The global economy faces a reskilling crisis with 1.4 million jobs in the US alone vulnerable to disruption from technology and other factors by 2026, according to a new report, Towards a Reskilling Revolution: A Future of Jobs for All, published today by the World Economic Forum.
The report is an analysis of nearly 1,000 job types across the US economy, encompassing 96% of employment in the country. Its aim is to assess the scale of the reskilling task required to protect workforces from an expected wave of automation brought on by the Fourth Industrial Revolution.
Drawing on this data for the US economy, the report finds that 57% of jobs expected to be disrupted belong to women. If called on today to move to another job with skills that match their own, 16% of workers would have no opportunities to transition and another 25% would have only between one and three matches.
At the other end of the spectrum, 2% of workers have more than 50 options. This group makes up a very small, fortunate minority: on average, all workers would have 10 transition options today.
The positive finding of the report is the huge opportunity identified for reskilling to lift wages and increase social mobility. With reskilling, for example, the average worker in the US economy would have 48 viable job transitions – nearly as much as the 2% with the most options today. Among those transitions, 24 jobs would lead to higher wages.
The case for a reskilling revolution
The research, which is published in collaboration with The Boston Consulting Group, finds that coordinated reskilling that aims to maintain or grow wages has very high returns for workers at risk of displacement – and for businesses and the economy. At-risk workers who retrain for an average of two years could receive an average annual salary increase of $15,000 – and business would be able to find talent for jobs that may otherwise remain unfilled. With this approach, up to 95% of at-risk workers would find new work in new, higher-income jobs. Without such coordinated upskilling efforts, the report finds, one in four of at-risk workers would lose on average $8,600 of their annual income even if they are successful in moving to a new job.
However, this reskilling revolution requires that 70% of affected workers retrain in a new job “family” or career, highlighting the need for retraining initiatives that combine reskilling programmes with income support and job-matching schemes to fully support those undergoing this transition.
“The only limiting factor on a world of opportunities for people is the willingness of leaders to make investments in re-skilling that will bridge workers onto new jobs. This report shows that this investment has very high returns for businesses as well as economies – and ensures that workers find a purpose in their lives,” Klaus Schwab, Founder and Executive Chairman, World Economic Forum.
A future of jobs for all
The report also describes what reskilling would need to look like. The people who will do best in the transitions underway are those who have “hybrid” skills – transferable skills like collaboration and critical thinking, as well as deeper expertise in specific areas. Both highly specialized and highly generalist roles will need significant reskilling.
The report lays out 15 job pathways to demonstrate the precise range of options that reskilling can present for professions as diverse as assembly-line workers, secretaries, cashiers, customer service representatives, truck drivers, radio and TV announcers, fast-food chefs, mining machine operators and computer programmers.
However, for these viable and desirable job transitions to come to fruition requires concerted efforts by businesses, policy-makers and various stakeholders to think differently about workforce planning and to invest in reskilling that will bridge workers to new jobs.
“Work provides people with meaning, identity and opportunity. We need to break out of the current paralysis and recognize that skills are the ‘great redistributor’. Equipping people with the skills they need to make job transitions is the fuel needed for growth – and to secure stable livelihoods for people in the midst of technological change,” said Saadia Zahidi, Head of Education, Gender and Work System Initiative and Member of the Executive Committee, World Economic Forum.
A gendered impact
Of the 1.4 million jobs expected by the US Bureau of Labor Statistics to be disrupted between now and 2026, the majority – 57% – belong to women. This is a worrying development at a time when the workplace gender gap is already widening and when women are under-represented in the areas of the labour market expected to grow most robustly in the coming years. The data show that the current narrative about the most at-risk category is misleading from a gender perspective. For example, there are nearly 164,000 at-risk female secretaries and administrative assistants, while there are just over 90,000 at-risk male assembly-line workers.
Without reskilling, on average, at-risk women have only 12 job transition options, while at-risk men have 22 options. With reskilling, women have 49 options, while men have 80 options. With reskilling, the options gap between women and men narrows. However, these transitions also present an opportunity to close the persistent gender wage gap. Combined reskilling and job transitions would lead to increased wages for 74% of all currently at-risk women, while the equivalent figure for men is 53%.
The many futures of work
Towards a Reskilling Revolution: A Future of Jobs for All is complemented by a second World Economic Forum report launched today: Eight Futures of Work: Scenarios and Their Implications, also produced in collaboration with The Boston Consulting Group. It presents eight visions of the future of work in the year 2030.
“The future of work is not predetermined. All of the scenarios we present are possible, but none is certain. It is in our hands to proactively manage the changes underway and build the kind of future that maximizes opportunities for people to fulfil their potential across their entire lifetimes,” says Rich Lesser, Global Chief Executive Officer and President, The Boston Consulting Group.
The scenarios make the case that, while stakeholders cannot definitively choose to bring about any scenario that they might prefer on their own, they can manage the changes underway and influence the future through collaboration. Eight Futures of Work identifies reskilling the current workforce as one of the most critical actions that can be taken to proactively shape a new, positive future of work. Together, both studies aim to provide actionable tools that will help individuals, employers and policy-makers take action to influence a more inclusive and positive future of work.
The World Economic Forum project on Closing the Skills Gap provides a platform for public- and private-sector leaders to work together on reskilling and education reform, and will use both studies to tailor solutions for workers. At the Annual Meeting 2018 in Davos, the project will announce a new target for collaboration to reach workers with appropriate reskilling and retraining.
The Towards A Reskilling Revolution: A Future of Jobs for All report introduces a new methodology built on innovative new data from 50 million online job postings, encompassing 15,000 unique skills, collected over a two-year period by Burning Glass Technologies, the data partner for the report. Combined with labour market statistics from the US Bureau of Labor Statistics, the data used in the study covers 958 unique types of jobs.
The methodology combines the various aspects of a job, including work activities, skills, knowledge, abilities, years of experience and education, into an index of job-fit to measure the similarity between jobs in the set. While the methodology uses the United States labour market as an example, it can be applied to a variety of job requirements and sources of data to map out job-transition opportunities in diverse labour markets, and will be expanded in the future.
The Eight Futures of Work: Scenarios and Their Implications report creates eight potential worlds based on how different combinations of three key variables may come together – the rate of technological change and its impact on business models; the evolution of learning among the current and future workforce; and the magnitude of talent mobility across geographies.
Immigrant integration policies have improved but challenges remain
Many countries have made important improvements in integrating immigrants and their children into the labour market and day-to-day life of their country. However, many challenges remain and much of the potential that migrants bring with them remains unused, hampering both economic growth and social inclusion, according to a new joint OECD-EU report.
Settling In 2018: Indicators of Immigrant Integration finds that the proportion of highly educated immigrants has grown in virtually all OECD and EU countries, rising by 7 percentage points over the past decade in both areas. At the same time, in all countries, most immigrants express a strong sense of belonging to their host-country, with more than 80% reporting feeling close or very close to this country.
“Countries have made important improvements in their policies to foster the integration of immigrants and their children into education, the labour market and the social life of their country,” said OECD Secretary-General Angel Gurría. “Nevertheless, much remains to be done to maximise the still untapped potential of migrants to contribute economically and socially to their recipient countries.”
“Making immigrant integration work is absolutely vital for our economies and societies as a whole,” said European Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos. “We need to make sure that all those who have a right to stay and live in our societies, become full and equal participants. Not only on paper but also in reality.”
Despite some improvements, immigrants have often not managed to translate higher overall education levels into better labour market outcomes. Immigrants’ relative poverty is also today more widespread than a decade ago, further widening the gaps with the native-born. Around 14% of all foreign-born people in the EU report facing discrimination on the grounds of ethnicity, nationality or race. The report also notes that almost a third of non-EU migrants in Europe state that most inhabitants of their neighbourhoods share their ethnic background.
Educational attainment levels and outcomes of youth with immigrant parents have also increased in most countries over the past decade – both in absolute terms and relative to their peers with native-born parents. This is evident in better educational outcomes and higher resilience at age 15, in lower levels of school dropout rates and higher educational attainment. However, immigrant children continue to lag behind their peers with native-born parents, notably in Europe, while the reverse is the case in only a few non-EU OECD countries such as Canada.
While immigrant men have a 3 percentage points higher employment rate than native-born men across the OECD, immigrant women have a 1 percentage point lower rate than their native-born peers, amounting to a full 6 point gap in Europe. Gaps between immigrant and native-born women are especially wide in Belgium and France, at 14 percentage points, and in the Netherlands, at almost 17 points. When employed, immigrant women are also more often in part-time and low-skilled jobs – notably in Southern Europe (except Portugal), as well as in Chile, Korea and Slovenia, where over 30% of employed immigrant women are in low-skilled jobs.
Following an overall increase in their share over the past decade, women now account for the majority of immigrants living in OECD and EU countries. The report also finds that the widespread inactivity and part-time employment of immigrant women is often involuntary, more often than for their native-born peers.
Settling In 2018: Indicators of Immigrant Integration presents a detailed international comparison of the outcomes of immigrants and their children and their evolution over time, for all European Union and OECD countries as well as selected G20 countries. 74 indicators cover key dimensions of integration, including employment, education, housing, health, civic engagement and social inclusion. There is a special focus on young people with immigrant parents and on gender issues.
World Sees Huge Uptake in Sustainable Energy Policies in Past Decade
The number of countries with strong policy frameworks for sustainable energy more than tripled – from 17 to 59 – between 2010 and 2017, and many of the world’s largest energy-consuming countries have significantly improved their renewable energy regulations since 2010, according to RISE 2018, a new World Bank report charting global progress on sustainable energy policies.
Progress was even more marked in energy efficiency, with the percentage of countries establishing advanced policy frameworks growing more than ten-fold between 2010 and 2017. And among countries with large populations living without electricity, 75 percent had by 2017 put in place the policies and regulations needed to expand energy access.
But as the report makes clear, there are significant barriers to global progress on sustainable energy. While countries continue to be focused on clean energy policies for electricity, policies to decarbonize heating and transportation – which account for 80 percent of global energy use – continue to be overlooked.
RISE 2018 measures policy progress in 133 countries on renewable energy, energy efficiency, electricity access, and access to clean cooking – the four target areas of Sustainable Development Goal 7 (SDG7), which calls for achieving access to affordable, reliable, sustainable and modern energy for all by 2030.
“Policy matters. RISE 2018 confirms the numbers that make it clear that policy is a leading indicator of the world’s sustainable energy transition,” said Riccardo Puliti, Senior Director for Energy and Extractives at the World Bank. “But the report also contains a warning: that without accelerated adoption of good policies, and strong enforcement, the world’s climate goals and SDG7 are at risk.”
This momentum was particularly marked in renewable energy. Among the countries covered by RISE, only 37 percent had a national renewable energy target in 2010. By 2017, that had grown to 93 percent. By 2017, 84 percent of countries had a legal framework in place to support renewable energy deployment, while 95 percent allowed the private sector to own and operate renewable energy projects. Over the same period, the share of countries that had put in place national legislation on energy efficiency rose from 25 percent to 89 percent.
In countries with an electricity access deficit, policymakers are increasingly turning their attention to off-grid solutions to close the gap. The share of low-access countries adopting measures to support mini-grids and solar home systems has soared from around 15 percent in 2010 to 70 percent in 2017.
In the same countries, however, the deteriorating fiscal position of national utilities is putting progress at risk. Among countries with low access to energy, the number of utilities meeting basic creditworthiness criteria dropped from 63 percent in 2012 to 37 percent in 2016.
Among the four SDG7 target areas, clean cooking continues to be the most overlooked and underfunded by policymakers. While the report finds some evolution in policy frameworks since 2010, there has been little progress on standard-setting for cookstoves or on consumer and producer incentives to stimulate adoption of clean technologies.
“There is a great opportunity now for countries to learn from each other to accelerate the uptake of good policies,” said Puliti. “For example, what has Kenya done to expand access to electricity so rapidly? How did India structure its renewable energy auctions to deliver record-setting low prices for solar? At the same time, we need urgent action to address critical gaps, such as failing utilities, clean cooking, and the slow progress on decarbonizing heating and transport.”
RISE 2018: “Policy Matters” is the second edition of RISE – Regulatory Indicators for Sustainable Energy. The report is published by the World Bank with funding from the Energy Sector Management Assistance Program (ESMAP).
Report: Pakistan’s trade with South Asia can rise by eight-fold
Regional trade can create many more jobs and make the country prosperous if trade barriers with South Asia are removed, says a new World Bank report. Pakistan’s trade with South Asia accounts for only 8 percent of its global trade, despite the region being the world’s fastest growing. However, intraregional trade in South Asia is among the lowest at about 5 percent of total trade, compared with 50 percent in East Asia and the Pacific.
The recently-launched Glass Half Full: The Promise of Regional Trade in South Asia report documents what needs to be done to realize the full trading potential in South Asia. It was launched at the 11th South Asia Economic Summit, hosted by the Sustainable Development Policy Institute in Islamabad. It identifies four critical barriers to regional trade: tariffs and para tariffs, real and perceived nontariff barriers, connectivity costs, and a broader trust deficit.
“Pakistan is sitting on huge trade potential that remains largely untapped,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “A favorable trading regime that reduces the high costs and removes barriers could boost investment opportunities that is critically required for accelerating growth in the country.”
The report argues that the costs of trade are much higher within South Asia compared to other regions. The average tariff in South Asia is more than double the world average. South Asian countries have greater trade barriers for imports from within the region than from the rest of the world. These countries impose high para tariffs, which are extra fees or taxes on top of tariffs. More than one-third of the intraregional trade falls under sensitive lists, which are goods that are not offered concessional tariffs under the South Asian Free Trade Area (SAFTA). In Pakistan, nearly 20 percent of its imports from, and 39 percent of its exports to, South Asia fall under sensitive lists.
“Pakistan’s frequent use of tariffs to curb imports or protect local firms increase the prices of hundreds of consumer goods, such as eggs, paper and bicycles. They also raise the cost of production for firms, making it difficult for them to integrate in regional and global value chains,” said Caroline Freund, Director, Macroeconomics, Trade and Investment, World Bank.
South Asian countries are yet to reap the benefits of shared land borders, the report adds. While Pakistan and India collectively represent 88 percent of South Asia’s Gross Domestic Product, trade between the two countries is only valued at a little over $2 billion. This could be as high as $37 billion. “For example, it is cheaper for Pakistan to trade with Brazil than with India. Reducing policy barriers, such as eliminating the restrictions on trade at the Wagah-Attari border, or aiming for seamless, electronic data interchange at border crossings, will be major steps towards reducing the very high costs of trade between Pakistan and India,” said Sanjay Kathuria, World Bank Lead Economist and lead author of the report.
The report recommends ending sensitive lists and para tariffs to enable real progress on SAFTA and calls for a multi-pronged effort to address non-tariff barriers, focusing on information flows, procedures, and infrastructure. Policy makers may draw lessons from the India-Sri Lanka air services liberalization experience, the report suggests, where liberalization was gradual and incremental, but policy persistence paid off. Connectivity is a key enabler for robust regional cooperation in South Asia.
“By reducing man-made trade barriers, trade within South Asia can grow roughly three times, from $23 billion to $67 billion,” Kathuria added.
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