This report examines the digital and creative sector in the UK, the challenges it faces over the medium term and how they can be addressed through skill development and thereby bring about growth and contribute to the recovery of the UK economy. The sector comprises digital technology, and creative activities. The digital technology sub-sector provides the infrastructure and platforms through which creative content is often delivered. While the creative industries include film, TV, radio, computer games, publishing, advertising, music, performing/visual arts, design and cultural heritage. Over the years there has been greater synergy between the digital and creative sub-sectors. For instance, digital technology is transforming the creative sector (particularly creative media industries) as well as being an important driver behind the growth of ICT products and services.