British companies are cutting back on how much they spend on emerging technology including AI, big data and robotic automation, according to a major survey of tech leaders. But even though 90% of those surveyed expect an economic downturn, overall tech spending will grow, with companies investing in established digital technologies instead.
More than half of tech executives surveyed for the 2022 Nash Squared Digital Leadership Report say they expect tech budgets to rise and put their investment into established technologies with cloud, inevitably, the biggest winner, with 67% of UK respondents reporting large scale usage. .
The annual survey has been running since 1998, gathering responses from senior technology decision makers. This year over 1,700 took part, including over 746 from the UK.
Despite a decline in overall spending on emerging technology, the report highlighted that companies are realizing the potential to gain from data. Two-thirds of the leaders surveyed say that big data and analytics will be the two main technologies to deliver a competitive advantage, but only a fifth said they are effectively using data to generate revenue, partly due to the lack of skills in this area and problems recruiting people to handle data.
One of the most notable trends of the past year has been the increased risk of a cyber attack, with nearly half of large organizations saying they have been hit by at least one attack in the last year, with a third citing investment in the cloud as a cause. of rising security problems.
Of the largest UK organizations 44% reported a major cyber attack in the last two years, and half of all digital leaders in the UK fear an attack will come from a foreign government group, up from 12% in 2018.
Bev White, CEO of Nash Squared said that the economic indicators are turning negative, but despite this companies are still investing in technology, adding that it “remains crucial” to maximize efficiency in such an unpredictable economy.
“There are signs that some businesses are slowing investment in areas like AI and big data,” she said. “The reasons for this are understandable, but organizations must be careful not to cut too deeply – they risk falling too far behind the pace to catch up, leaving a long-term dent to their competitive position.”
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UK IT spending: cyber security is a priority
Nash also warned tech leaders to ensure they invest properly in cyber security as the “threat environment is highly charged and the rise in concerns about foreign activity is striking”, adding that “the world has become a more dangerous place in 2022. UK businesses must .take robust defensive steps accordingly.”
Last year’s survey highlighted an “unprecedented” technical skills shortage that is threatening the progress of digital transformation projects, with 67% of technology decision makers saying it is preventing them from keeping up with the pace of change. This is still an issue in 2022 especially in the realm of cyber security professionals.
A DCMS report in 2021 revealed that UK recruitment was around 10,000 short of cyber security professionals, which increases the overall threat. Only a third of leaders responding to the survey felt confident that they had all reasonable risks covered.
Beyond the cyber skills shortage, 68% of digital leaders in the UK said the general lack of technical skills has left them struggling to keep up with the pace of change, which is slightly higher than in 2021. Just over half said they have never has enough technology staff. and two-thirds said the rising cost of living made wage demands unsustainable.
Tech leaders also say that government policies are not making it easy to correct this shortage, as 78% of UK decision-makers claim that policies are “completely ineffective” in addressing the skills shortage. In Asia, only 41% of decision makers had a problem with government policies on IT recruitment.
Focus on lack of qualified employees
When it comes to addressing workforce shortages, only 14% of tech leaders surveyed say they plan to turn to AI and robotics to automate the problem, and most say hybrid work has had a greater impact on addressing the problem, including facilitating the problem. to recruit from abroad and bring people into the technical workforce who could not otherwise include parents. Thanks to hybrid working, the number of female leaders is up to 15% from 12% in 2021 and a quarter of the technical workforce is female.
This skills shortage could worsen in 2023 as, despite the economic downturn, more than half of organizations expect to increase their technology headcount. “Businesses run on people – but the UK’s technology sector just can’t find enough of them,” White said. “While the skills shortages plaguing the sector are nothing new, there is concern that they are getting worse rather than better.”
She said there are signs that companies are taking active measures to retain staff including restructuring offices, allowing more remote work and turning to staff outside the country.
“They have also increased their efforts to attract more women to technology. I’m glad to see progress here: the industry is moving towards the better gender balance it so desperately needs,” White added.
Remote and hybrid work models rapidly deployed during the pandemic are here to stay, the report stated, with 68% of leaders in the UK reporting an improved work/life balance between members of their team. But the news isn’t all good, with productivity gains made last year as the pandemic slows. Only four in ten say they have seen a productivity increase from hybrid work, last year it was half.
White said: “It will inevitably take time for UK organizations to find the optimal model for their people proposition and talent strategies. Remote and hybrid working deliver some real benefits, but there are signs that these may moderate over time.”