January 7, 2019
A new report from the World Bank has call for more investment in people to prepare them for the economies of the future. The 2019 World Development report (WDR) “The Changing Nature of Work” claims that digital technologies are driving the demand for advanced cognitive skills, socio-behavioral skills, and adaptability in labour markets. The digital economy also presents an opportunity to create more jobs.
- Firms can grow rapidly thanks to digital transformation, which blurs their boundaries and challenges traditional production patterns.
- The rise of the digital platform firm means that technological effects reach more people faster than ever before.
- Technology is changing the skills that employers seek. Workers need to be good at complex problem-solving, teamwork and adaptability.
- Technology is changing how people work and the terms on which they work. Even in advanced economies, short-term work, often found through online platforms, is posing similar challenges to those faced by the world’s informal workers.
What can governments do? The 2019 WDR suggests three solutions:
- Invest in human capital especially in disadvantaged groups and early childhood education to develop the new skills that are increasingly in demand in the labor market, such as high-order cognitive and socio-behavioural skills
- Enhance social protection to ensure universal coverage and protection that does not fully depend on having formal wage employment
- Increase revenue mobilisation by upgrading taxation systems, where needed, to provide fiscal space to finance human capital development and social protection.
- The report also features the new Human Capital Index, released last October in Bali, which provides countries with a way of measuring the impact of their investments in the health and education of their populations on future productivity. MENA countries performed poorly compared to peers, due in particular to weak learning outcomes.
“Even though MENA countries have been spending large shares of their budgets on education and have achieved remarkable progress on boosting access, students are graduating without the skills in demand by the labor market. University graduates are now more likely to be unemployed than people with lower qualifications,” said Ferid Belhaj, World Bank Vice-President for the MENA region. “The World Bank strategy for MENA focuses on helping equip the youth of the region, those of today and tomorrow’s youth, so they can reach their ambitions and contribute to the sustained and virtuous development of their countries.”