Employers need more people with technology skills but a new study has found that fewer students are taking IT subjects at school.
The survey by the Learning and Work Institute and WorldSkills UK warns that the UK's existing shortfall in digital skills will be worse in years to come unless schools attract greater adoption of IT courses at GCSE level.
The report notes the decline is "largely explained by the government's attempt to phase out the ICT GCSE, which was seen as insufficiently rigorous or valued by employers, and to replace it with the more challenging computer science GCSE."
In that period, computer science entries more than doubled, but it's still led to an overall decline of pupils taking ICT.
Only 48% of UK employers believe young people are leaving school with sufficient advanced digital skills. Moreover, 76% of businesses think a lack of digital skills would harm profitability.
"Assumptions that the current digital skills gap will be closed in the months and years to come are misplaced," said Neil Bentley-Gockmann, CEO of WorldSkills UK.
"While demand has increased, the number of people taking IT courses across GCSE, A-Level, further education and apprenticeships has declined in recent years," said Stephen Evans, chief of Learning and Work Institute.
The study also found that females were were underrepresented at all levels of study in IT courses. Females represented 22% of GCSE entrants in IT subjects, 17% of A Level entrants, 23% of apprenticeship starts in ICT, and 16% of undergraduate starts in computer science.
The survey, commissioned by WorldSkills UK, gathered the opinions of over 2,000 young people about their perceptions of their digital skills, awareness of employer demand for digital skills, and interest in a career in the digital sector.
It found that 88% believed digital skills will be essential for their career, matching the 91% of businesses who viewed digital skills as critical for a young person's future career.
Most young people (62%) were confident in their basic digital skills but only 18% were confident they had the advanced digital skills the market demands.
There's a significant gender gap between those attracted to a career requiring advanced digital skills. Some 62% of males were interested in such a career while only 42% of females were.
The study found there could be more done to improve the quality of career advice information that students are getting from schools. Only 53% believe they were getting adequate advice about careers requiring advanced digital skills.
Bentley-Gockmann thinks teachers need to understand the range of career options students have if they acquire advanced digital skills.
"I think there's a challenge with the teachers themselves not understanding the possible careers – there's a big opportunity for employers to go into schools to explain the range of job opportunities and help join the dots between what young people study in school and what that could lead to as a career," he told BBC.
The study also found a 20% decline in the number of enrollments in further education and skills courses in ICT since 2017 when there were 300,000 enrollments and 192,000 course achievements. In 2019-2020, there were 247,000 enrollments and 138,000 completions.
"Other major global economies are ahead of the UK in valuing high quality digital skills to help drive their competitiveness and productivity, we need to act now to ensure the UK is not left behind," said Bentley-Gockmann.