Top IT & Software Development Challenges in the UK

The software and IT services sector plays a significant role in the UK economy, with the UK’s Software Development market projected to reach £36.78 billion by 2029, growing at an annual growth rate of 6.03% from 2025 to 2029.

Research has found that 93% of businesses believe there is a gap in IT skills within the UK jobs market, and 35% of UK businesses class the competition in the IT jobs market as a major challenge.

Businesses are now at increased risk of cyber threats, whether it’s through ransomware or phishing attacks.

In fact it’s thought that as little as 4% of UK firms are fully equipped to defend against modern day cyber threats.

The number of Cybersecurity professionals globally stood at 5.46 million in 2024. The UK has the largest cybersecurity market in Europe, with large and growing demand for Cybersecurity professionals. There are about 67,300 cyber jobs in the UK, which is up 6,600 from the previous year. Cybersecurity has generated the UK revenue of £13.2 billion, which was up by 12% year-on-year.

There are a number of skill shortages within IT and Software Development, making the talent pool small in relation to the demand for people with these skills. Hiring this talent is more competitive than ever, with research showing that over 75% of IT Executives, including CIOs, CISOs, IT Directors, and VPs are finding it difficult to attract IT talent, which is up from 69% the prior year.

What are some of the main IT & Software shortages the UK is seeing?

Software Developer Shortages

The UK’s Software Development market is projected to reach £36.78 billion by 2029, growing at an annual growth rate of 6.03% from 2025 to 2029.

There are many skill shortages across Software Development in particular, as competition for well-qualified talent has increased over the last 12-months in particular.

There is currently a shortage of Software Developers, these workers are consistently voted within the most difficult IT related roles to recruit for by IT professionals and is providing to be a key challenge for businesses.

Approximately  27.1% of Software Developers have spent five to nine years coding, and over 20% have been coding for 10 to 14 years – meaning the needed to skill the workforce to close the Software Development shortage needs to be happening right now.

Cyber Professionals Shortages: 

There are about 67,300 cyber jobs in the UK, which is up 6,600 from the previous year. Cybersecurity has generated the UK revenue of £13.2 billion, which was up by 12% year-on-year.

But while Cybersecurity professionals are growing fast, the demand is growing faster.

Cybersecurity employees have become some of the most in-demand workers of today’s labour force. Many organisations are finding specific roles being particularly difficult to fill, with skill shortages in Cloud Security, Security Operations, and Network Security Experts.

In 2023, China was the country with the biggest Cybersecurity workforce gap, with a shortage of over 1.7 million Cybersecurity professionals.

Another major challenge facing the IT & Software industry is AI regulation and misuse.

AI is presenting many opportunities for businesses, with 73% of companies planning to increase their use of AI throughout 2025.

The rapid development of AI and machine learning that we’ve seen over recent years has created and is going to continue to create new jobs.

Yet companies including Apple, Samsung, Goldman Sachs, and Bank of America have even gone as far as prohibiting employees from using ChatGPT at all, primarily due to data privacy concerns.

Navigating AI regulations and data privacy concerns is going to be an ongoing issue facing the IT & Software industry.