UK faces 120,000 tech skills shortfall by 2035, report warns

The UK digital and technologies sector could face a shortfall of up to 120,000 technical professionals by 2035, according to new analysis by Frontier Economics.

The biggest gaps are expected in artificial intelligence, cyber security and semiconductors. Across these three areas, the cumulative shortfall could reach up to 79,000 technical professionals by 2035.

The analysis also points to persistent diversity and inclusion issues in the talent pipeline. Men hold around 78% of roles relevant to the six "frontier industries" assessed. Where data is available, ethnic minorities and disabled people are also under-represented.

Six frontier industries

The study covers Advanced Connectivity Technologies, Artificial Intelligence, Cyber Security, Engineering Biology, Quantum Technologies and Semiconductors. These sit within the government's Digital and Technologies Industrial Strategy sector.

Frontier Economics produced the report for the UK Institute for Technical Skills & Strategy, which focuses on technical skills and careers in higher education and research. It describes skills shortages as "widespread" and "persistent" across the six industries, and warns they could worsen over time without action.

The forecasts are presented as ranges rather than single estimates, reflecting uncertainty and limits in workforce data. In AI, the cumulative shortfall by 2035 is estimated at 6,600 to 38,700 technical professionals. In cyber security, it is 6,900 to 21,000. In semiconductors, it is 5,000 to 18,900.

Other areas also show significant projected gaps. Engineering biology is forecast to face a shortfall of 3,700 to 17,000 by 2035, while quantum technologies is estimated at 1,900 to 20,700. Advanced connectivity technologies has a smaller projected deficit of 300 to 1,500.

Barriers and pathways

The report highlights barriers to entry and progression as a key driver of shortages, alongside misalignment between education pathways and industry needs.

It also sets the analysis against wider labour market conditions, including expectations that UK unemployment will rise to around 5.3%. Youth unemployment is forecast at about 16%, and the number of young people not in education, employment or training is expected to approach one million.

The authors argue that alternative technical career pathways could help address the challenge, pointing to apprenticeships, T Levels and V Levels. The report also references funding through the Growth and Skills Levy.

Data and retirement risk

Workforce data is a recurring theme. The report calls for standardised data collection across the industries assessed, linking better reporting to more detailed analysis and stronger forecasting of future skills needs.

Demographics could add pressure in some fields. The report notes that 40% of the UK semiconductors workforce is expected to retire within 15 years, increasing hiring and training demand.

The findings are based on a rapid evidence assessment and qualitative engagement with stakeholders, including universities, research institutes, industry bodies and technicians across each frontier industry. The policy recommendations were tested with stakeholders from government departments and research institutes.

The report notes that its forecasts draw on the best available evidence but remain subject to assumptions and data limitations. It recommends periodic horizon scanning to refresh estimates, particularly given how quickly skills needs can change, including in AI.

New coalition

Alongside the findings, the UK Institute for Technical Skills & Strategy is setting up a Frontier Industries Skills Coalition. It will bring together partners across government, industry, universities and research institutes. Planned work includes improving collaboration between education and industry, raising the visibility of technical careers, and aligning workforce development across the six industries.

Dr Kelly Vere MBE, Director of the UK Institute for Technical Skills & Strategy, said: "The report highlights a critical and growing technical skills challenge across the UK's Digital and Technologies sector - and it is one we must address collectively.

"The findings show the scale of workforce demand across the six frontier industries that underpin innovation, research and economic growth. They also highlight structural issues, including fragmented workforce data, persistent diversity challenges and insufficient visibility of technical career routes."

"The recommendations provide a clear direction for action. The priority now is bringing the right partners together to turn these insights into practical change. As the organisation that commissioned this work, the UK Institute for Technical Skills & Strategy (UK ITSS) will work with government, industry, universities and research organisations to convene a cross-sector coalition and support a coordinated response. This will help align activity, share effective practice and ensure the technical workforce is central to future skills planning."

"This is not a challenge any one organisation can solve alone. It will require collaboration across the system to build, support and sustain the technical workforce needed for the UK's frontier industries."

Thomas Badger, Principal at Frontier Economics, said: "The UK has real strengths across the Digital and Technologies frontier industries, but persistent shortages in technical skills risk becoming a brake on their continued growth.

"While government has elevated skills to the top of the policy agenda, our research shows there are still important gaps in the evidence about where shortages are most acute and how best to respond."

"We hope the evidence and insights presented here will help inform ongoing decisions by both policymakers and industry leaders and contribute to a continued evidence-based approach to skills policy."

Professor Mark Jefferies, Head of Research Partnerships at Rolls-Royce, said: "A diverse and highly skilled technical talent pool is essential for Rolls-Royce. This report underlines the urgent need for deeper collaboration between industry, universities and Centres for Doctoral Training to ensure graduates are truly job-ready and can meet the demands of the Digital and Technologies sector."

"I welcome this new coalition, spearheaded by the UK Institute for Technical Skills & Strategy, as a vital step in closing the national skills gap."