Closing the Digital Skills Gap

Hitachi Vantara, the digital infrastructure and solutions subsidiary of Hitachi Ltd has released a research report finding that a lack of digital skills is jeopardizing industries’ digital transformation initiatives. The report “Industry 4.0:Maturity of Adoption and Its Impact on Sustainability and ESG” surveyed more than 600 IT and OT leaders engaged in Industry 4.0[1] initiatives across the manufacturing, transportation, and energy and utilities sectors.

“Digital maturity” in this report refers to the adoption of instrumentation and control technology, such as industrial IoT, that will lead to analytics applications using that data. Over time, organizations will integrate additional operational technology (OT) systems with other enterprise applications and data, which will enable more advanced analytics.

The report provides a broad view of the confidence, concerns, and next steps regarding enterprises actively engaged in digital transformation. Key findings include:

• While 100% of companies surveyed are engaging in or planning digital transformation projects for their operations or supply chains, more than half of companies said they lacked sufficient skills in key The most critical gaps cited are in data science (42%) defined as artificial intelligence, machine learning and analytics; IoT deployment and development (48%), or robotics deployment and operations (60%).
• Given the technology skills gap, at least 37% of respondents indicated that they had no plans to implement IoT-led initiatives.
• Once viewed as a potential barrier to Industry 4.0 and digital transformation initiatives, IT/OT convergence is happening with 95% of respondents saying the two departments collaborate adequately or better for IoT projects.

The survey also revealed that companies are facing a plethora of competing digital priorities from business optimization to employee retention to ESG (environmental, social and governance). The top driver for digital transformation continues to be optimization of business processes and operations, followed closely by reducing risks, innovation/new revenue streams and increasing revenue/cutting costs.

“Digital transformation and its potential to create value for society, environment and economies will depend on how fast certain industries can adopt and ready their workforce for the cloud, cybersecurity, 5G, AI/ML and IoT. Companies must be selective about their business’ most critical outcomes and appropriately align it with the necessary investments in software, automation, and services,” added Sharma.

Despite ESG finishing eighth as a company driver, more than 80% of respondents see ESG regulatory requirements as having at least a medium impact on their organization and expect the impact to increase significantly in the next two years.

“While regulation will have some impact, companies indicated that the primary drivers to meet ESG goals are coming from other market and social pressures,” as stated in the report by Ian Hughes, Senior Research Analyst for Internet of Things at 451 Research, a part of S&P Global Market Intelligence. “Increased efficiency and sustainability are competitive factors for enterprises. Digital transformation helps make these efficiency improvements, and many of the ESG requirements achieved are almost a bonus.”

The August 2022 report also reveals that more than three-quarters of respondents are confident in their company’s skills for IT and OT security, operations, and application development. However, that degree of confidence may be overestimated given the findings of a recent cybersecurity study that suggested nearly four of five IT respondents reported a ransomware attack at their company within the last year and that nearly three quarters (73%) were financially or operationally impacted by these attacks.

These findings indicate a clear need for focused, skills-based recruiting in the technology fields. It is critical that companies clearly identify specific needs, and recruit based on those needs. The “shotgun” approach of prior years (recruit everyone and then sort out the candidates) is too cumbersome and inefficient for today’s needs. A focused approach to attracting and retaining this kind of top talent can be a daunting process, particularly for companies that have not confronted the reality of their skills gap. An effective recruiting partner will work with the company to identify the right combination of skill and experience needed and  to find the top candidates and to convey to them what it is the hiring company requires.

[1] Quoting the report, “The term Industry 4.0 has evolved from a specific German standard (Industries 4.0) used in discrete manufacturing to be a more general description of digital transformation of the OT environment. Industry 4.0 is the application of technology such as IoT connectivity, data gathering and control, where that IoT infrastructure in turn feeds AI/ML and data-analytics-enabled process improvements, such as predictive maintenance. Industry 4.0 approaches lead to enabling new digital industry use cases such as autonomous robotics and connected workers.”

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