie Fransson.

Facts Almegas Service indicator quarter 1 2019:

Almega's services indicator is a quarterly business cycle indicator that highlights the overall development of the private services sector and serves as a signal of cyclical changes in industries that together account for 52 percent of Sweden's GDP and 47 percent of employment.

Facts about the information and communication industry, SNI codes 58-63:

This sector includes companies in the IT and telecom industry represented by IT&Telekomföretagen within Almega.
SNI 58.2 - Publishing of software
SNI 61 - Telecommunications
SNI 62 - Computer programming, computer consultancy
SNI 63 - Information services