SOUTH EAST firms are suffering from the shortage of skilled IT workers, according to new research.

Research commissioned by Netscalibur, a pan-European provider of Internet services, suggested that as many as 36,000 companies in the area believe their business has suffered in the last 12 months by not being able to recruit the right IT staff.

The European Commission suggests that by 2003 the UK will lack 300,000 skilled IT workers.

Skills shortages and the inability to manage sophisticated applications have emerged as the major constraint on further uptake of Internet applications, with the report saying this will mean a continued rise in the outsourcing of Internet services.

Adair Turner, Netscalibur director and former CBI director-general, said: "The combination of savings and skills shortages means companies are going to continue to invest in the Internet and increasingly that investment will take the form of outsourcing."

The average size of company surveyed was 170 employees and the research shows a business of this size is making savings of £106,000 a year from using Internet services.