Norway’s IT sector and government to tackle skills shortage

Norway's IT sector is getting much-needed government support to help improve access to talent

Norway’s Conservative-led government is partnering with the private sector to help resolve skills shortages in core areas of the country’s rapidly expanding IT-sector.

The partnership, long sought by IT industry chiefs, aims to develop a strategy comprising a more tech-customised education system coupled with advanced retraining schemes and enhanced public capital support.

The primary objective of the state-private partnership is to increase the pipeline of specialised talent for fast-growing IT companies, many of whom are struggling to recruit key technical personnel in sufficient numbers to support expansion. Skills in demand include product innovation, digitisation, robotics and network security.

Hiring IT security experts and skilled professionals ranks as one of the highest priorities for companies in Norway. The gap between supply and demand for IT skills is currently widening. 

A government report in 2018 estimated that Norway could face a shortfall of more than 4,000 experts in the niche area of IT security alone by 2030 unless measures are taken to reverse the risk of a contracting talent pool. The corresponding estimate, in terms of a shortfall in 2019, is running at around 2,000.

The government report mirrored a “calculation of findings analysis” made by NIFU, the Oslo-based Nordic Institute for Studies in Innovation, Research and Education. NIFU estimates that people needed with IT security skills could reach 15,000 s by 2030.

According to the NIFU data, the supply side will see a maximum of 11,000 with the required IT security academic qualifications graduating from technical colleges and universities in Norway onto the labour marketplace in 2030.  

Read more about IT skills in the Nordic region

  • Norway-based mobile phone company Telenor is challenging its workforce to spend 40 hours a year learning digital skills as it prepares for the impact of digital technology.
  • Tieto, which supplies IT technology and services in the Nordics, rolls out cloud-based HR services to gain an edge in recruiting and retaining skilled IT staff.

Apart from IT security and network-related skills, Norway’s expanding community of niche focus IT and fintech sector firms is also developing a larger appetite for recruiting talent and specialised skills.

This demand for talent is forecast to accelerate in parallel with the expected organic growth in next generation technologies and innovations. This trend is directly linked to advances in the internet of things, artificial intelligence, robotics, machine learning, and digital-based technologies and application developments.    

The skills shortage, and a contracting labour pool at national level, is impacting on the ability of some of Norway’s largest IT-groups, including Evry and Visma, to meet projected business growth and production output targets.

In addition, IT company chiefs are also eager to secure a commitment from government that it will look at “tweaking” Norway’s famously high tax on high-salary earners.

The IT industry is pushing for changes to tax codes that would incentivise companies to recruit IT talent from outside Norway.

Prime minister Erna Solberg’s Conservative-Progress coalition is generally receptive to the idea. Solberg has indicated that the administration is willing to examine the IT industry’s case for tax-based incentives. The government has already implemented a system of tax discounts covering energy costs that are specifically targeted at native and foreign operators of data centres in Norway.

Concerns raised

The IT-industry’s more acute awareness about the need to tackle capacity and IT skills availability issues is visible in the concerns raised and communicated by the CEOs of Telenor, Atea, Evry and Visma to the Solberg government.

For Norwegian IT firms, access to expertise remains one of the biggest bottlenecks to increasing capacity. Almost one in three companies cite a shortage of IT expertise as the principal obstacle to growth. 

“In order not to lose market shares, more needs to be done to help Norwegian companies with the large investment that is required to grow internationally. Competence and capacity are the bottlenecks,” said Liv Freihow, director of industry policy at IKT-Norge, Norway’s central organisation for the IT sector.

IKT Norge wants a greater level of cooperation from the government to establish a larger number of IT-related study places at colleges and technical institutions in Norway.

“The state budget for 2019 does not properly address the skills shortage issue or education,” said Freihow. “We hope the government can be persuaded to see matters from the perspective of the IT industry.”

Recruiting experts

The difficulty in recruiting expert IT skills in Norway has become more challenging in an increasingly talent-led competitive environment for skills, said Per Hove, CEO of Evry Group. Companies are both focused on recruiting expertise and finding more innovative ways, apart from salary conditions, to retain its best talent.   

“Although we have an internal ambition to become the Nordic region’s best workplace, we have many competitors out there; both public and private companies, and they also require people with high technology expertise,” said Hove.

The challenge to recruit, retain and build complementary multi-skills teams, said Hove, is multiplied given that more non-traditional companies, such as Google, Facebook and fintechs, are moving in to the IT domain in Norway.

Evry, which has operations in Sweden, Ukraine Poland and India, is increasingly looking to find the skills and talent it will need to grow outside Norway.  

“We need to bring the expertise here,” said Hove. “There are many skilled people in Europe and elsewhere who may want to work in Norway. Aside from that, we have a need in Norway to educate more people in IT skills and ensure we can also recruit expertise locally.”

Record growth

According to the Value creation and internationalisation in the ICT industry report, which was co-sponsored by industry association IKT Norge and Export Credit Norway (Eksportkreditt Norge), Norway’s IT companies generated a record NOK165bn (€17bn) in foreign revenues in 2017.

Conducted by Menon Economics, the report maps out for the first time the scale of the growth driving the IT sector in Norway. Of the NOK165bn in total foreign sales, NOK136.5bn emanated from the foreign-based subsidiaries of Norwegian IT companies. Pure IT exports from Norway amounted to NOK28.5bn (€3bn).

Visma, Evry, Telenor and Atea are Norway’s four biggest IT equipment and services exporters, with Telenor generating NOK100bn (€10.3bn) in foreign sales in 2017 alone.

Around 61% of all IT exports by Norwegian companies were sold to markets in the European Union and North America, with Sweden, Germany, France, Denmark and Britain ranking as Norway’s most important European markets.

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