Digital skills imperative in changing nature of workforce

Two recent reports detail the changing nature of jobs and highlight the importance of digital skills for the workforce. To guard against a greater income divide and ensure a competitive workforce, the studies — one from Brookings and the other from the McKinsey Global Institute — outline policy prescriptions that may ease the transition.

In the study from the Metropolitan Policy Program at Brookings, Digitalization and the American Workforce, authors Mark Muro, Sifan Liu, Jacob Whiton, and Siddharth Kulkarni analyze changes in the digital content of 545 occupations covering 90 percent of the workforce in all industries since 2001. They find that digitalization, which they define as the diffusion of digital technologies into the workplace, continues to increase with jobs requiring more digital skills across all industries. The benefit is higher productivity and pay, while the down side is that an uneven distribution of digital skills may lead to worker pay disparities, the hollowing out of job creation and divergence of metropolitan economic outcomes. The authors contend that the acquisition of digital skills is now a prerequisite for individual, industry and regional success.

The authors say that if society is to benefit from use of new technology without increasing income disparities, adjustments will be needed, such as new, widespread, and more creative initiatives to improve access to digital and related “soft” skills. They recommend that first, firms, industry associations, educational institutions, and governments must work with workers and students to expand the high-skill IT talent pipeline. And second, governments, businesses, and others need to expand basic digital literacy, especially among underrepresented groups. Efforts may include regional tech companies working together to scale up the use of competency and work-based training approaches; greater embrace of apprenticeships and paid internships linked to IT certifications to widen the pipeline of future employees; and, broadening the availability of accelerated learning solutions such as tech “boot camps” and code schools.

McKinsey Global Institute’s report, Jobs lost, jobs gained: Workforce transitions in a time of automation, looks at work that can be automated through 2030 and jobs that may be created in the same period. Similar to the Brookings study, MGI finds that benefits resulting from automation include higher productivity and economic growth. However, to achieve good outcomes, policy makers and business leaders will need to embrace automation’s benefits and address the worker transitions brought about by these technologies, the authors contend. Under different scenarios, the authors found that up to a third of the workforce in the U.S. and Germany may need to switch occupational categories and learn new skills if an earliest automation adoption scenario plays out. While they maintain that new job creation may be able to offset the impact of automation, a larger challenge will be to ensure that workers have the skills and support needed for those jobs.

The study notes that midcareer job training will be essential, along with enhancing labor market dynamism and enabling worker redeployment. Current educational and workforce training models and business approaches to skill-building will be challenged and may require “an initiative on the scale of the Marshall Plan involving sustained investment, new training models, programs to ease worker transitions, income support, and collaboration between the public and private sectors,” the authors say.

It is now critical to reverse the recent trends of eroding investments and policies to support the workforce, the authors say, noting that while policy choices will vary by country, all societies will need to address four key areas to smooth the looming workforce transitions:

• Maintaining robust economic growth to support job creation;
• Scaling and reimagining job retraining and workforce skills development;
• Improving business and labor market dynamism including mobility; and,
• Providing income and transition support to workers.