We need a revolution in education and skills if humans are to thrive in the future economy, says World Economic Forum
People’s knowledge, talents, creativity and skills are key drivers of a prosperous and inclusive economy but, as we enter the Fourth Industrial Revolution, countries are coming up worringly short. Maximising human capital must be a top priority for people leaders.
Inadequate focus on lifelong learning, the failure to develop high-skilled opportunities and a mismatch of skills required for entering and succeeding in the labour market are resulting in efforts to fully realise people’s economic potential falling short.
Nearly a third of the world’s human capital is under-developed, according to the World Economic Forum’s Human Capital Report 2017, released on 13 September.
The World Economic Forum defines human capital as the knowledge and skills people possess that enable them to create value in a global economic system. According to the report’s Human Capital Index, only 62% of human capital has now been developed globally. Just 25 nations have tapped 70% of their people’s human capital or more. With the majority of countries leveraging between 50% and 70% of their human capital, 14 countries remain below 50%.
Countries’ failure to adequately develop people’s talents is depriving people of opportunity and access to good quality work, thereby underpinning inequality. Only by building deep, diverse and resilient talent pools and skills ecosystems will countries enable inclusive participation in good quality, skilled jobs by the largest possible number of people, says the report.
Klaus Schwab, founder and executive chairman of the World Economic Forum, says it is all the more important to address the gap given the context of the Fourth Industrial Revolution, which is characterised by new technologies fusing the physical, digital and biological worlds, such as artificial intelligence and mobile supercomputing.
“Managing the transition towards deeper investment in human potential in the context of the Fourth Industrial Revolution is one of the most important political, societal, economic and moral challenges we are facing today”, he says.
“The Fourth Industrial Revolution does not just disrupt employment, it creates a shortfall of newly required skills. Therefore, we are facing a global talent crisis. We need a new mindset and a true revolution to adapt our educational systems to the education needed for the future workforce.”
The Human Capital Report measures 130 countries against four areas of human capital development: capacity (determined by past investment in formal education), deployment (the application and accumulation of skills through work), development (the formal education of next generation workforce and continued upskilling and reskilling of existing workers) and know-how (the breadth and depth of specialised skills-use at work.
This year’s top 10 is headed by smaller European countries— Norway (1), Finland (2), Switzerland (3)—as well as large economies such as the United States (4) and Germany (6). Four countries from the East Asia and the Pacific region, three countries from the Eastern Europe and Central Asia region and one country from the Middle East and North Africa region are also ranked in the Index top 20. The UK ranks in 23rd position while India is 103.
At a regional level, the human capital development gap is smallest in North America, followed by Western Europe, Eastern Europe and Central Asia, East Asia and the Pacific, Latin America, and Middle East and North Africa. The gap is largest in South Asia and Sub- Saharan Africa.
“The world is endowed with a vast wealth of human talent,” says Schwab. “The ingenuity and creativity at our collective disposal provides us with the means not only to address the great challenges of our time but also, critically, to build a future that is more inclusive and human centric.
“All too often however, human potential is not realised, held back either by inequality or an unrealistic and outdated faith on the part of policymakers that investment in small sub-sections of highly skilled labour alone can drive sustainable, inclusive growth.”
Countries’ failure to adequately develop people’s talents is depriving people of opportunity and access to good quality work, thereby underpinning inequality