Across the globe, the individuals whose human capital potential is most commonly under-deployed across the labour market are those at either end of the working-age spectrum: young workers and older workers at the higher end of the working age population, hinting at a slow transition into the labour market for young people and poor mechanisms for utilizing the skills and human capital potential of older workers. Details of the scale of these gaps across countries are visualized in Figure 11. These gaps speak to structural challenges blocking entry and retention, poor incentives for workers from younger and older generations to participate in the labour market, and inefficient skilling and re-skilling systems.

Figure 11: Deployment subindex score, by age group

In addition, low deployment of human capital across the formal labour market is often characterized by rigid gender roles, insufficient opportunities, low fit of opportunities and the changing nature of work globally. For example, worsening global unemployment figures have been underscored by the swell of the working-age population in emerging economies, and a slow-down in the growth of employment opportunities.¹⁴ Such trends may exacerbate over time as the dynamics of a global, technology-enhanced, inter-connected labour market allow firms to manage the skills and costs of their talent pool through both traditional global value chain infrastructures as well as through the emerging digital or ‘gig’ economy. This presents both new opportunities and new concerns about income inequality and the polarization of employment opportunities within and between countries.

As seen in Figure 12, countries can be analyzed by classifying them in one of four categories. One set of countries have significantly expanded their human capital by developing their talent capacity and their people are able to find productive employment; another set are yet to develop greater talent capacity but are deploying a significant share of their workforce across the economy; a third set have made significant capacity investments but are not leveraging this talent through deployment in the workforce; finally, a number of countries exhibit low capacity and deployment of their human capital. For example, in the second category, many Sub-Saharan African countries have limited capacity but high deployment, driving economic value, on the one hand, through the sheer quantity of labour deployed in the economy and, and on the other hand, through skills gained in informal on-the-job learning.

Figure 12: Relationship between Capacity subindex and Deployment subindex

These different human capital potential profiles present distinctive opportunities for intervention. Among those with high capacity and low deployment, more focus is needed on understanding the structural issues that hold back greater utilization of high-skilled talent pools across the economy. One such factor is commonly gender, another the fit between employment available and workers’ specialized skills. For countries with low capacity and low deployment, one promising approach to realizing greater human capital potential consists in reviewing the minimum re- and upskilling needed to enable the deployment of talent across the economy, and expanding the availability of work opportunities. For those with low capacity and high deployment, it can prove fruitful to expand both the availability of re- and upskilling opportunities and, if appropriate, the availability of high-skilled labour.