THE DIGITAL SECTOR IN GREATER MANCHESTER: SECTOR PROFILE
NOVEMBER 2013
1INTRODUCTION
The UK’s digital content and Information Communication Technology (ICT) sector has a strong reputation for innovative technology and design. This is backed by strong research and science capability that ensures UK companies stay at the front of this highly versatile sector, contributing to over 7% of UK economic output. ICT is also at the heart of most modern products and processes and is often a driver of new innovation.[1]
For the purpose of this report, sectors included in the definition of thedigitaland ICT sectorincludes the following SIC codes:
Digital content:
- Printing of newspapers
- Pre-press & pre-media services
- Reproduction of recorded media
- Manufacture of computers & peripheral equipment
- Publishing of books, newspapers, journals & periodicals, and other publishing activities
- Publishing of computer games and other software
- Motion picture, video & television programme production activities, post-production activities, and distribution activities
- Motion picture projection activities
- Sound recording and music publishing activities
- Radio and television programming and broadcasting activities
- Advertising agencies
- Media representation
- Specialised design activities
- Photographic activities
- Motion picture, television and other theatrical casting
Information Communication Technology (ICT):
- Wired telecommunications activities
- Wireless telecommunications activities
- Satellite telecommunications activities
- Other telecommunications activities
- Computer programming activities
- Computer consultancy activities
- Computer facilities management activities
- Other information technology and computer service activities
- Data processing, hosting and related activities
- Web portals
- News agency activities
- Other information service activities
The relocation of the BBC into Greater Manchester and the associated development of MediaCity:UK is not only bringing employees from the sector up from the BBC in London but creating a number of new opportunities for Greater Manchester residents, and encouraging other businesses to locate and develop activities across Greater Manchester. The Sharp Project and its further developments are creating an additional hub of activity that is generating further growth and employment. This activity is additional to established centres of activity in Manchester city centre, such as the Northern Quarter. As a result of these and other developments Greater Manchester has developed as the UK’s biggest centre for the ICT and Digital industries outside the Greater Southeast.
2EMPLOYMENT STRUCTURE & BUSINESS BASE IN THE DIGITAL AND ICT SECTOR
Digital Content & ICT industries account for 45,800 jobs in Greater Manchester (4% total Greater Manchester employment), and generate around £2bn p.a. of economic output (again, 4% of total Greater Manchester economic output).
Key sub-sectorsof employment
The Digital and ICT sector is diverse, with business and employees within the sector undertaking a vast range of activities.
Within the ICT sub-sector, computer programming, consultancy & related activities, account for over half of employment. Activities related to telecommunicationsare the next biggest employer.
The digital content sector is characterised by a larger number of activities, such as printing, publishing, music, motion picture, photography and television as well as other media and digital activities. This diversity is also reflected in the employment split across these sub-sectors, though advertising agencies employover a third (35%) of those within the digital content industry. This is followed by film & TV activities, which employ around 2,700 individuals across Greater Manchester.
Figure 1 Employment in the ICT sector in Greater Manchester, 2011
Source: Business Register & Employment Survey, 2012
Figure 2 Employment in top 10 Digital Content subsectors in Greater Manchester, 2011
Source: Business Register & Employment Survey, 2012
Geographic distribution
The City of Manchester acts as the primary digital content ICT hubfor Greater Manchester– accounting for a third (14,840 individuals)of Greater Manchester’s employment in the sector. Trafford, Stockport, and Salford also have large concentrations of employment in the sector (6,830, 6,250, and 5,700 respectively). Even accounting for the fact that Manchester accounts for more employees than all other localities, Greater Manchester’s digital industries are especially concentrated within the city.
Clusters of sector employment include Manchester city centre and Salford Quays. Trafford Park, the area around the Airport in the south of Manchester, and Bury also feature strongly, whilst there are also notable concentrations of employment across Greater Manchester’s main town centres, and in areas such as Middlebrook in Bolton and Kingsway in Rochdale, highlighting the spread of the sector across the whole conurbation.
Table 1 Employment in the Digital Content & ICT sector across Greater Manchester, NW, & GB, 2011
LOCAL AUTHORITY / No Employees / % of Greater ManchesterManchester / 14,840 / 32.4%
Trafford / 6,830 / 14.9%
Stockport / 6,250 / 13.7%
Salford / 5,701 / 12.5%
Bury / 2,885 / 6.3%
Bolton / 2,630 / 5.7%
Rochdale / 2,090 / 4.6%
Wigan / 1,620 / 3.5%
Oldham / 1,580 / 3.5%
Tameside / 1,350 / 2.9%
Greater Manchester / 45,776 / 100%
NW / 102,690 / -
GB / 1,213,670 / -
Source: Business Register & Employment Survey, 2012
Figure 3 Spread of employment in digital content & ICT sector across Greater Manchester, 2011
Source: Business Register & Employment Survey, 2012
Table 2 shows the distribution of employment in these sub-sectors across all local authorities within Greater Manchester. Manchester district has the biggest concentration of employment in seven of the ten sectors. However, Stockport has the largest employee base in computer programming, Bury in wireless telecommunications activities, Trafford in data processing, hosting and related activities, and Salford, unsurprisingly given MediaCityUK, in television programming and broadcasting.
Page 1
Table 2 Employment in top 10 digital content & ICT subsectors across Greater Manchester districts, 2011
Top 10 subsectors / Bolton / Bury / Manchester / Oldham / Rochdale / Salford / Stockport / Tameside / Trafford / Wigan / Greater Manchester Total- Computer consultancy activities
- Other telecommunications activities
- Advertising agencies
- Computer programming activities
- Other information technology and computer service activities
- Wireless telecommunications activities
- Motion picture, video and television programme production
- Data processing, hosting and related activities
- Television programming and broadcasting activities
- Specialised design activities
Source: Business Register & Employment Survey, 2012
Page 1
Business Base
The most up-to-date data obtained from Companies House and sourced from Bureau van Dijk’s FAME database gives a total of 7,377 businesses in the Digital Content & ICT sector in Greater Manchester. Similar to the distribution of employment, Manchester, Stockport, Trafford, and Salford have the largest numbers of firms in the sector located within their boundaries.
Table 3 Number of businesses in the digital content and ICT sector in each Greater Manchester district, 2012
LOCAL AUTHORITY / No. of businesses / % of Greater ManchesterManchester / 1,942 / 26
Stockport / 1,187 / 16
Trafford / 1,055 / 14
Salford / 620 / 8
Bolton / 605 / 8
Bury / 494 / 7
Wigan / 493 / 7
Tameside / 359 / 5
Oldham / 319 / 4
Rochdale / 303 / 4
Total Greater Manchester / 7,377
Source: FAME, 2012
GVA & Employment forecast
Growth forecasts for the (slightly more broadly defined) Creative & Digital industries in Greater Manchester are drawn fromthe Greater Manchester Forecasting Model (GMFM) produced by Oxford Economics. While the definition of this sector from the model employed varies slightly from the one used above, it gives an overview of the sector’s overall growth potential over the coming decade.
GMFM forecasts that in GVA terms the sector will grow by over 70% by 2025; the wider Greater Manchester economy is forecast to grow its economic output by only half as much. Employment is forecast to grow more modestly (though still at a healthy 16%) during the same period, implying a strong increase in worker productivity and associated need for more highly skilled workers.
3SUPPLY & PROVISION OF DIGITAL AND ICT SKILLS
This section reviews data on the number of apprentices, further education and higher education students who live in Greater Manchester and who are studying Digital and ICT sector related courses. It aims to give an indication of the potential supply of skilled labour to the sector. However, when reviewing the following data the following caveats should be noted:
- A person’s subject of study is not necessarily an indicator of their future employment occupation;
- Many Greater Manchester learners are studying for academic qualifications (e.g. history, geography) which could make them suitable for employment in a range of sectors – these learners are not included in the analysis;
- Across the relevant datasets up to 10% of learners have their study subject listed as unknown – these learners are not included in the analysis;
- The latest available data on 16-19 year old and Higher Education students is less current (2011/12 vs. 2012/13) than the latest available data on 19+ and apprenticeship students; and
- There is no official line on which subjects of study are directly relevant to which sectors of the economy, therefore New Economy has had to make a judgment on which subjects and apprenticeship frameworks map to which sectors – detail on this mapping exercise is provided in an appendix to this report.
Thus the figures presented are indicative of the pool of labour from which the sector could recruit.
16–19: Further education (FE)and school sixth forms
Analysis of Education Funding Agency (EFA) supported provision (i.e. for Greater Manchester residents aged under 19) shows that in 2011/12 the EFA funded just over 9,800 ICT and digital industries related course starts. This represents 5% of all EFA-funded starts in that year.
Since 2009 the number of EFA-funded ICT and digital industries related course starts has been broadly stable; over the same period the total number of EFA funded Greater Manchester starts across all sectors has risen by 12%.
EFA fundedprovision in Greater Manchesterfor the digital content & ICT sector is particularly focused upon Level 3 qualifications for ICT practitioners and in Media & Communications subjects.
A higher proportion of males (64%) have startedan EFA-funded Greater Manchester ICT and digital industries related course in 2011/12, compared to 51% of all sector starts.
The five largest EFA-funded providers to the sector by numbers of Greater Manchester starts are:
- Salford City College
- Manchester College
- Loreto College
- Bury College; and
- Cheadle and MarpleSixth Form College
Adult (19+)Skills Funding Agency (SFA) funded provision (excluding apprenticeships)
During the 2012/13 academic year, there was a total of 47,000 starts in SFA-funded digital and creative industries related courses in Greater Manchester (NOTE: this figure is based on a sector subject area definition that includes arts, crafts and creative arts). This represents a decrease of 3% from the 2008/09 academic year. Over the same period the total number of all sector SFA-funded starts in Greater Manchesterdecreased by 8%.
Starts at Level 3 and above were slightly lower (36%) in 2012/13, compared to 41% across all sectors in Greater Manchester.
Table 4 - Level of study by Greater Manchester residents of SFA funded Digital & Creative courses, 2012/13
Level / Digital and creative industries / All sectorsLevel 1 & Entry / 3% / 10%
Level 2 / 19% / 20%
Level 3 / 13% / 20%
Level 4+ / 23% / 21%
Other / 42% / 29%
Source: SFA, 2012/13
Unlike EFA-funded provision, there doesn’t seem to be a gender imbalance in
SFA-funded starts, with 57% being made by females, compared to 53% across all sectors.
The five largest SFA-funded providers to the sector by numbers of Greater Manchester starts are:
- Manchester College;
- Oldham College;
- Manchester City Council; and
- Bolton Council.
Apprenticeships
During the 2012/13 academic year, there were 670 starts on digital and creative apprenticeships in Greater Manchester. This represents an increase of 188% from the 2008/09 academic year, compared to a 124% increase across all apprenticeship starts in Greater Manchester.
35% of these apprenticeship starts were at Level 2 (intermediate level). Each year the sector accounts for a large number of Greater Manchester’s Advanced Apprenticeship starts.For instance, in 2012/13 there were over 300 IT, Software, Web & Telecoms Professional advanced apprenticeship starts.
Similarly to EFA-funded provision, there is also a big gender imbalance, with the majority (74%) of relevant apprenticeship starts being made by males, compared to 46% across all sectors in Greater Manchester.
Apprenticeships are mainly started by younger people, with two thirdsbeing under 25 years (66% in 2012/13 - with 39% between 16 and 18 years, and 27% 19 to 24 years). There is also a considerable proportion of 31 to 49 year olds (20%) taking up an apprenticeship – a larger proportion compared to other key sectors of Greater Manchester. This has been a fairly consistent trend in the sector since 2008/09.
Age Groups / Apprenticeship starts 2012 / 2013 (total number)Under 19 / 262
19-24 / 181
25-30 / 57
31-49 / 131
50-64 / 39
65+ / 0
Total Number / 670
The five largest apprenticeship providers to the sector by numbers of Greater Manchester starts are:
- Bury College;
- Economic Solutions;
- Manchester College; and
- BT.
Higher Education
Greater Manchester is home to five universities (the University of Manchester, Manchester Metropolitan University, University of Salford, University of Bolton and the Royal Northern College of Music) who collectively have more than 100,000 students and almost 30,000 graduates each year.
Table 4 shows that the four largest HE institutions offer courses related to the digital content & ICT sector, though not all subjects grouped in the categories presented here will be of direct relevance. However, we can estimate that around 20,000 students were studying digital and creative industries related subjects in Greater Manchester.
Table 5 All HE students of Greater Manchester HE institutions in digital and creative industries related subjects, 2009/10
SUBJECT / BOLTON / MMU / MANCHESTER / SALFORD / Greater Manchester TOTAL / % OF TOTALComputer science / 335 / 1,400 / 1,125 / 965 / 3,825 / 16.9%
Engineering & technology / 1,600 / 2,855 / 4,725 / 1,470 / 10,650 / 47.0%
Mass comm. & documentation / 100 / 500 / 100 / 860 / 1,560 / 6.9%
Creative arts & design / 710 / 2,655 / 575 / 2,705 / 6,645 / 29.3%
Total / 2,745 / 7,410 / 6,525 / 6,000 / 22,680 / 100%
Source: HESA (2011)
4SECTOR SKILLS ISSUES
Summary of literature
Skillset, the Sector Skills Council for Creative Media, produced its latest Sector Skills Assessment in January 2011, outlining the crucial issues for the sector. The key skills challenges facing the sector identified include:
- The predominance of small and medium businesses, with a large – and growing – number of people in the sector working freelance, make engagement difficult.
- While employees and freelancers have high levels of desire for training and education, employers do not currently meet this demand.
- Employers report a large number of hard-to-fill vacancies. Sales, marketing, and technical development are particularly difficult areas to fill for companies in this sector.
- There is a significant issue with mismatch of applicants’ abilities to the needs of the job. However, improvements in training and education are felt to be helping to rectify this issue.
- Innovation is crucial to the industry and new developments in digital technology demands constant redevelopment of business plans and employee skills.
- Key skills gaps identified include: multi-skilling, including understanding of different technology platforms; multiplatform skills; management, leadership, business and entrepreneurial skills; IP and monetisation of multiplatform content; broadcast engineering; sales and marketing; and diagonal thinking, meaning the ability to create new, innovative ideas and stories then monetise them using a variety of media on several platforms.
E-Skills, whocoverskills issues within the ICT sector,describe the following skills environment as well as the key issues for the digital economy going forward:
- Despite the pressure of the recession, businesses are still likely to find a shortage of applicants for positions. Posts involving programming, technical support and technology management roles tend to be the most difficult to fill.
- The sector is also suffering from skills gaps among the current workforce as a result of globalisation and convergence.
- The main skills gaps are in senior positions and relate to IT programme management, supplier management, and service management and delivery.
- Digital content companies have an oversupply of applicants, but a general lack of skills in several crucial areas when recruiting. In particular there is a need for more skills in management and leadership, monetisation of content, production of multiplatform content, broadcast engineering, and visual effects. Multi-skilling is an important aspect for content companies to ensure efficiency and productivity.
- There is a perception that the education system is not adequately preparing young people for the digital economy. The number of UK applicants for computing degrees is dropping, while there is a lack of teaching skills and adequate information to allow students to pursue careers in IT. Moreover, there is still a massive gender imbalance, with men making up over 90% of workers in IT.
- Digital skills are now important for businesses in all sectors, with exploitation of technology a key aspect in maintaining competitiveness in the face of globalisation. However, smaller companies and older leaders are less likely to recognise the full importance of technology.
- In the future, demand for IT skills is likely to see a significant increase across the board, with a 1.2% yearly growth in the number of employees in the sector forecast nationally to 2019. Over half of these professionals are likely to come from other professions, with only a fifth provided by the skills and education system.
- Skills shortages are most often reported by firms seeking to recruit software engineers, IT & telecoms management, systems developers or internet professionals, though a larger number of networking vacancies were actually proving difficult to fill due to related skills shortages.
- Business skills, higher level technical skills and sector knowledge/experience are often considered lacking amongst applicants.
- In the future, strongest growth will be in high-skill areas, particularly software professionals along with ICT managers and IT strategy & planning Professionals.
- The changing nature of skills in the UK will continue to be primarily in high-value roles such as project management; systems architecture; business process management; change management; security; risk management; analytics; and web/internet development.
- More generally, there will continue to be an increasing need for customer, consumer and business-oriented skills as well as sophisticated technical competencies.
Key findings from the Greater Manchester Business Survey
The 2012 Greater Manchester Business Survey (GMBS) was developed to deliver a Greater Manchester-wide representative business survey providing data on current and future economic performance and identifying the opportunities and barriers to growth across a range of themes. Ten percent of respondents were businesses operating in the Digital Content & ICT industries as defined in this paper.