Closing The Skills Gap Through Innovation
“The jobs are there, but the skills are not” is the most familiar refrain you will hear from senior executives today. I have recently seen a Twitter survey on #StartingUp that asked whether employers believe that young people are getting the skills they need to get ahead, and over 60% of respondents said “No.” The vast majority of employers expect that by the early 2020s, as high as 42% of the required workforce skills will undergo a dramatic shift, and billions of people displaced by automation will need re-skilling. In Europe, about 170 million people (44% of the working age population) don’t have even basic digital skills. The UAE alone is predicted to experience a US$50 billion skills gap by 2030. University graduates here lack STEM and language skills, as well as problem solving, critical thinking, and collaboration skills demanded by employers.
Meanwhile, employers worldwide are struggling to fill job vacancies, and it will only get worse. LinkedIn estimates that by 2030, the financial and business services sector alone will be almost 11 million workers short, and there will be more than four million jobs unfilled in the technology, media, and telecommunications sector. While many individuals worry that globalization, artificial intelligence, and robots will decimate their jobs, CEOs desperately need talent, and nearly 80% of them, according to a PwC survey, report that skills gaps are limiting corporate growth. Skill gaps do not only put a break on growth, but also threaten economic opportunities and may result in staggering costs. As an example, by the early 2020s, a massive 3.5 million shortage of cybersecurity experts could raise the cost of damage to as high as $6 trillion per annum, according to Cybersecurity Ventures. Future Agenda, a think tank, suggests that even for traditional jobs, such as those of scientists, engineers, and nurses, the skills requirements are changing fast, and the digital economy is particularly hungry for skilled workers.
What is worrying, however, is that despite these job vacancies, 30-45% of the global population is underutilized– unemployed, inactive, or part-time. What is even more unsettling is that almost 300 million of people in the 16-24 age group are not involved in education, employment, or training. According to McKinsey, we are facing high technological unemployment in a skills-scarce digital age. The causes behind the skills gap are complex. It is brought about by a convergence of economy-wide technological disruption, digitization of business, the changing dynamic between workers and machines, a lack of a clear path from education to employment, and an under investment of corporates in upskilling or reskilling their employees.
Given the magnitude of the problem, what is being done to close the skills gap? Many corporates have revamped their HR policies and training. IBM has recently embraced the era of “new collar” worker, putting skills above degrees. Its global workforce of 380,000 employees have access to Watson Career Coach, and a wide range of learning and development programs. Amazon plans to spend some $700 million on reskilling to third of its workforce in the next six years. PwC Australia is now offering a new apprenticeship program in business and technology for students straight after high school. Universities are also addressing the skills gap to ensure a smoother path from education to employment.
As an example, a 2018 study by Coinbase shows that over 40% of the world’s top 50 universities have introduced at least one class on cryptocurrencies and blockchain (technologies underpinning the recent fintech revolution), both highly demanded by industry. MENA universities are diversifying their computer science degree offerings to fill in the IT skills gap. American University in Dubai, one of the regional leaders in graduate employability, is developing a master’s degree in AI consistent with the UAE’s national strategy for artificial intelligence.
Governments are also introducing supportive policy changes. One of the most robust initiatives is SkillsFuture, launched in 2015 in Singapore. The program provides all citizens with access to training, including through workshops, work-study programs, and online courses. It has become a model for public-private investment and cemented the role of Singapore as an innovation hub.
The most exciting developments, however, are happening in the startup space, where edtech ventures are disrupting traditional college to offer in demand skills in high-growth sectors of the digital economy. Lambda School (which received $30 million from investors including Google Ventures and Y Combinator), an online coding school, is an income share agreement (ISA): students pay nothing while attending the school, and then pay a portion of their earnings once they are employed. Currently at 2,700 students and growing at 10% a month, Lambda is planning to transfer the ISA model to other indemand jobs such as nursing. Udacity, an online platform, is specifically focused on indemand technical skills (e.g., programming, artificial intelligence, cloud computing and data science) which are offered in the form of Nanodegrees developed in collaboration with and recognized by leading tech companies like Google, AT&T, IBM, nVidia and Amazon Web Services (AWS).
Beyond the ISA model, bootcamps are rising in popularity, globally and in the MENA. In the early days, bootcamps were typically focused on coding and computer science, now they are expanding into areas beyond tech– sales, data science, digital marketing, and machine learning. These are intense programs usually developed in conjunction with industry and taught by professionals, where students work on real projects (or in a simulated environment), and graduate with a portfolio of work as evidence of their skills. Many bootcamps, at least in the US, boast placement rates north of 80%. A host of innovative startups do not directly provide skills training, but instead focus on skills assessment, certification, and credentialing. Employers, following the likes of Google and IBM, have started to use microcredentials or e-portfolios to assess employees’ competencies. Credly, a venture capital backed startup, verifies evidence of skills and achievements through digital badges. Portfolium, another venture-funded US company, enables students and recent graduates to showcase their projects, skills and credentials. Closer to home, AssessHub uses advanced analytics to assess employees’ skills so as to help employers to hire, train and promote talent. These innovations give me confidence that students and employees remain fit for the job market of the future.
This article was originally published on Entrepreneur Middle East and has been reposted on Dubai Startup Hub based on a mutual agreement between the websites. Opinions expressed by Entrepreneur contributors are their own.