Governments must urgently step up their efforts to improve their education and training policies to help more people reap the benefits of the digital transformation and to reduce the risk of automation widening inequalities and driving unemployment, according to a new OECD report.
The OECD Skills Outlook 2019, which is part of the Organisation’s “I am the Future of Work” campaign, shows that as job markets evolve in response to technological change, some countries are better prepared than others as a result of the skill levels of their populations.
A new scoreboard in the Outlook finds that only a few countries, including Belgium, Denmark, Finland, the Netherlands, Norway and Sweden, are ahead in terms of the skills and effective lifelong learning systems needed to thrive in the digital world.
However, many other countries are lagging behind. Japan and Korea, for example, have the potential to perform well but must make greater efforts to ensure older workers and adults are not left behind. People in Chile, Greece, Italy, Lithuania, the Slovak Republic and Turkey often lack the skills needed to flourish in the digital world and current training systems are not developed enough to enable them to upskill.
“In our rapidly digitalising world, skills make the difference between staying ahead of the wave and falling behind,” said OECD Secretary-General Angel Gurría, launching the report in Paris. “To help people, governments will need to find the right balance between policies fostering flexibility, labour mobility and job stability. Businesses have also a key role to play in ensuring that employees upskill and reskill, adapting to the changing demands of the labour market. By improving our skills systems, we can ensure that today’s technological revolution will improve lives for all”.
Traditional education systems need to evolve into lifelong learning systems, says the OECD. Adults will need to reskill and upskill throughout their careers to keep up with changes in the labour market. Yet, participation in training by low-skilled adults – those most likely to be affected by the changes ahead – is 40 percentage points below that of high-skilled adults on average across the OECD. Countries should create flexible and shorter types of learning opportunities, and technology can help through the development of online resources.
The Outlook says it is also key to improve the labour market relevance of adult learning and design new ways to recognise the level of skills of people who will follow complex learning pathways. It is vital to overcome the lack of motivation, which seems to prevent many low-skilled adults from engaging in training opportunities.
The Outlook estimates the level of training required for workers to change occupation and calculates how much training effort is required to facilitate these transitions. The findings show that more than half of occupations (54%) at high risk of automation will need either a moderate (less than one year) or severe (more than one year) training effort for workers to transition to better-quality and safer jobs.
The magnitude of the challenge is substantial since lifelong learning systems need to provide training for adults throughout their careers, so that they can move to other jobs as automation progresses or avoid being displaced from jobs that will be profoundly transformed. Governments need to put the right incentives and mechanisms in place to engage employers, social partners and other stakeholders to share the costs.
Countries can foster lifelong learning by addressing inequalities in learning opportunities throughout life, adapting the school curriculum to changing skills requirements and providing more effective training to teachers. Technology can play a large role in making education and training systems more efficient, flexible and adaptable to individual needs. To achieve this goal, it is important that teachers receive the support they need to use technology in order to improve student outcomes.
Technology can also help lagging regions catch up, by connecting people with teachers and learning opportunities that may not be available locally.
Accelerating Mongolia’s Development Requires a Shift “from Mines to Minds”
A new report by the World Bank estimates that out of every dollar in mineral revenues Mongolia has generated over the past 20 years, only one cent has been saved for future generations. The report argues that to break this cycle, Mongolia should use its mineral wealth to invest in people and institutions, while gradually reducing its dependence on the sector.
This is particularly true as demand for key minerals is likely to tumble due to climate change concerns, a shift of investors’ preference toward sustainability, China’s ambitious goal to reduce coal consumption, and persistence of the COVID-19 shock, according to Mongolia’s Mines and Minds, the World Bank’s September 2020 Country Economic Memorandum for Mongolia.
Since the advent of large-scale mining in 2004, Mongolia’s economy has grown at an average rate of 7.2 percent per year, making it one of the fastest-growing economies in the world. Growth has translated to rapid decline – although at times partly reversed – in the incidence of poverty and improved quality of life. The report also notes that Mongolia enjoys relatively strong human capital, and its infrastructure capital has improved for the last few decades, though remains scarce given the size of the country and low population density. This performance has been made partly possible through a generous but inefficient social assistance system and a large public investment program supported by mineral revenues and external borrowing.
However, a number of enduring challenges have grown in the shadow of this success. Mongolia’s rapid growth has been obscured by its extreme macroeconomic volatility and frequent boom and bust cycles. Growth has almost entirely come through capital accumulation and the intensive use of natural capital rather than through sustained productivity growth. Meanwhile, the country has not only consumed almost all its mineral outputs, but has also borrowed heavily against them, bequeathing negative wealth to the next generation.
“Instead of maximizing the benefits of its mineral wealth for diversified and inclusive growth, Mongolia has increasingly become more addicted to it. At the same time, human capital has been underutilized and institutional capital has eroded.” said Andrei Mikhnev, World Bank Country Manager for Mongolia. “Such inability to capitalize on the country’s endowments has resulted in limited diversification of outputs and exports and has further amplified its vulnerability to the swings of the global commodity markets. Breaking this gridlock calls for a fundamental shift in approach that puts investing in minds on an equal footing with mines.”
The report recommends key policy actions to build the foundation of a diversified and sustainably growing economy. These include:
- Implement countercyclical fiscal and monetary policies – supported through transparent fiscal rules, an independent fiscal council, a market-driven exchange rate, and a well-functioning stabilization fund – to smooth consumption over the business cycle rather than maximize current consumption.
- Undertake bold investment climate reforms to enhance competition, secure investor rights, and create a more level playing field that enables productive firms to invest and grow.
- Move away from the mindset of diversifying products to expanding endowments, especially in terms of better utilization of Mongolia’s young and educated, especially female, labor force.
- Accelerate the implementation of fundamental governance reforms (especially on the government effectiveness and control of corruption) to reduce political interference, increase transparency, and improve regulatory quality throughout the economy.
“Fortunately, there are many encouraging signs of improved macroeconomic management in 2017-19, providing the new government an opportunity to advance its reform efforts,” said Jean-Pascal Nganou, World Bank Senior Country Economist and lead author of the report. “Some impressive fiscal outcomes were achieved not by introducing new reforms but by effectively implementing existing ones. They demonstrate that with the right political will and leadership, similar improvements are possible in other areas including monetary and exchange rate policy, the financial sector, the business environment, and the labor market. The new administration has, therefore, an opportunity to institutionalize these reforms and avoid policy regression in the future.”
Nearly 9 in 10 People Globally Want a More Sustainable and Equitable World Post COVID-19
In a new World Economic Forum-Ipsos survey of more than 21,000 adults from 28 countries nearly nine in ten say they are ready for their life and the world to change.
72% would like their own lives to change significantly and 86% want the world to become more sustainable and equitable, rather than going back to how it was before the COVID-19 crisis started. In all countries, those who share this view outnumber those who don’t by a very significant margin (more than 50 percentage points in every country except South Korea). Preference for the world to change in a more sustainable and equitable manner is most prevalent across the Latin America and Middle East-Africa regions as well as in Russia and Malaysia.
Next week’s World Economic Forum Sustainable Development Impact Summit will address the achievement of the sustainable development goals and the appetite for transformation which will drive the “decade of delivery”.
Clear majority ready for a more sustainable and equitable world
Globally, 86% of all adults surveyed agree that, “I want the world to change significantly and become more sustainable and equitable rather than returning to how it was before the COVID-19”. Of those, 46% strongly agree and 41% somewhat agree, while 14% disagree (10% somewhat and 4% strongly).
Russia and Colombia top the list of countries that strongly or somewhat agree with that statement at 94%. They are followed by Peru (93%) Mexico (93%) Chile (93%) Malaysia (92%), South Africa (91%) Argentina (90%) and Saudi Arabia (89%). The countries that are most change averse – disagreeing somewhat or strongly disagreeing with the statement – are South Korea (27%), Germany (22%), Netherlands (21%), US (21%) and Japan (18%).
Dominic Waughray, Managing Director, at the World Economic Forum said, “The Great Reset is the task of overhauling our global systems to become more equitable and sustainable, and it is more urgent than ever as COVID-19 has exposed the world’s critical vulnerabilities. But the technology to transform things tends to outpace the human will to change. In six months, the pandemic has systematically broken down this cultural barrier and we are now at a pivot point where we can use the social momentum of this crisis to avert the next one.”
Ready for significant personal change
Across all 28 countries, 72% want their lives to change significantly rather than returning to what it was like before the COVID-19 crisis (30% strongly and 41% somewhat) while the other 29% disagree (21% strongly and 8% somewhat).
Latin America stands out for its optimism, with Mexico, Colombia and Peru in the top five countries strongly or somewhat agreeing. Agreement is also high South Africa (86%), Saudi Arabia (86%, Malaysia (86%) and India (85%). By contrast, at least two out of five adults in the Netherlands, Germany, South Korea, Japan, Sweden, the US, UK and Canada long for their life to just return to how it was before the pandemic.
MethodologyThese are the results of a 28-country survey conducted by Ipsos on its Global Advisor online platform. Ipsos interviewed a total of 21,104 adults aged 18-74 in United States, Canada, Malaysia, South Africa, and Turkey, and 16-74 in 23 other countries between August 21 and September 4, 2020. Where results do not sum to 100 or the ‘difference’ appears to be +/-1 more/less than the actual, this may be due to rounding, multiple responses or the exclusion of don’t knows or not stated responses.
Global development efforts should increase focus on fragile states in light of COVID-19 crisis
The COVID-19 pandemic is aggravating inequality, poverty and insecurity in vulnerable, or fragile, countries and territories, making it more important than ever to focus development efforts on such places, according to a new OECD report.
States of Fragility 2020 finds that progress on several UN Sustainable Development Goals (SDGs) – including the crucial Goal 16 relating to peace, justice and strong institutions – has stagnated or declined in fragile locations in recent years. The coronavirus crisis is hurting incomes and stability in already poor and vulnerable countries, as well as health and education – two key building blocks of sustainable development in fragile states.
“COVID-19 is a global systemic shock that is exacerbating fragility and risks, holding back progress on the Sustainable Development Goals,” said OECD Secretary-General Angel Gurría. “As we continue to fight the worst health, economic and social crisis in nearly a century, we must put people at the centre of our development co-operation efforts on addressing fragility.”
Defining fragility as the combination of exposure to risk in five areas – economic, environmental, political, social and security – and the insufficient capacity of the state or system to manage, absorb or mitigate those risks, the OECD estimates that 23% of the world’s population, and 77% of those classified before COVID-19 as extremely poor, live in “fragile” contexts. The report finds only small improvements in fragility in the 57 countries and territories it examines.
COVID-19 is adding to economic, health and societal vulnerabilities, exacerbating existing pressures driving fragility, conflict and violence, the report says. In places where violence is prevailing or increasing, mitigating the impact of COVID-19 will require greater peacebuilding efforts. Initial pandemic response measures taken by governments in some fragile locations risk compounding poverty, inequality, social fragmentation and political repression, thus adding to the root causes of conflict and fragility.
The report notes that Official Development Assistance (ODA) has become an important source of support to help fragile states onto sustainable and self-reliant pathways. It calls for it to be protected and renewed to meet the challenges of the post-COVID-19 world, particularly as measures imposed to limit the spread of the virus are affecting the ability of civil society, multilateral and humanitarian organisations to operate in fragile locations.
From 2010 to 2018, members of the OECD’s Development Assistance Committee (DAC) increased their bilateral assistance to priority sectors in fragile places, both in volume and as a proportion of total ODA. Humanitarian ODA also rose by 44% in the same period. Yet ODA for peace remains low compared to humanitarian and development finance. DAC members spent 25% of their ODA to fragile contexts on humanitarian assistance in 2018 but only 4% and 13% respectively on prevention and peacebuilding.
The report says there is a need to focus more financing on targeting the underlying drivers of fragility. Addressing fragility also requires an approach based on local needs, priorities and resilience.
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