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Blog: Changing skills needs: How to prepare the workforce for the jobs of the future?

Opinion by Katharine Mullock, OECD Economist.

No one likes being the sad kid not invited to the birthday party. Especially when it is a party that makes your neighbours richer and happier, while your income stagnates or declines. Between 2000 and 2010, manufacturing jobs in the United States fell by 5.7 million, eliminating a traditional pathway to a middle-class lifestyle for many workers with only a high-school education. Though the US unemployment rate is nearly back to pre-crisis levels, manufacturing jobs have not recovered, and the share of high-school educated people who are not working among the civilian population has jumped from 38 per cent to 46 per cent since 2010 (US Bureau of Labor Statistics). Technological progress and globalization, purported to be “a rising tide that lifts all boats”, has left many feeling uninvited to the party.

Declines in manufacturing jobs are not limited to the United States, but are part of a global phenomenon driven by technological progress and increasingly globalized supply chains. These forces have polarised labour markets by reducing demand for routine mid-skill jobs like manufacturing, while raising demand for non-routine jobs at the low and high ends of the skills spectrum. While globalization and technological change have the potential to boost productivity and economic growth, they come with no guarantee of inclusivity. Feeling left behind from the gains of technological progress no doubt underlies the social tension and anxiety manifested in recent political change observed in several OECD countries. Governments and policy makers are being called upon to address this social anxiety, and to create conditions for more inclusive growth.

Promoting inclusive growth depends on everyone having the right skills for an increasingly digital and globalized world. Anticipating what the right skills are, however, is not a straightforward task due to changing skill needs. While automation redesigns and makes obsolete some jobs, it also generates innovative economic activities that lead to new jobs, requiring the workforce to develop a fresh set of skills. Even among workers who keep their jobs, the types of tasks they perform are changing. According to OECD estimates, less than 10 per cent of workers are in jobs that are at risk of being replaced by machines, but 25 per cent are in jobs where a high percentage of tasks (50-70 per cent) could be automated (Arntz et al., 2016). The changing nature of jobs underlines the need for workers to develop skills that make them flexible and resilient.

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Katharine Mullock
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