The rise of automation and digitisation has transformed the world of work – increasing productivity but also creating a major societal problem: the stark mismatch of people with the right skills for available jobs.
The Covid-19 pandemic has accelerated and exacerbated these trends. As a result, the need to upskill and reskill people so they can participate in the economy is more critical than ever before, in turn creating more inclusive and sustainable economies and societies where no one is left behind.
In a new report, Upskilling for Shared Prosperity, launched during the Davos Agenda 2021, PwC and the World Economic Forum make a clear case for why leaders from all sectors should prioritise upskilling now.
The report calls on governments to adopt an agile approach to driving national upskilling initiatives, working with businesses, non-profits, and the education sector. This includes providing incentives to create jobs in the green economy and supporting technology innovation.
The report estimates that if countries upskill their citizens in line with OECD industry best practices, this would lead to additional global GDP growth of $6,5-trillion and the creation of 5,3-million net new jobs by 2030.
Key economics findings include:
- China ($1 986-billion) and the US ($902-billion), followed by India ($571-billion), Spain ($132-billion) and the UK ($119-billion), have the most to gain economically in absolute terms from closing their skills gaps.
- Looking at the country findings as a percentage of GDP, China (7,5%), India (6,8%), Spain (6,7%), Australia (5,9%) and South Africa (4,4%) top the table.
- From a regional perspective, Sub-Saharan Africa (7,8%) and Latin America (7,7%) are expected to see the biggest gains as a percentage of GDP if they start investing in upskilling now.
- Some of the more developed economies will see smaller gains ranging from 2% in Japan to 0,3% in Germany, given that their productivity and skills base are already stronger than in emerging markets.
- Providing an upskilled workforce could shift the global economy to be more knowledge intensive, with technology and machines taking over routine tasks and people working alongside them
- Half of the additional GDP globally is expected to be gained in the business services, consumer services and manufacturing sectors.
- Sectors that have suffered from low-wage growth and output for decades could reap significant benefits from upskilling. Health and social care could add $380-billion additional GDP through upskilling by 2030.
Recognising that GDP does not give a complete picture of how an economy is doing, the quantitative data in the report is complemented by qualitative analysis which demonstrates the broader advantages of developing good jobs – work that is safe, paid fairly, reasonably secure and motivating, and that emphasises the uniquely human skills and traits of workers, thus delivering higher levels of productivity.
The development of transferable skills such as critical thinking and creativity is crucial to helping people prepare not only to meet the workplace demands of today but also for those of the future.
Bob Moritz, global chairman of PwC, comments: “Crisis events, like the pandemic, can and should shape global economic thinking. They represent an opportunity to reflect, reimagine, and reset priorities. It is clear that our economies aren’t currently delivering what people need.
“By giving all people opportunities to build the skills they will need to fully participate in the future workplace, we can start to create more inclusive and sustainable economies where no one is left behind.
“We’re calling on governments, business leaders, and educators to join us in implementing an ambitious global upskilling agenda.”
Saadia Zahidi, MD ofthe World Economic Forum, adds: “To prepare workers and students for the labour markets of tomorrow we must address both the supply and demand — upskilling people while creating new, decent jobs.
“Achieving this will require concerted effort and collaboration among business, governments, and education providers.
“But, as this report so clearly lays out, the benefits of investing in upskilling can not only drive the economic recovery but help shape a more inclusive and sustainable future of work.”
The report puts forward four recommendations for how to deliver a global upskilling agenda:
- Governments, businesses, and education providers should work together to build a strong and interconnected ecosystem committed to a comprehensive upskilling agenda.
- Governments should adopt an agile approach to driving national upskilling initiatives, working with businesses, nonprofits and the education sector. This includes providing incentives to create jobs in the green economy and by supporting technology innovation.
- Businesses should anchor upskilling and workforce investment as a core business principle and make time-bound pledges to act.
- Education providers should reimagine upskilling and reskilling and focus on lifelong learning to ensure everyone has the opportunity to participate in the future of work.
Sub-Saharan Africa (SSA)
With a GDP increase of 7,8% SSA could enjoy one the biggest boosts to GDP from the increase in productivity achieved through upskilling. This is largely due to the region’s workforce and scope for improvement.
The report states that by 2025, SSA will be home to the world’s largest workforce and in 30 years, the region’s youth are expected to represent one-third of the world’s youth population.
The ongoing challenges of employment and skills can turn the demographic dividend into a demographic liability unless it is accompanied by improvements in both education and a restructuring of the jobs market.
The rate of youth unemployment is two or three times as large as the rate for the rest of the workforce.
The potential $24-billion gain in GDP from closing the skills gap by 2030 for South Africa is relatively small compared to other regions. However, this equates to a relative boost to GDP of 4,4% by 2030, which ranks as high, according to the report. Industries such as business services, manufacturing and the energy and utilities sectors stand to gain the most.
Dion Shango, CEO of PwC Africa adds: ““This is a critical time for business, educators, government and other stakeholders to work together in a more agile, resilient and inclusive manner. Greater collaboration and coordination on upskilling are needed across the African continent. Added to this, businesses need to commit to meaningful and sustained investment in upskilling initiatives.
“PwC Africa has embarked on a number of initiatives to upskill and empower its people, including the launch of our global New World New Skills campaign. We also have other initiatives in place where we have invested and made commitments to the upskilling of young people to broaden their knowledge and expertise for the future workplace.”