IT contractors can play key role in driving growth in London

Thursday 19 June 2014

London's growth over the next five years is expected to be driven by technology and creative industries, according to the latest CBI/KPMG London Business Survey.

This means that IT contractors are likely to have plenty of opportunities to demonstrate their value and help the capital's expansion.

Sixty-nine per cent of businesses said technology and creative industries would be key to London's economic growth.

Activity is expected to be focused around East London (58 per cent), the City, Shoreditch and Old street (44 per cent).

Lucy Haynes, Confederation of British Industry (CBI) London director, said: "As the recovery gathers steam, it’s encouraging that London firms continue to be upbeat about the future and are looking to expand.

"The technology and creative industries have shot up the ladder as some of the fastest-growing sectors in London, with the majority of businesses seeing them as holding the key to the capital’s future growth.

"However, if we are to attract and retain the brightest and best minds to Tech City and to the rest of London, we urgently need to tackle the endemic housing problem the capital faces [...] Businesses’ concerns, regarding skills, the level of infrastructure investment and the corporate tax rate, also need to be addressed to keep the capital competitive internationally."

Nevertheless, for now optimism remains high. While it has eased from the 70 per cent noted during the last quarter - a record high - at 65 per cent the figures remain positive.

Half of the respondents to the CBI/KPMG research are optimistic about the prospects of their own firm over the next six months. Seventy-nine per cent also have faith in the capital city, claiming London is either a 'good' or 'very good' place to do business.

Of course staffing problems cannot be ignored and IT contractors are sure to find themselves in high demand.

Employers ranked retaining key staff and a lack of skills as their biggest concerns over the next 12 months.

This could act as a barrier to the 52 per cent who are planning to increase headcounts.

According to Richard Reid, London chairman of KPMG and the East London Business Alliance, there needs to be "focused policies that help and encourage education in STEM subjects and ease access to tech talent on a global basis".

"The success of our technology sector, like all other sectors in the Capital, relies on the ability for businesses to have access to a skilled talent pool of staff. Earlier careers advice in schools, more focus on vocational training and schools working more closely with employers could all support economic recovery and growth in the longer term," he said.

The effect of the skills shortage is already being seen in the tech sector. The Recruitment and Employment Confederation's monthly report on Jobs for May showed growth in demand for contractors in the IT sector, rising from 63.7 to 64 on the index.

At the same time, demand for permanent IT job candidates fell for the second month in the row, with the number of skills on their 'scarce' list nearly doubling.

By Victoria McDonnell

Get in touch

Please select your type of enquiry:

Brookson on Twitter