Ladies and gentlemen,
I want to thank Science Po, particularly, Dean Letta and Director Mezzera for convening this meeting. I am honoured to be with you today to speak about the workforce’s skills for the future.
Pace and Depth of the Digital transformation
Let’s start from the begining. The digital transformation is changing our World dramatically. It is not only the depth of this transformation that poses great challenges, but also the pace. It took 5 years for 25% of the US population to acquire smartphones, while it took decades for previous technologies, like television and electricity, to reach the same market size.
Indeed, over half of the world’s population is now connected to the Internet, compared to only 4% twenty years ago. And smartphones are imposing a ‘always-on” lifestyle.
Technology is pervasive.
According to the OECD PISA, 43% of 15 year-olds spend between 2-6 hours a day online and today over half of them report “feeling bad” if they are not connected to the Internet. With all the ups and downs, we cannot deny that technology is amazing when it allows you, as in my case, to see your daughters in the other side of the Atlantic, in Montreal!
Digital technologies are not only changing the workplace, but also the way we get our news, the way we interact (or not) with each other, the way we participate in democratic processes. So their impact is felt beyond the labor market. These issues are beyond our conversation today, but are life changing ones.
Skills for the labor market
However, given your role in preparing the students for the world of work, let’s focus for a moment on this.
You all know that the main uncertainty derived from the changing world, is that traditional professions and activities are changing in nature and scope, and new professions are being invented. The new generations will not have a job for a life time, but several occupations, and change will be the only constant. This is where the concepts of lifelong learning and adaptability get new meaning.
For the institutions, anticipating change and preparing people to thrive, is of the utmost importance. But also to support those that are already in the labor market. We cannot get comfortable with business as usual.
And the wave of change has also been impacting the labour market worldwide
In the next 10-20 years, 14% of existing jobs could disappear as a result of automation, another 32% could face substantial change in how they are carried out. These jobs are usually those that can be automated, the routine jobs, the middle skills jobs.
In the meantime, other professions are being invented. For example, big data architects, cloud service or digital marketing specialists did not exist until recently.
Job contracts are also changing. Those linked to the platform economy are exploding. These Jobs officially earn the classification of ‘self-employment or entrepreneurship”, although this is not always the case.
In the meantime, our current skill sets will only last for the next decade or two, as technology advances.
Skills mismatch
Even more shockingly, in a context were we have the most educated generation of our lifetime, too many workers face job mismatch: they are either over- or under-qualified.
According to a recent global survey, 38% of employers reported problems finding the right employees with the right skills. In Latin America, this was half of the employers! In this graph, you can see that almost 40% of workers have a mistmatch of qualifications. But this jumps to 52% in South Africa, 41% in UK and Spain, 38% in Italy and Canada, 34% in Frence.
At the same time, large numbers of higher education graduates face difficulties in finding job opportunities matching their qualifications. One in three are overqualified, although this does not mean they are overskilled. This is a source of frustration and anger for many students and employers!
So one of the main duties of your institutions, and of the governments of our countries, is to try to connect the skills you are working to shape better with the requirements of the market.
Information systems to understand the evolving needs of the market, in partnership with the private sector, become indispensable if we want our students to succeed. This requires strong multistakeholder cooperation.
An interesting source of mistmatch is also related to the lack of digital skills. This is an interesting real-world paradox, where in a technologically rich environment, there are still many workers that are not comfortable using computers! According to our PIAAC survey, which measures the competencies of adult population, only 25% of participating adults felt at ease using computers!
There is also still a low share of graduates entering into disciplines that would enable them to master technology better. Adults with a tertiary degree in engineering manufacturing and construction and natural sciences, mathematics and statistics earn over 60% more than adults with upper secondary education[1].
It is clear that a high premium is given to students with STEM skills, and this is particularly worrisome for girls. I will come back to this later.
When responding to these challenges, we should also consider the broader picture, as with increased inequalities of income and opportunities in many OECD countries, we should not forget those that are left behind.
The digital transformation, if it is not well managed risks opening a large divide, not only among individuals, but also among enterprises. There are clear “winner takes all” dynamics at play in the digital world.
Let me give you an example. Even though we are all worried about the slowing down of productivity growth (a paradox in the age of innovation), when you go more granular and compare the productivity of leading and laggard firms the results are staggering. While frontier firms, particularly in services, can gain 3-5% productivity growth each year, the rest of the firms exhibit flat productivity.
To this, you should add the question of data ownership, data sharing, and data utilization. Those that collect and curate data are at the frontier, and developing the markets, through AI experiments. They have access to finance, they have access to skills. They will pull away from all of the rest that do not have access. This is why data governance is so important.
The outlook here is not so comfortable. Only 250 firms globally generate 70% of R&D and patents, and 44% of trademarks.
And most of the world’s top R&D investors are located in the US, UK, Germany, China and Japan.
The rise of online platforms is also concentrated: Of the top 15 platforms in 2017, 9 were US companies.
Gender angle
While this is happening, we know that half of the world’s population still does not have access to the internet. Even worse, 250 million fewer women than men are online.
Actually, all the gender gaps as we know them (of representation, of distribution of unpaid work, on wage gap, on leadership gap) will pale with the trends we are seeing in the digital world. There are few girls who opt for ICT
disciplines. They have less access to technology, and according to our “Gender and Digital” report, 90% of software development is done by male only teams.
Beyond re-thinking how to bridge these divides, we should also reframe the way we deal with the technolgy, not only to be prepare individuals to master it, but to be in charge of its development and impact. First, to use technology to find answers for the social and environmental challenges we face, but second to avoid the downsides of this technologies as we saw in Christchurch. We need to be technology shapers!
Broader reflection on education
This leads me to my final reflection, on the broader role of education and skills formation. We live in a convoluted world so the skills of the future are not those that only focus on preparing for the labour market, but those that prepare for life.
Those that turn our students into agents for change building a more peaceful, sustainable and inclusive growth. Yes, education to know, education to do, but more importantly, education to be!
Nobody will put away the technical and specialized knowledge, but this is only step number one. At the OECD we developed the “Global Competencies Framework”. This is already being integrated in PISA.
Global competencies is the capacity to examine and take into account global and local perspectives, tolerance to other views, values and cultures and to act for collective well-being and sustainable development.
Empathy, compassion, open mindedness are key. Thinking beyond their own good lives and jobs.
It sounds obvious, but at this very moment in history, we seem to be in great shortage of these qualities, particularly among leaders in many countries.
To achieve this, what’s the role of education institutions? The one that can provide the following:
Instead of learning in silos, we need the capacity to think across disciplines, to connect ideas and construct information. We need libre penseurs, that are well aware of international developments and risks.
And with the rise of fake news and social media echo chambers, we need individuals with the ability to distinguish fact from fiction. Critical thinking will be essential in our digital age.
How can education serve to fulfill this mission?
By nurturing students’ strong moral compasses throughout their education process, so that they will be able to develop future technologies that respect human rights, promote tolerance and uphold democratic values. This mission is well in line with the Principles of AI that the OECD delivered last year.
And these broad skillsets are in high demand in today’s job market. Recent evidence from the OECD Skills for Jobs database[2] shows that employers typically place a high premium on transversal skills such as teamwork, adaptability, problem-solving, and communication when hiring new graduates. The famous socio emotional skills.
Ladies and Gentlemen,
The context we are living in challenges us to think outside the box. This is why we launched the graduate course of Economic Diplomacy with Enrico, Peter and others, trying to promote exactly these skills for students to thrive in an international setting.
The broader definition of the value of skills in the digital world, goes hand in hand with the effort that the OECD has been making to advance a people’s centered agenda for growth.
For many decades, economic growth has been the main objective of economic policy, and we always assumed that growth would trickle down.
With increased inequalities of income and opportunities, with the constant depletion of natural resources, impending climate emergency, social unrest among the most stable countries like Chile, the rise of populism and nationalism, conflictual ways of dealing with these issues, this growth model need to be re-thought.
It has not even delivered to improve productivity and growth!
This is why we launched NAEC and IG that are calling for a growth path that puts people’s well being at the center, that is inclusive and sustainable.
The skills that are required for this, and to shape the technological revolution in a way that serves humanity, will certainly contribute more to the achievement of the SDGs, the Paris Agreement and to a more peaceful world.
Institutions like yours are at the centre of this agenda and it was my pleasure to share our views with you.
Thank you.
[1] OECD (2019), Education at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/f8d7880d-en.
[2] Box 3.1 (OECD, 2017[9])
