The 2023 version of the World Economic Forum’s Future of Jobs Report was released this week. I’ve been especially anxious for this (fourth) edition, because it is the first since we started moving beyond the Covid-19 pandemic. I’ve been concerned about the world’s most vulnerable populations and interested in the impact of technology and other factors, such as supply chain shifts, on jobs.
I encourage you to read the report, which includes responses from 803 companies employing more than 11.3 million people globally. This blog highlights some key findings from the report that might be interesting to the GBSN community. These findings are discussed across three broad areas: employment outcomes; technology and jobs; and core skills, assessment, and training.
The report highlights divergent employment outcomes across geographic regions and populations. Low-income and lower-middle-income countries have been slower than high income countries to recover from the pandemic. According to the report, “at 4.9%, the 2022 unemployment rate across the OECD area is at its lowest level since 2001. By contrast, many developing economies have experienced a comparatively slow labour-market recovery from the disruptions induced by the COVID-19 pandemic.” (p. 8) The formal unemployment rate in South Africa, for example, increased to 30% from 25% before the pandemic.
Women, young workers, and workers with a basic education were among the most adversely affected in terms of employment. The report notes that “according to the World Economic Forum’s Global Gender Gap Report 2022, gender parity in the labour force stands at 62.9%–the lowest level registered since the index was first compiled.” (p. 12) Also, “less than half of the global youth employment deficit projected to have recovered by the end of 2022” (p. 12) and “in many countries the increase in unemployment from 2019 to 2021 of workers with a basic education level was more than twice as large as the impact on workers with advanced education.” (p. 13)
The report also expresses a sense of urgency regarding the lack of social protection for the nearly 2 billion workers globally in informal employment, as well as the differential impact of high inflation. Authors cite research by the United Nations Development Programme (UNDP) indicating that “rising food and energy prices could push up to 71 million people into poverty, with hot spots in Sub-Saharan Africa, the Balkans and the Caspian Basin.” (p. 14)
Technology and Jobs
Technology continues to be the most important factor shaping the future of jobs, but it is important to take a more nuanced approach and consider the influence of other trends, such as environmental action. According to survey respondents, the top two macrotrends driving business transformation were “increased adoption of new and frontier technologies” and “broadening digital access.” (Figure 2.1, p. 21) However, when it comes to net job creation, “investments to facilitate the green transition,” the “broader application ESG standards,” and “climate change induced investments into adapting operations” were ranked higher than the technology drivers by survey respondents.
In addition to big data analytics, companies rank climate change and environmental management technologies, and encryption and cybersecurity as creating the greatest job growth. (Figure 2.5, p. 25) Particularly interesting is that of the 28 technologies included in the survey, only robots (humanoid and non-humanoid) are expected by companies to result in net losses of jobs. While substantial proportions of companies forecasted job displacements in areas such as artificial intelligence, e-commerce and digital trade, digital platforms and apps, and agriculture technologies, those losses were offset by growth elsewhere. It will be important to have strategies and support systems that enable workers to move quickly to new opportunities, created by technological advances.
In general, the report finds that the “fraction of automated tasks has increased less than previously expected, and the horizon for future automation is stretching further into the future than surveyed businesses previously anticipated.” (p. 26) In 2020, employers predicted 47% automation by 2025. This year, employers predict 42% automation by 2027. It will be interesting to see how recent advances in generative AI will impact this horizon moving forward.
Core Skills, Assessment and Training
The top two required core skills are analytical thinking and creative thinking, followed by resilience, flexibility, and agility; motivation and self-awareness; and curiosity and lifelong learning to round out the top five. (Figure 4.2, p. 38) Not surprisingly, these areas are receiving attention in the reskilling strategies of companies. However, the report also notes several other skills which companies do not rank highly but are receiving much more attention in reskilling efforts, indicating areas of emerging strategic importance. These skills include AI and big data, as well as leadership and social influence, design and user experience, and environmental stewardship. (Figure 4.5, p. 42) AI and big data is the “number one priority” in training strategies for companies with more than 50,000 employees. (p. 46)
Skills are dynamic. Companies now predict that 44% of workers’ core skills will change in the next five years, compared to 35% in 2016. (p. 37) And it is often difficult to hire employees with the needed skills. Businesses cite skills gaps in the local labour market most frequently among factors that limit the transformation of their business. Coming in second is the overall inability to attract talent. Particularly important to GBSN is that “skills gaps are reported to be most problematic in Sub-Saharan Africa, where they are seen to limit the transformation of 70% of companies.”
Companies are more optimistic about developing the existing workforce than about finding and retaining talent. (Figure 5.3, p. 51) Given the positive outlook for talent development, the report considers the composition of training programs. Not surprisingly, the most common approaches are through on-the-job training and coaching and in-house training departments. That’s followed by employee-sponsored apprenticeships. External suppliers, such as professional associations, private-sector online-learning platforms and universities, are expected to deliver very little of the talent development work. (Figure 5.9, p. 58)
When it comes to assessing potential hires, 71% of businesses evaluate work experience, 47% use skill assessments, and 45% look at the completion of university degrees. While currently only 20% look at the completion of short courses and online certificates, that is expected to increase, because of their flexibility and “given that 82% of companies plan to adopt education and workforce development technologies in the next five years.” (p. 54)
There is much more to the Future of Jobs Report. Hopefully, this short preview will stimulate your interest. I especially like the infographics page, which can be found here. I encourage you to read the report and share your thoughts about what is most interesting.
Dan LeClair, CEO
Dan LeClair was named CEO of the Global Business School Network (GBSN) in February of 2019. Prior to GBSN, Dan was an Executive Vice President at AACSB International, an association and accrediting organization that serves some 1,600 business schools in more than 100 countries. His experience at AACSB includes two and half years as Chief Strategy and Innovation Officer, seven years as Chief Operating Officer, and five years as Chief Knowledge Officer. A founding member of the Responsible Research in Business and Management (RRBM) initiative, Dan currently participates on its working board. He also serves in an advisory capacity to several organizations and startups in business and higher education. Before AACSB, Dan was a tenured associate professor and associate dean at The University of Tampa.
Dan played a lead role in creating a think-tank joint venture between the European Foundation for Management Development (EFMD) and AACSB and has been recognized for pioneering efforts in the formation of the UN’s Principles for Responsible Management Education (PRME), where he served on the Steering Committee for many years. Dan has also participated in industry-level task forces for a wide range of organizations, including the Chartered Association of Business Schools, Graduate Management Admission Council, Executive MBA Council, and Aspen Institute’s Business and Society Program.
Widely recognized as a thought leader in management education, Dan is the author of over 80 research reports, articles, and blogs, and has delivered more than 170 presentations in 30 countries. As a lead spokesperson for reform and innovation in management education, Dan has been frequently cited in a wide range of US and international newspapers, magazines, and professional publications, including the Wall Street Journal, Financial Times, New York Times, China Daily, Forbes, Fast Company, and The Economist. Dan earned a PhD from the University of Florida writing on game theory.