Upskilling of workforce may add $6.5tn to global GDP by 2030, WEF says

Additional investment to improve workforce skills could boost global gross domestic product by at least $6.5 trillion and create 5.3 million new jobs by 2030, according to the World Economic Forum. This will help in developing more inclusive and sustainable economies as the world looks to recover from the coronavirus-induced slowdown, the WEF's Upskilling for Shared Prosperity report said. Equipping workers with the necessary skills for Fourth Industrial Revolution jobs is expected to increase global productivity by 3 per cent during the period. The net number of new jobs created will be those that are complemented – rather than replaced – by technology, according to the report, which was co-written by PwC and released on Monday. “Millions of jobs have been lost through the pandemic, while accelerating automation and digitisation mean that many are unlikely to return,” said Saadia Zahidi, managing director of the WEF. “We need new investments in the jobs of tomorrow – the skills people need for moving into these new roles and education systems that prepare young people for the new economy and society.” The report considered two scenarios based on the steps countries take to reduce skills gaps, in line with guidelines devised by the Organisation for Economic Co-operation and Development. An accelerated scenario assumes a $6.5tn boost to global GDP if skills gaps are closed by 2028. The core scenario assumes the skills gaps will be closed by 2030, which would add $5tn to global GDP. Upskilling could also help less developed economies and countries with larger skill gaps achieve greater gains as a percentage of GDP. China, the US, India, Spain and South Africa are expected to benefit the most. “It is likely that China might achieve the more accelerated scenario. In 2019, it committed to spending $14.8 billion to train 50 million people by 2022,” the report said. Sub-Saharan Africa and Latin America may benefit from a GDP boost of more than 7 per cent by 2030 “if they start investing in upskilling now”. “Both regions are characterised by a high proportion of youth, high inequality and underdeveloped business and consumer sectors. Upskilling’s potential to transform lives and livelihoods in these regions is compelling.” Covid-19 has tipped the world economy into its worst recession since the 1930s. Governments and central banks have poured more than $12tn in fiscal and monetary stimulus packages to stabilise financial markets, support economies and protect jobs. Global output is now set to expand by 5.2 per cent this year after contracting by 4.4 per cent last year, according to the International Monetary Fund. However, millions of jobs lost amid Covid-19 movement restrictions and lockdowns are unlikely to return. Businesses are also increasingly looking to invest in automation and digitisation as they prepare for growth amid the transformation of the industrial sector. Machine learning, artificial intelligence and the Internet of Things are expected to eliminate the need for human intervention in many roles. Three out of five adults across the world flagged job security and income loss among the top risks for this year, according to a joint WEF and Ipsos study that was released last week. Other major concerns, according to the survey of 23,004 adults from 28 countries, were deteriorating health and more frequent, weather-related natural disasters. The WEF report is part of its Reskilling Revolution initiative that aims to provide better education, skills and work to one billion people by 2030. The forum said the initiative, which was launched at its January 2020 annual meeting in Davos, benefitted more than 50 million people around the world in the first year, despite the pandemic and the economic slowdown. “Even before Covid-19, the rise of automation and digitisation was transforming global job markets, resulting in the very urgent need for large-scale upskilling and reskilling. Now, this need has become even more important,” said Bob Moritz, global chairman of PwC “Upskilling is key to stimulating the economic recovery from Covid-19 and creating more inclusive and sustainable economies ... to make this happen, greater public-private collaboration will be key.”

Upskilling of workforce may add $6.5tn to global GDP by 2030, WEF says

Skills enhancement can add 5.3 million new jobs and may increase global productivity by 3%