Do we have enough talent and power for the future of AI?

Speaker A: It's a very uncomfortable end to June with temperature records being broken across Europe. Yet the technology world is still moving forward, still talking about AI and in particular the workforce and infrastructure that underpins it.

Speaker B: Do we have the talent to meet the demand for AI? Do we have the power to keep our data centers operational? And can the European Union get us off our dependence on Google Workspace and Microsoft 365? You're listening to the IT Pro podcast.

Speaker A: Hi, I'm Bobby Hallard.

Speaker B: And I'm Jay McCallion. And uh, joining us this episode, as ever, uh, at the end of the month, is IT Pro's news editor, Ross Kelly. Ross, welcome back to the show.

Speaker C: Hello. I'm not melting like you guys, but nearly there, nearly there.

Speaker A: And uh, today we're talking about some of the biggest news stories from the month gone by. So first up, AI talent shortages. According, uh, to new research from native teams and Robert Waters, the UK is heading for an AI talent deficit with more than half of our roles going unfulfilled by 2028.

Speaker B: Yeah, and this is similar to some research from Gartner which suggested the same, but specifically for supply chains with a 387% increase in AI roles between Q1 of 2023 and Q1 of 2026. So sort of it's something that's definitely already in action. I don't know what anybody else thinks here, but I am loathe to call this a new trend.

Speaker C: Yeah, I feel like skills shortages have been a big talking point in the UK for, you know, the best part of a decade at this point. It's, uh, not so something limited to the UK either, you know, in the us, across Europe, where we're constantly talking about this. I think what's interesting is when you add obviously AI into the equation here and you know, this study essentially suggests that we're going to have, you know, 300,000 open roles, um, in terms of AI skills, um, but we have a supply of around 137,000 people in this domain. That's obviously a massive shortfall, but I think it uh, kind of highlights long running issues with digital skills. In the uk, we're constantly talking about this from primary school upwards. And when you go down into particular demographics, when you look at women, um, a lot of the talking points have been around getting women into the tech industry into digital roles after university or just encouraging them to take these roles in the first place after high school. So yeah, I don't think this is anything new. I think it's just wrapped with AI and the concern there is that given the focus of the country, the government at the moment, in terms of positioning the UK as a great place, a leading global AI economy, it is a concerning. The numbers look very jarring.

Speaker B: 100%. And that was my first initial thought, was this is just a new element of the tech skills shortage. So there's partly that. It also partly reminds me, and I think we may have written on this at the time, but job ads appearing requiring you to have like 5 to 10 years experience in Rust programming language when Rust had only been around for three years. So there's an element of that. It's like, well, of course nobody's got the skills for this new technology because it's new. Um, and there's a question also of where it's going. But the other thing would be, I thought, being that cocky perhaps I thought that the whole point of AI was that it was going to reduce the need for workers doing things. So how come it's actually increasing the problem?

Speaker C: Yeah, and this is the thing I'd be interested to, you know, how many of those are dedicated, you know, AI developer roles, for example, or software engineering roles. When you're saying, you know, AI is going to require 300,000 positions across the UK first and foremost, that makes it, uh, you know, one of the largest single employment sort of groups in the entire country. But yeah, I think this is definitely a case of we've been dealing with the skill shortage for 10 years, this is expected to get worse and now that AI is here, it's just going to send it super, you know, supersonic.

Speaker A: I do wonder how much of the implementation of AI and the news stories of people getting laid off or people training AI and then getting laid off. How much of that weighs on the thinking of graduates and people looking at AI careers and thinking maybe this isn't for me or maybe this isn't what we should be doing.

Speaker C: I mean, it's, uh, a paradox, isn't it? Yeah, AI is going to remove, you know, destroy, what is it, half of entry level roles within the next decade. Um, you know, white collar rules are going to be impacted, but at the same time we're dealing with, you know, a massive deficit specifically for AI rules. I mean, yeah, the messaging here is so all over the place, so consistently that I think a lot of people are just, yeah, maybe a bit jarred by it all.

Speaker B: Also potentially the issue is that these are not entry level roles that we're talking about. We're talking about sort of mid career experience that these Roles are going to open up. So you end up with the talent supply pipeline problem that we have spoken about before on this very podcast that, that you know, if you completely cut the legs out of under the entry level jobs by automating everything, you're going to end up with a problem because you end up with nobody. You know, there will be no mid career people as people towards the end of their career retire and mid career move up. Uh, there'll be nobody to fill those jobs because nobody has the experience because we got rid of those entry level jobs.

Speaker C: Yeah, there's no talent pipeline there which I think is like really short term thinking. You need people starting out, learning the ropes and then moving into these roles because people age, if we're being really honest here, people move on, people age, they move into different roles and you're going to have to fill them. I think what is interesting about this report is that it mentioned the fact that the UK is the most active global AI talent hirer, which shows that there is a focus there on attracting AI talent. This is something that a lot of organizations are aware of. They know there's a shortfall, a deficit here, so they are making efforts to plug those gaps. But again I don't think that differs to anything we've seen over the last 10 years in terms of software developers, cybersecurity analysts, anyone in digital marketing workers. I think this is, yeah, just skill shortages. AI wrapper.

Speaker B: So moving on from the talent behind AI to its power needs, does the UK have enough juice for its data centers now? According to the real estate agency Savills, the UK is running on fumes, to quote them. What do we all think about this

Speaker A: when the report specifically they talk about national vacancy rate which has fallen from 27% in 2016 to just 8% the first quarter of this year. And those get even tighter when you look at the cities. So like London and Manchester are the two most uh, power hungry ones, whereas the rest of the country there's a problem, it's not as immediately available. So we've got power constraints outside of our cities is what they're kind of saying.

Speaker B: I felt like there were two stories here, which is to do with tenancy and is to do with power, unless I've read this wrong, which is possible lad. So do let me know if I have to my mind having greater tenancy occupancy within a data center. I am really not sure how this is a bad thing. Like surely it's a good thing. So what they've said is that the national vacancy rate has fallen from 27% in 2016 to 8% in the first quarter of the year. So slightly putting aside the kind of energy question here because like I said, I feel like there's two things happening in this article, in this report. To my mind, having nearly full tenancy is a good thing. If you're uh, have 27% vacancy, then the data center is not being its most efficient. You want it to be full or nearly full. Certainly if you're a data center operator, you do. So I don't, I really genuinely do not understand what the problem is with that. Now obviously the higher occupancy, the greater the energy draw. And if you've got a problem with energy supply, then you know, greater tenancy or greater occupancy rather becomes a problem. But yeah, I'm just not, I understand the story and I kind of, yeah, I understand the problem of electricity demands sitting here in a heat wave. People are already talking about, you know, how if everybody deploys air conditioning into their houses then it's going to cause a problem for the national grid. I understand that. But the bit about occupancy being so high, I'm baffled that this is allegedly a negative part of this story.

Speaker C: I think a big part of this is the convergence around London and Manchester. So you're right in saying that obviously occupancy rates, that's a positive sign that shows that capacity is being used there and there's obviously benefits to that. I think longer term. The report highlighted concerns about capacity. If vacancy rates are dropping and then a lot of data centers in say London, Manchester, your bigger cities are then being pushed to their limits, then that's concerning when you look at say the pace of infrastructure build outs in these areas and across the country. What I do find interesting is when you get outside London and Manchester, the report said activity is limited, reflecting how difficult it remains to deliver network density, occupiers, ecosystems and timely access to power. And I think that speaks about the broader infrastructure around data center infrastructure outside uh, of the Golden Triangle in Manchester and whatnot. If we're talking about AI being this great equalizing force for the UK economy, then you need to have the adequate infrastructure elsewhere across the country. It's not just London and the Southeast, guys. He says with his tartan tinted glasses

Speaker B: on, uh, I think people in Manchester might be surprised to hear that they've moved to the southeast.

Speaker C: Well, yeah, I mean they're further north so you know, slight pass, but think it does raise questions about that. Uh, you know, broader capacity sort of question there. When you go back to 2023, 2024, I think the former, now former chief executive, the National Grid raised concerns about being actually able to keep up with demand in the future. They've mentioned that there's potentially going to have to be an overhaul of the UK's grid infrastructure to compensate for this. So I think while everybody's focusing on the shiny aspects of AI, uh, it's the nitty gritty underlying infrastructure that's really important there. And the UK potentially hasn't been keeping pace on that front historically compared to say, you know, parts of the United States, California, Silicon Valley in particular.

Speaker B: I would love to know whether or not this problem is replicated elsewhere. So I mean there isn't a national grid. There are three grids in the us. You've got like the, the one in the west, the one in the east and Texas. But you say in other European countries like France where you've got a uh, lot of nuclear power and I think it's quite sort of dotted around so you do have like urban hubs where lots of stuff happens or I mean Germany doesn't run its nuclear power plants anymore, uh, due to reasons that also slightly baffle me. But you know I, I just, I would love to know if this is a, a UK problem or a more widespread problem. Now obviously Savills are not going to answer this question for me because they are a UK based real estate agent and I think it's probably worth, I'm not quite sure what that angle is but it is always worth remembering that they as a real estate agent presumably have a dog in this fight somehow.

Speaker C: I mean Savills can't answer it but McKinsey can. So we covered this in October 2024 and essentially they said in Europe specifically data center energy demands are going to triple by the end of the decade. Now this is two years ago. So you know, if they were to release this now, it might be the same, it might actually be a higher expectation on their part. But a big part of this was around investment in sustainable power sources. So green renewable energy but also upgrades to grid infrastructure. So yeah, this is, you're talking hundreds of billions in funding on this front. So it's not just something in the uk, you know, we're not just uh, we're not alone in this. I guess it's a, ah, consideration across Europe and individual countries, you know, France, Germany, a lot of the larger economies across Europe. So yeah, Saviles can't answer it but like I said McKinsey can. McKinsey can answer most.

Speaker A: I, um, am keen to know why Savills is in this, in this news story and what stake has it got in this news story. Is it selling out data center space? What's going on here?

Speaker C: I, uh, wonder. I wonder.

Speaker A: So moving on to Euro Office, which is the European Union's alternative to Workspace or Microsoft 365, it's had a rocky start to life. So why has it upset the Document Foundation? Ross?

Speaker C: So yeah, essentially this was an open letter around the time of Euro Office's launch, essentially questioning the sovereignty credentials as well as the use of a Microsoft based document format. So essentially, you know, Euro Office, for people that don't know, is like Bobby said, an open source alternative to your big tech productivity platforms. And you know, this ties into broader sovereignty concerns in Europe and whatnot at the moment around separating or reducing our reliance on US tech. I think from a holistic perspective this is a great idea but the way they framed this, the Document foundation weren't very keen on the messaging. So yeah, open source should rest on transparency, not deception is what um, the open letter said. There are two genuine open source Office suites built from source code that originated in Europe. So these are openoffice.org, that launched in 2001 that was based on Star Office source code and then LibreOffice in 2010. So yeah, I can see why they'd be miffed at the idea that this is the first open source alternative in Europe because technically it's not. But a big part of this is around the sovereignty credentials. So EuroOffice relies on Office Open XML. So that's a document format, uh, used and you know, developed, controlled by Microsoft. So that's used in documents like spreadsheets and whatnot and PowerPoint. You know the argument here is that because it uses that it's a de facto ally of Microsoft and it's not truly sovereign because it is still technically beholden to, you know, an American tech giant. Yeah, I think this kind of blew way out of control. I can see why, you know, when you're talking about, you know, quite, ah, a hot topic at the moment, something particularly sovereignty, I can see why, yeah, LibreOffice and the document foundation would be annoyed around this, around the claims, around the messaging, around, you know, how this is framed. It's worth noting that they edited their open letter and kind of toned it down after the fact that. So we're going to always have these questions around Open Source. What is truly open source? You look at Say meta. Whether it's open source, AI claims. We've covered this before where people in the community are saying this isn't true open source.

Speaker B: Not to offend any guests of said podcast, but it does feel sometimes like a bit of a no true Scotsman argument when it comes to open source that, oh, this isn't quite actually open source because like this tiny bit of it is, is not actually. Or, or this isn't open source because it's actually based on this thing that is a commercial thing belonging to, to somebody else. I think it's possible that the Document foundation has a point that what the European Union has declared is like this open source saying, um, truly sovereign, whatever, isn't. It's kind of halfway there. But I do also wonder if there's sort of, uh, almost a back compatibility, stepping stone type thing going on because already lots of organizations within the European Union will have been using Microsoft, so it might just be easier to have something that's based on Microsoft standards initially, before then transitioning to something else. That's. I don't know. That's something that I did wonder about when I read this.

Speaker C: Yeah. So the Document foundation said that the open document format should basically be used as a baseline for what should be a sovereign productivity suite. In fairness to Euro Office, one of the developers behind this nextcloud, when we reached uh, out to them, they did say that, you know, file formats like Office Open xml, you know, they are in their words, quote, a hindrance to sovereignty. And yeah, they are looking to add or improve ODF support. I think that's like you said, it's a stepping stone. If we dive in headfirst here, it might create more problems than it needs to. If they're, you know, they have a baseline now and if they want, they've stated their intent to improve on this and they want to essentially allow organizations to transition to open document formats. So I think you also need to remember that a lot of users already use these other formats. So Office Open xml, a lot of organizations will be used to using these formats and they're working with them. So giving them the opportunity to come into the fold initially and then transitioning towards open document formats then. Yeah, that's a good thing. I think this was definitely blown out of proportion. A lot of coverage was quite reactionary. Um, you've seen a lot of headlines around, you know, not truly sovereign, etc. Etc. So I definitely think, you know, the media kind of fanned the flames here. But the initial sort of furor was from TDF and their claims.

Speaker A: The initial stories, when I saw the announcement of your office was more. More that they were trying to ditch the dependence on, you know, Silicon Valley stuff like Google and Microsoft. But it kind of just seems more like they want this for, uh, government offices. More like they just want security in that respect, rather than the rest of Europe to take this on, if that makes sense.

Speaker C: Yeah, I mean, when you look, you know, at countries like France, they've taken big steps on this front over the last couple of months in terms of, you know, some of the software that they use in government agencies. A lot of public sector organizations across Europe are looking at this. I think sovereignty is definitely, you know, we talk about AI all the time, but I think sovereignty is definitely up there in terms of, you know, the big talking points in Europe, um, in the US perhaps less so, but it's definitely becoming a more popular trend purely because a lot of organizations in the US need to consider this, especially if they're working across both sides of the pond or if they're vendors and providers. So, you know, taking this into account, that this is what a lot of European organizations and IT leaders are concerned about is, yeah, it's massive.

Speaker A: Well, unfortunately, that is all we have time for this week. My thanks to Ross.

Speaker C: Great to speak as always.

Speaker B: As always, you can find links to everything we've spoken about today in the show Notes and Even more@itpro.com you can

Speaker A: follow us on LinkedIn and YouTube and while not sign up to the daily newsletter to receive all our, uh, latest news, analysis and reviews direct to your inbox.

Speaker B: We'll be back next week with more from the world of it, but until then, goodbye.

Speaker A: Goodbye.