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  1. Technology
November 27, 1988


By CBR Staff Writer

The role of government and the shortage of skills in the computer industry were two of the outstanding issues raised at the Parliamentary Information Technology Committee – Pitcom conference last Tuesday. Which was an odd choice of date, since it coincided with the State Opening of Parliament, so that the MPs at which it was aimed should by rights have been in Another Place. Conference speakers included IBM UK managing director Tony Cleaver, David Baldwin from Hewlett-Packard UK, ICL chairman Peter Bonfield, and John Aris from the National Computing Centre. The conference was opened by Kenneth Warren MP, chairman of the Select Committee on Trade and Industry, who said that Whitehall must reassess its role as the major computer user in the UK. $2,000m deficit The committee’s 1988 report on trade and industry, due for publication on December 21, is expected to concentrate largely on the UK computer and communications industry. Warren himself sat on the Airey Neave Committee on Science and Technology during the 1970s and was parliamentary private secretary to Keith Joseph during his time at the Department of Trade & Industry. Though careful not to give away any of the contents of the report, he admitted the government lacked understanding when it came to science and technology, and claimed that despite a solid research base and a very remarkable market the trade deficit in the computer sector is now over UKP2,000m. He went on to say that despite spending about UKP1,500m annually on computer technology, the government does not realise the significance of its role, and how it can help UK companies in planning future strategies and exploiting overseas markets. John Aris of the National Computing Centre outlined what he saw as the government’s role in aiding the growth of the UK computer industry. He believes the most important issue is to get computer technology into widespread effective use, and said that government procurement must be aimed at improving applications. According to Aris the main obstacles for effective use are lack of management understanding, shortage of skilled professionals, software quality, and the lack of standards. He said though overcoming these hurdles was a matter for management, government must act as catalyst, stimulant and lubricator. He called for government funding for market orientated but risky applications projects, and incentives for companies to train their own rather than poach staff; but warned that innovation comes from users, not from research and development. ICL chairman Peter Bonfield turned to the indigenous computer industry in Europe and admitted that although there are lessons to be learnt from the American and Japanese experience, not all are relevant to the UK or the European Community. He sees the progressive removal of the internal barriers within the EC accelerating the need for more effective computer solutions, and radically affecting the role of government. Because the European market is fragmented, European companies have not been able to achieve the economies of scale that competitors in the US and Japan enjoy. He said that public procurement of non-defence products is a much more important influence on the European market than in the US or Japan, and that public procurement must be opened to greater intra-Community competition. Bonfield feels the UK’s experience of liberalisation, deregulation and privatisation should give it an edge over competitors living in a much less fluid market place. In order that the new integrated Europe is not overrun by foreign products, Bonfield argues that the European Community’s research and development programme must be closely aligned to the potential requirements of the new internal market, in that way the Community’s purchasing power can pull through products being developed in programmes such as Esprit, Brite, Aim and Race. On the vexed question of standards he wants the European Commission and national governments to use their public purchasing muscle to insist on Open Systems. He welcomed the creation of the controversial O

pen Software Foundation, claiming it has at least confirmed that the majority of the players in the market have accepted the X-Open philosophy of a Common Applications Environment.

David Baldwin, chairman and chief executive of Hewlett-Packard UK, turned his attention to the future development of the computer industry in the UK. Though Britain has a strong software industry, the indigenous hardware industry has not grown to world class standing. Some see this as a positive attribute, with software becoming a more critical part of the computing mix; Baldwin does not. He believes the convergence of computers and telecommunications, and the emergence of systems integration, have made it impossible for one company to supply all the elements of a complete system, in turn leading to a blurring in the distinction between hardware and software sectors. Own only people Baldwin contends that the successful system integrators will be those who own a part of the system and therefore have a competitive edge. However as UK software houses tend to own only people, they will find themselves at a competitive disadvantage, and will be forced to form partnerships with hardware manufacturers.

IBM’s Tony Cleaver concluded that industry is not doing enough to combat the current skills shortage. The average UK expenditure on training is only 0.15% of turnover compared with 3.5% for the top US technology firms, and only one British company in three does any training at all. Continued growth in the computer industry, coupled with the expected 30% fall in the number of school-leavers by 1995, is expected to lead to an even more acute skills shortage. However Cleaver said that while it is regrettable that there is an active poaching community in the industry, he does not agree with those who look for government to impose some sort of levy; it is up to computer suppliers and users to do the training. Pointing to his own company he said between 3.5% and 4% of turnover worldwide is spent on training, and in the UK each employee spends on average 12 days in the classroom each year. Despite training and employing the largest community of IBM skills in the country IBM UK loses only 3% to 4% of its staff each year, he said.

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