Global skills gap threatens a sustainable future. Business can, and must, step up
Taking an active role in improving educational outcomes has the potential to be an increasingly profitable endeavour for companies, says Thinkers 50 member Marga Hoek, author of The Trillion Dollar Shift
Strong leadership from more companies that connect their financial success and the success of their surrounding education ecosystem is needed. Companies that do this can create unique positioning in the market and differentiate themselves from their competitors.
Many companies are already responding: education is the issue most commonly addressed by companies working towards the United Nations' Sustainable Development Goals, demonstrating that the business community views education as a top global development priority. Businesses with a strong commitment to changing the education landscape are expanding their work with partners to maximise the impact of their investments. Taking a proactive role in improving educational outcomes has the potential to be an increasingly profitable endeavour for companies.
Businesses are creating shared value by filling unmet educational needs, improving student outcomes and overcoming workforce constraints in ways that bring economic benefits to whole communities as well as the company. Companies can play an integral role in tackling skills shortages at scale. Forward-thinking businesses that transform themselves from passive consumers of talent to catalysts for developing a skilled workforce create a long-term competitive advantage. By contributing their substantial resources and providing insights to help increase employability and economic mobility in their communities, they create shared value.
Training one million youth: India's Godrej Group
Consider the Godrej Group, for example. The major Indian conglomerate with diverse holdings across real estate, consumer goods, appliances and agricultural products is unable to meet its annual growth target of 15 to 20% because of widespread skill shortages throughout its potential workforce. Young Indians between ages 15 and 24 make up the fastest growing segment of the population, representing 30% of the labour force. Yet this demographic is three times more likely to be unemployed, often because they lack marketable skills.
These issues are a problem, not only for Godrej Group but also for their suppliers and distributors. In response to this dilemma, the company set a goal of training one million urban and rural youths in employable skills by 2020.60 Adi Godrej, chairman of the Godrej Group stated his, and other companies’ commitment to continued educational opportunities for their employees, when he said: “Many Indian companies have increased their emphasis on training tremendously. I think it is absolutely essential to spend a lot of money on training and continuous improvement. In our group every employee has to undergo at least five days of training a year.”
Taking a more flexible attitude toward education can help bridge the skills gap. Education for a changing labour market needs to be adaptable and have opportunities outside of the traditional scholastic setting. This strategy gives youths the ability both to learn new skills and learn how to learn new skills when needed. To create a more agile education system, we need to foster closer relationships between employers, education providers and students to close the skills gap. Enhancing the links between business and formal education can enrich the business ecosystem and bring more innovative ideas to fruition, launch more job-creating start-ups, and help more companies find skilled labour and innovations.
The technological shift
The skills gap is present with each shift we encounter in the labour market. As mentioned earlier, the transition from fossil fuels to renewable energy sources requires people who are trained to work in these new industries. Additionally, with the advent and expected surge in robotics, and other technological innovations such as driverless cars, more industries will shift. Taxi drivers, truckers and bus drivers will probably find that they need retraining to find jobs in growing industries, as the need for humans to do this kind of driving diminishes.
Other areas where automation is likely to prevail include low-skilled jobs, but also some traditionally higher-skilled jobs such as doctors and accountants. Not only will some of these jobs disappear, but the skills needed for the jobs that remain will evolve and necessitate a better command of technology. Surgeons, for example, are working together with robots to perform intricate surgeries that require high-level technical skills. Other jobs that used to require high school diplomas are now evolving to require specialised training of advanced skill-sets. The reality is that we are facing change in the employment landscape and education offerings must keep up with these changes.
Keeping up with the changing employment needs requires funding. But even with the progress that is being made in the education field, there is a large gap between the funding for education that’s currently available and what’s needed to achieve the sustainable education goal.
Worldwide development assistance for basic education dropped by almost 7% between 2010 and 2013, while overall global development aid increased by more than 9%. In addition, there is declining support for fragile and conflict-affected countries. Globally, there is a significant gap in the amount of capital that will need to be allocated to education. Ensuring that every child and adolescent in low and lower-middle income countries has access to good quality education from the pre-primary to upper secondary level requires an influx of billions of dollars. Closing the gap and raising the necessary capital will not be easy without help from the business community.
Marga Hoek (pictured) is a global thought-leader on sustainable business, international speaker and the author of The Trillion Dollar Shift, a new book revealing the business opportunities provided by the UN’s Sustainable Development Goals, free in e-book
Forward-thinking businesses that transform themselves from passive consumers of talent to catalysts for developing a skilled workforce create a long-term competitive advantage