The World Economic Forum (WEF) said that accelerated investment in improving the skills of the workforce could boost global gross domestic product (GDP) by at least $6.5 trillion and create 5.3 million new jobs by 2030.
Reskilling workers will help to develop more inclusive and sustainable economies as the world looks to recover from the economic slump triggered by COVID-19, the WEF said in Upskilling for Shared Prosperity, a report released recently.
“The skills enhancement needed for jobs created by the Fourth Industrial Revolution can also increase global productivity by 3 percent by 2030. The net new jobs created will be those that are complemented – rather than replaced – by technology,” according to the report.
“Millions of jobs have been lost through the pandemic, while accelerating automation and digitization mean that many are unlikely to return. 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 WEF report has considered two scenarios based on the steps countries take to reduce skills gaps, in line with guidelines devised by the Organization for Economic Cooperation and Development (OECD). An accelerated scenario assumes skills gaps are closed by 2028, which would add $6.5 trillion to global GDP. Its core scenario assumes closure of skills gaps by 2030, which would contribute an additional $5 trillion to global GDP.
Less developed economies, as well as countries with larger skill gaps, may see greater gains as a percentage of GDP through upskilling efforts. China, the US, India, Spain and South Africa are likely to benefit 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 gain more than 7 percent additional GDP by 2030 “if they start investing in upskilling now”.
“Both regions are characterized 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.”
The COVID-19 pandemic has tipped the world economy into the worst recession since the 1930s. Governments and central banks have poured more than $12 trillion in fiscal and monetary stimulus to stabilize financial markets, support their economies and protect jobs.
Global output is now set to expand 5.2 percent in 2021 after contracting 4.4 percent last year, according to the International Monetary Fund’s (IMF) projections. However, millions of jobs lost amid movement restrictions and lockdowns to control the spread of the virus are unlikely to come back.
Businesses are also increasingly looking to invest in automation and digitization, as they remodel to prepare for growth amid the transformation of the industrial sector, with machine learning, artificial intelligence and the Internet of Things eliminating the need for human intervention in many roles.
Three out of five adults across the world singled out job security and loss of income among the top risks this year in a joint WEF and Ipsos study, 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 upskilling report is part of the forum’s Reskilling Revolution initiative that aims to provide better education, skills and work to one billion people by 2030. Launched at the WEF January 2020 annual meeting in Davos, the platform’s initiatives, despite the pandemic and the global economic downturn, are estimated to have benefited more than 50 million people globally in the first year, according to the WEF.