• Businesses could help close the productivity gap by better using data to inform their activity
• But companies are struggling to recruit employees with the right mix of skills

A shortage of employees with data skills is hampering UK productivity, says a new Nesta report published today.

In Skills of the Datavores: Talent and the Data Revolution, the UK's innovation foundation found that if companies who interact least with data behaved like those that use it the most, it could result in a three percent1 productivity uplift. This is equivalent to £1 of GDP per hour worked, or roughly one-fifth of the UK’s productivity gap with other G7 countries. However, employers report experiencing a data talent crunch.

Partnering with Creative Skillset, Nesta surveyed 404 medium and large UK companies across six sectors2 about their data activities. Of these, 30 percent can be characterised as ‘Dataphobes’ – those not using data to inform their activity. The remaining organisations are all data active and divided according to three types:

• Datavores: Companies that make strong use of data and analysis for decision-making.
• Data Builders: Businesses that use big data requiring dedicated servers or several processors to save computing time.
• Data Mixers: Those who collect and combine data from a variety of sources.
• Dataphobes: Companies working with small data sets and few data sources, and not using data to make decisions.

Analysts in these data active companies were found to be using data to create new business opportunities, generate revenue and improve customer loyalty, with Datavores and Data Builders on average 10 per cent more productive than Dataphobes.

Data active companies are also recruiting large numbers of data analysts and data scientists but are experiencing a talent crunch. Two-thirds of Datavores who tried to hire an analyst in the previous 12 months had struggled to fill at least one vacancy, and 80 per cent reported problems with at least one skills area in the talent pool such as soft skills, experience and domain knowledge. Finding analysts with industry knowledge and the right mix of data skills is particularly difficult.

Nesta is calling for policymakers, educators and industry to ensure that the UK's businesses have the skills they need to benefit from data. Together with Universities UK Nesta has launched Analytic Britain, a policy briefing with a series of recommendations that includes: embedding data analysis in subjects across the school curriculum, boosting the business skills of university graduates with statistics and programming skills, and developing innovative training solutions to keep the skills of the analytic workforce fresh in the face of rapid technological change.

Hasan Bakhshi, Director of Creative Economy at Nesta, said: "Data savvy businesses in sectors as wide-ranging as Manufacturing, Financial Services, Pharmaceuticals and Creative Media perform more strongly than other firms. Addressing the data skills shortages we have identified should be an important element of the Chancellor’s strategy for closing the UK’s productivity gap with its competitors.”

Ed Vaizey, Minister of State for Culture and the Digital Economy, said: “In today’s digital world, data analytics is playing an increasingly important role in driving business competitiveness and improving the delivery of public services. This research provides valuable insights which will help in our work with partners in education and industry to provide the skills business needs, as well as rewarding careers for individuals.”