Preparing people for the new world of work

The opportunity

As the types of jobs that constitute a modern economy continue to evolve, so do the skills required to do them. We need to ensure our systems for preparing, educating, training and retraining the current and future workforce keep up with the pace of digital transformation, ensuring that our citizens are well placed to benefit from the opportunities this transformation provides.

Not only are new skills in demand today, but there is a growing recognition that people will need to engage in regular reskilling throughout their working lives, including both technical skills and professional or “soft” skills. A person’s ability to learn new things, collaborate, communicate and adapt to changing environments may in fact become the most important set of skills for long-term employability. Together, the increased needs from employers and individuals for the right training at the right time create opportunities for technology.

The challenge

For companies to thrive in a digital economy, the skills of employees must keep pace with advances in technology. When a mismatch occurs, the outcome can be devastating. In the manufacturing sector in the United States, as many as 2 million jobs could go unfilled during the next decade because of a shortage of people with the right technical skills.[26] In Europe, a 2013 survey found that skills shortages caused major business problems for a third of EU employers.[27] And in China, McKinsey estimates that demand for skilled labor could outstrip supply by 24 million people by 2020.[28] Shortages like these pose serious competitive issues for companies and threaten the long-term economic health of countries around the world. More than that, they threaten to widen the income gap between those who have the skills to succeed in the 21st century and those who do not.

Failing to address this mismatch between the business need and individual skills will leave many people facing an uncertain future — in particular, groups who are already at a disadvantage: women, young people, and those in rural and underserved communities. Closing this divide is an important factor in addressing income inequality and one of the most important actions governments can take to strengthen their economies. Recognizing this, the United Nations has established several related targets as part of the Sustainable Development Goals, including 4.b, which states: “By 2020, substantially expand globally the number of scholarships available to developing countries … for enrolment in higher education, including vocational training and [ICT].”

There is a great deal that employers can and must do to address the skills divide, from better sharing of data on their skills needs to new approaches to hiring to retraining and reskilling their own workforce. Yet their efforts alone will not be sufficient to reach the full need that exists. A CapGemini and MIT survey found that although 87 percent of companies feel that digital transformation is a competitive opportunity, only 46 percent were investing in developing the digital skills in their workforce needed to capitalize on these opportunities. If the situation is challenging for employed workers without ICT and technical skills, it is far worse for the unemployed and underskilled.

Policy recommendations

Digital literacy and ICT skills will increasingly be fundamental requirements for most jobs and for continued lifelong learning. According to a study of job postings by Burning Glass Technologies, 8 out of 10 middle-skills jobs require basic digital literacy as a prerequisite for employment.[29] Primary, secondary and postsecondary schools as well as worker retraining programs must offer technology education and information and communication technology skills training that is current, relevant and aligned with workforce demands. Fortunately, there are a range of innovative and low-cost approaches to help individuals become digitally literate. For its part, Microsoft has created and made available a wide range of curriculum, content and programs to support the needs of all learners across the digital skills spectrum — from foundational digital literacy to computer science education. Also, new computing devices and services — often enabled by the cloud — hold tremendous promise for one-to-one learning programs, offering richer, more personalized learning environments. Digital literacy can also be developed by integrating computing devices, software and online services into instruction for other subjects, which can help familiarize students with information and communication technology and cloud computing without them even realizing it.

Computer science and other science, technology, engineering and mathematics (STEM)-related skills are in demand and will require greater educational pathways throughout the education system. Policymakers must take steps to strengthen and increase computer science, data science, cybersecurity and STEM education throughout the education system with a particular focus on under-represented student populations. It is widely acknowledged that there is a mismatch between today’s skill base and the future skills that are required in a data-driven and AI- enabled economy. Issues exist all along a training continuum that starts with primary and secondary education, extends to those entering the workforce, and continues to those who need to be reskilled and upskilled. The basic school curriculum in many countries still does not include exposure to computer-science education, which helps develop a learner’s logic, problem-solving and creative reasoning — skills that are core to adaptability in today’s work environment. In the United States alone, the Bureau of Labor Statistics estimates there will be more than 1 million American jobs created by 2020 that require a bachelor’s degree or higher in a STEM field.

Promote entrepreneurial skills. Policymakers increasingly see entrepreneurs and small-business owners as essential to job creation and economic growth. Governments can promote entrepreneurship and small-business creation by partnering with companies and nonprofits to provide young people with the technology, skills and connections needed to launch businesses and create jobs for others. Building their businesses on cloud computing platforms allows them to pay only for the computing power their business needs and easily scale up as it grows.

The current workforce will need access to high-quality worker retraining programs and ongoing education. Governments should seek to meet the needs of people at all stages of the workforce continuum — students entering the workforce, unemployed and underemployed workers, and employed workers who need help gaining new skills to ensure their long-term employability. Governments should also think broadly about what training to offer and how to make it widely accessible. A first step is to identify the skills that are most in demand — a task that the IT industry is well-placed to assist with. With that knowledge, governments can develop and deliver high-quality workforce retraining programs or provide incentives and financial resources for private and nonprofit organizations to do so. Responsibility for identifying and addressing retraining needs shouldn’t fall solely on governments. The private sector and educators also have an essential role to play. Education providers don’t always offer training in the skills that employers are looking for; goals for educational attainment should also include outcomes related to employment, skills and advancement. The private sector has the real-world experience and insights to identify skills shortages and drive educational best practices. They are also essential partners in educational delivery. Solutions should consider blended learn-and- earn models such as registered apprenticeship and other models to combine secondary and post-secondary education and work in one experience.

Improve access to online services. The availability of online services in remote and underserved communities can be instrumental in expanding the quality and accessibility of education, training and broader civic engagement. The World Bank found that across 12 African countries, 9 percent of people with mobile phones or an internet connection use them to access formal education services every day, and 33 percent use the internet at least occasionally to find free education content.[30]

Encourage innovation and collaboration between the private, nonprofit and public sectors. Governments can also encourage entrepreneurship through programs that help people start new businesses. Programs that offer startups and entrepreneurs easy and affordable access to software, marketing support and visibility will help foster business success. Use technology and data to build a more dynamic skills-based labor marketplace that aligns job seekers to training and education providers to employers. Job seekers will better understand what skills are needed and where they can find the appropriate training and education, and employers can find the skilled talent they need. They will also enable education and workforce systems to access a variety of choices to achieve lasting career success, help employers find the skilled talent they need to grow, and make it possible for educators to train people with the skills required to compete in today’s economy.