This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.
Author: Simon Torkington, Senior Writer, Forum Agenda
- AI and entrepreneurship will drive significant job growth.
- Developing nations are set to benefit as technology opens up opportunities.
- The Forum’s Special Meeting 2024 heard from global leaders on job creation.
We’re less than five years into the 2020s, but this is already shaping up to be a decade defined by fundamental shifts in the working lives of billions of people.
Working from home has become commonplace as a result of the COVID-19 pandemic, the arrival of generative artificial intelligence (AI) is transforming the working relationship between humans and technology, and the global economic landscape is being buffeted by geopolitical tensions that hint at long-term shifts in global trading relations.
Against this backdrop, the World Economic Forum convened global leaders to map out the path to maximum job creation for future generations.
Building the jobs market of the future
The Forum’s Special Meeting 2024 in Riyadh, Saudi Arabia heard a range of perspectives on developing a jobs economy that will provide meaningful and rewarding work for populations around the globe.
Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto said his country needed to create five million new jobs every year to employ a growing population. Participating in the discussion panel on Labour Markets for the Next Generation, Minister Hartarto said his country is “using digitalization as a new engine of growth”.
It’s a strategy particularly suited for emerging economies, as highlighted in the Forum’s 2024 white paper, The Rise of Global Digital Jobs. “For lower-income countries, the increase in working-age people presents a potential demographic dividend and could set off a virtuous cycle for economic output, tax revenues and material living standards, but is dependent on significantly large levels of high-quality job creation. Underemployment, especially for young people, is already a challenge in many such economies,” the authors point out.
With AI now at the forefront of digitalization, developing nations are looking to take advantage of the relative immaturity of their employment sectors, turning a negative into a positive. Rwanda’s Minister of Information Communication Technology and Innovation, Paula Ingabire, said: “One of the benefits, is that we don’t have legacy infrastructure and systems. And so if we’re able to be very laser-focused on how we deploy AI solutions for the societal problems we’re trying to solve then we gain the benefits, but we’re also able to leapfrog when it comes to technological development.”
Addressing the session AI, Productivity and Work: Can We Have it All?, Ingabire said AI could help people in low-paid work to increase their productivity and, potentially, their earning power.
AI could prove to be a transformative technology and net creator of jobs across a wide range of industry sectors, according to the Forum’s Future of Jobs Report 2023.
AI could be a force for job creation across a range of sectors. Image: World Economic Forum
The report finds that technological advancement through increased adoption of new and frontier technologies and improved digital access are expected to drive job growth in more than half of surveyed companies.
A major challenge of technology-driven job creation is ensuring the workforce has the required skills to succeed in these new roles. Reskilling existing workers will enable them to thrive as their jobs evolve in the age of AI, but education providers as well as employers must meet the imperative to give employees the skills to compete for the digital jobs of the future.
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Turning small businesses into a jobs powerhouse
The burden of creating the millions of new jobs required will fall disproportionately on small businesses. There was consensus at the Forum’s Special Meeting 2024 in Riyadh that these organizations must be freed from the regulation and red tape that can hold back their operations and ambitions.
Jay Collins, Vice-Chairman of Global Public Sector at Citi told the panel of Labour Markets For the Next Generation; “small- and medium-sized businesses can’t handle heavy regulation, they can’t handle heavy, slow bureaucratic government processes. So you have to create an enabling environment for everything from regulation to tax to legal to licensing. It’s a huge challenge that essentially allows for job creation.”
Collins emphasized his view by pointing out that “70% of the job growth in the OECD is small and medium-sized businesses. So if you can’t figure that out, you don’t have a proposition to deal with the future of work”.
The meeting also heard how the private sector and a new wave of entrepreneurship are driving job growth in Saudi Arabia, as World Economic Forum Global Shaper Emon Shakoor pointed out: “If we look at any economy, what are the building blocks of job creation? Very simply put, it’s start-ups. So, when young people graduate today, they must change their thinking to not only ask ‘where can I find a job’ but also ‘how can I create a job? How can I transform myself from a young person with a vision into a visionary entrepreneur?'”
According to Badr Al-Badr, CEO of the Mohammed Bin Salman Foundation, Saudi entrepreneurs are driving job creation beyond all expectations. “We set ourselves a target to create 10,000 jobs through the start-ups. A few years after we set this goal, we had to revise it. Why? Because we had already achieved it. This just reinforces what Emon is pointing out; the power of start-ups to create jobs.”
Global trends impacting jobs creation
In addition to frontier technology and the business landscape for SMEs, a wide range of geopolitical events is set to influence the creation and loss of jobs.
The green transition, the adoption of more climate-friendly business practices and the localization of supply chains are overwhelmingly positive forces, as the chart below, from the Future of Jobs Report 2023 illustrates.
A wide range of global trends is influencing job creation. Image: World Economic Forum
The green transition is seen by business as the biggest driver of job creation, with more than 52% of companies surveyed saying it would be likely to create new jobs.
The downside pressure on job creation arises from increased geopolitical divisions, the rising cost of living and sluggish economic growth.
On a positive note, economic downturns are typically cyclical and relatively short-lived. The push for net zero, a business mindset that looks for positive outcomes beyond profit, and the adoption of AI and other frontier technologies are trends likely to persist long into the future.
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