Globally, nearly 35% of our human capital potential remains undeveloped, due to lack of learning or employment opportunities or both. The Human Capital Index reveals specific gaps in each country and points to the future outlook for major economies. It finds that many of today’s education systems are disconnected from the skills needed to function in today’s labour markets. While current education systems seek to develop cognitive skills, non-cognitive skills that relate to an individual’s capacity to collaborate, innovate, self-direct and problem-solve are increasingly important. Current education systems are also front-loaded in a way that is not be suited to current or future labour markets. In many countries, education investments have not resulted in labour market returns for individuals and their families, due to unemployment, underemployment or large demographic segments remaining economically inactive. In others, regardless of education levels, work may be precarious, may insufficiently tap into existing knowledge or may not invest in the lifelong learning and retraining that must take place simultaneously throughout the work life cycle.
Technological change may be further exacerbating some of these challenges, but it is also providing a unique new opportunity to address and transform these concerns, both in learning and employment. These developments imply that we need to rethink how the world’s human capital endowment is invested in and leveraged for social and economic prosperity and the well-being of all. Governments, business leaders, educational institutions and individuals must each understand the magnitude of the change underway and fundamentally rethink the global talent value chain. In order to be proactive in our response to the future needs of economies, societies and individuals, we must re-think what it means to learn, what it means to work and what is the role of various stakeholders in ensuring that people are able to fulfil their potential.
The potential for technology to transform educational access and quality has been well documented. In addition, in a world where 13% of the working age population are own-account workers, 4% are unemployed, a further 7% are underemployed and 20% are inactive (in addition to 3 out of 4 increasingly healthy, and in many cases highly skilled, over 65 year-olds)—in all, some 44% of the world’s working age population, or 2 billion people—new technologies may also present an enormous opportunity to unlock and nurture the human capital potential of a sizeable share of the population around the globe. A wide range of research has shown the existing and potential benefits in the form of flexibility, accessibility, transparency and scale provided by new formats of employment. For workers, technology is lowering the access threshold to employment and multiplying opportunities to form new client-provider relationships and find new work. For employers, digital labour markets are expanding access to fresh talent. Yet well-founded concerns also remain about the fragmentation of work and its effects on income equality, income security and social stability, amongst other areas of concern.
Much of the focus of recent policymaking in labour markets has been on the challenges of managing new formats of work. Updated social safety nets and modern forms of unionization—such as digital freelancers’ unions38—are also beginning to emerge in some countries to complement new models of work. It will be important for legislators to develop agile, thoughtful and forward-thinking governance to manage and regulate the rapidly emerging digital labour market as well as the disruptions to traditional forms of work, for optimal socio-economic results. It is also imperative that, in parallel, policymakers work with other stakeholders to deliver on the promise of technology for education and lifelong learning.
Businesses—whether traditional or new—will need to be a part of designing a new social contract, including re-thinking their role as a consumer of ‘ready-made’ human capital. Companies will need to rethink jobs as bundles of skills and invest in the lifelong learning, re-skilling and up-skilling of their present employees in addition to working closely with education systems to support the development of both general and specialized employability skills. In addition, while business cycles can naturally lead to peaks and troughs in employment, any socially responsible business in today’s deeply interconnected and transparent world must consider how it can contribute to mitigating unemployment and enhancing people’s abilities to earn a livelihood.
While much has been written about the various positive and negative employment scenarios that may emerge from the current wave of technological change, these forecasts are highly dependent on the actions we take today to leverage opportunities and mitigate risks. The private sector and public sector, along with other stakeholders, will need to work together to lead adaptation to the new world of learning and work. The World Economic Forum’s platform aims to provide this space, complementing the analysis in this Report and other insight tools, with a space for dialogue and action that is critical to our collective future.