A decline in early-career tech talent could cut GBP £14.5 billion from the UK economy in 2035, according to research by Cebr and SThree. The study links a small fall in technology-focused graduates to a lower projected contribution from the tech sector.
The research estimates that the UK tech industry is on course to contribute more than GBP £186 billion to the economy in 2035. A 2% decline in graduates in technology-focused subjects would reduce that figure to GBP £172 billion.
The findings come as entry-level hiring in the sector comes under pressure. The Institute of Student Employers recently reported that graduate hiring in UK tech fell 46% over the past year, as employers cut recruitment for junior digital and coding roles.
The trend coincides with wider labour market changes as artificial intelligence alters some tasks that have traditionally formed part of junior roles. The report argues that weaker routes into the industry could affect the future supply of workers needed by technology businesses.
Technology-related industries currently contribute GBP £122 billion to the UK economy and support nearly 1.8 million tech-related jobs across the country, the study said.
Graduate pipeline
The report forms part of a wider study, The STEM Skills Outlook, which examines how changes in the supply of science, technology, engineering and mathematics workers could affect growth across more than 40 economies. It also includes a global risk register ranking economies by skills shortages and their implications for future growth.
The UK analysis focuses on how sensitive long-term output forecasts are to changes in the number of technology graduates entering the workforce. The modelling suggests that even a modest reduction in the graduate pipeline would have a material effect on the projected size of the sector a decade from now.
Rakesh Patel, Managing Director, UK and Rest of Europe, SThree, said: "If those entry-level routes narrow further, the UK risks deterring the next cohort of graduates needed to sustain tech growth over the next decade - and that comes at a huge cost to the economy. The UK's tech sector is already a major contributor to growth, which is why even a marginal weakening of the talent pipeline could cost the country billions. Entry-level positions give graduates commercial experience that underpins long-term productivity and innovation. So as AI reshapes parts of that work, it's increasingly important for employers and policymakers to strengthen the pathways from education into the workplace."
The data points to a broader concern for policymakers and employers as the government looks to high-productivity sectors to support economic expansion. A sustained drop in graduate supply would not only affect junior-level hiring, but could also reduce the pool of experienced workers available to the sector later in the decade.
Economic outlook
Sam Miley, Head of Forecasting and Thought Leadership, Cebr, said: "Periods of technological transition often create temporary mismatches between labour market demand and workforce development. Computer Science remains one of the UK's most popular degree subjects, but rising living costs, larger student debt burdens and growing scrutiny over graduate outcomes could weaken future demand for technology degrees over time. That matters because the UK's wider growth ambitions are increasingly tied to high-productivity sectors such as AI, advanced technology and digital infrastructure, all of which depend on a steady supply of specialist talent. The STEM Skills Outlook shows how quickly long-term economic projections can shift when workforce trends begin to change."
The report places the issue in an international context by examining how dependent economies are on technology and advanced manufacturing, and how prepared their workforces are to meet that demand. For the UK, it suggests labour supply in technical fields will play a significant role in determining how much growth the sector can deliver.
The modelling underscores the scale of that dependence: a 2% fall in technology-focused graduates would reduce the projected 2035 contribution of the tech sector from more than GBP £186 billion to GBP £172 billion.