Here’s why upskilling is crucial to drive the post-COVID recovery

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Robert E. Moritz, Global Chairman, PwC

• Greater private-public collaboration on large-scale upskilling and reskilling initiatives could boost global GDP by $6.5 trillion and lead to the creation of 5.3 million net new jobs by 2030.
• Regions and economies that will see the biggest gains are those where the skills gaps are larger and there is the most potential to improve productivity.

A year ago, no one could have anticipated how dramatically everything would change. The way we live. The way we work. The way children go to school. The way we think about the future. Of course, even before COVID-19, the rise of automation and new technologies was transforming global job markets, resulting in the very urgent need for large-scale upskilling and reskilling. But now, after months of unforeseen hardship, this need has become even more important.

The pandemic has been a human tragedy, and the measures taken to tackle it have had a devastating impact on economies, disrupting the livelihoods of millions of people. It has exposed structural weaknesses in institutions and economies and has widened inequalities. People who were already disadvantaged have been hit particularly hard.

We have a pressing societal problem: how to equip people with the skills they need to participate in the economy – now and in the future. As outlined in the World Economic Forum’s latest Future of Jobs Report, half of all employees around the world will need reskilling by 2025 – and that number doesn’t include all the people who are currently not in employment. If we don’t act now, this skills gap will only widen.

With challenges come opportunities. Crisis events, like the pandemic, can and should shape economic thinking and represent a rare but narrow window of opportunity to reflect, reimagine, and reset priorities. So let’s seize this opportunity. We’re calling on governments, business leaders, and educators to join us in a global movement for upskilling.

As you’ll see in our new report – Upskilling for Shared Prosperity – published as part of Davos Agenda Week to mark the first anniversary of the World Economic Forum’s Reskilling Revolution Platform, there’s a clear social and economic case for upskilling. If we commit to giving all people opportunities to build the skills they will need to fully participate in the future workplace, it will, in turn, lead to a prosperity dividend. We’ve used economic modelling to estimate the amount of GDP growth we can expect from a productivity uplift if countries upskill their citizens in line with OECD and industry best practice.

Our key economic findings include the following:

• Greater private-public collaboration on large-scale upskilling and reskilling initiatives could boost global GDP by $6.5 trillion and create 5.3 million net new jobs by 2030.
• Economies where the skills gaps are larger could see the biggest gains as a percentage of GDP, including China (7.5%) and India (6.8%).
• 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.

While the data clearly supports a need for upskilling, we also recognize that GDP alone doesn’t give a complete picture of how an economy is doing. It doesn’t show, for example, the extent to which people have good, fulfilling jobs and which parts of the population are excluded. That’s why the World Economic Forum is working on a project to address this issue by creating a Dashboard for the New Economy.

Preparing people for the jobs of tomorrow is no easy task. There are challenges such as the disconnect between current education programmes and the skills which employers need now and in the future. 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 tomorrow.

Our report also demonstrates the broader advantages of developing good jobs – work that is safe, paid fairly, reasonably secure and motivating, and that emphasizes the uniquely human skills and traits of workers, thus delivering higher levels of productivity.

We know what we need from businesses, policymakers, and educators, and we have examples of successful collaborations that can be replicated and scaled. We know that, together, we can think boldly, beyond the boundaries of today, to reimagine our economic and social systems.

Here are four ways that we can work together to start turning this crisis into an opportunity for change:

1. Governments, businesses, and education providers should work together to build a strong and interconnected ecosystem committed to a comprehensive upskilling agenda.

2. Governments should adopt an agile approach to driving national upskilling initiatives, working with businesses, non-profits and the education sector, such as providing incentives to create jobs in the green economy and by supporting technology innovation.

3. Businesses will need to anchor upskilling and workforce investment as a core business principle and make time-bound pledges to act.

4. Educators should reimagine education and embrace lifelong learning to ensure everyone has the opportunity to participate in the future of work.

Our report is a call to action. A call for leaders from across sectors and geographies to work together to turn this crisis into an opportunity. If we are to realize the ambitions set out in this report, and effectively close the global skills gap, it will mean pulling on a series of levers that are all underpinned by public-private cooperation: lifelong learning, proactive redeployment and re-employment of people, funding, and the ability to anticipate what skills are needed in the jobs market. We must address both the supply and demand sides — upskilling people and having good jobs ready for prepared workers. This will necessitate collaboration and commitment among governments, businesses, and educators.

While the challenges are large, they are not insurmountable. Because in times of great crises, we can respond with great purpose. It’s time to seize the opportunity before us and create lasting change for generations to come.