Governments around the world are urged to harness digitisation and re-imagine labour markets to drive down unemployment, upskill the workforce and grow their economies, states a new report by The Economist Corporate Network, the business advisory arm of The Economist Intelligence Unit launched recently at the World Government Summit that ran from February 8-10 at Madinat Jumeirah in Dubai.
Leaders at the World Government Summit united to tackle the pressing issues of unemployment and under-employment, especially for youth. Global unemployment has reached nearly 200 million people, with the majority being under 30 years old, while 30-40% of the global workforce is under-utilised, according to ‘Shaping the Future of Work: Technology’s Role in Employment.’
With the rise in the digital economy and Internet of Things (IoT) era, employers are increasingly looking for highly skilled labour. However, there is a major mismatch between available jobs and applicants, according to the report, which examined some of the world’s 20 largest economies, including China, Germany, Italy, Saudi Arabia, South Africa, Spain, and the US.
“Digitisation offers a unique opportunity for government-led efforts to provide decision-makers at all levels with actionable data. As a result, countries can re-imagine the labour market models and re-platform processes to effectively match talent with opportunities, upskill job seekers and empower entrepreneurs. This digital journey has started across the world. Now, the question is not whether digitisation will happen or not, it is who will be the leaders and who will be the laggards,” says Selim Edde, global lead for employment and labour market digitisation, SAP.
Governments must take the lead in developing nationwide and regional technology platforms across the public, private and civil society (academic, non-governmental organisations, individuals) sectors, with a strong focus on supporting small- and medium-sized enterprises, the report asserted.
By leveraging Big Data, analytics, cloud and mobile solutions, this integrated technology platform could analyse millions of data points across citizens’ educational background, skills and match them with job postings and talent development programmes.
“Governments hold a vast amount of data about citizens and residents. Big Data analytics on this technology platform can unlock these data into actionable insights to support efforts to reduce unemployment, creating value, economic growth and more agile governance,” adds Rainer Binder, managing director of Accenture’s global employment and social services practice.
However, the technology platform alone will not solve unemployment. Governments in southern Europe, the Middle East and Africa must first address underlying structural issues, such as underinvestment in value-added industries, insufficient jobs, misalignment between jobs and skills and educational quality, the report states.
The GCC could benefit from internal labour mobility, especially for the high turnover of low-skilled workers, where a technology platform could enable organisations to save costs by recruiting and training locally. As there is also a shortage of mid-level skill sets, the region could benefit from introducing programmes to upskill people, the report suggests.
“Government innovation and public-private partnerships are essential for unlocking insights from Big Data analytics to drive Dubai’s transformation to a global benchmark Smart City. We are working with partners to use a centralised technology platform that not only enhances daily lives, but can also connect individuals to potential careers,” shares Aisha Bin Bishr, director general, Smart Dubai office.
According to the report, in the Middle East and North Africa region, Saudi Arabia in particular is forecasted to see more than 226,000 new entrants into the labour market per annum by 2025, totaling 17.9 million over the next 10 years. The Saudi government will need to accelerate initiatives to support private sector employment, economic diversification, foreign investment, talent competitiveness and female job placement.
Similarly, South Africa – which has the world’s highest unemployment rate – is called on to develop national educational standards, open up labour markets and support affirmative action policies to integrate the disadvantaged into the workforce, the report indicates.
Asian countries face a variety of issues, led by China’s weakening economy, Japan’s tight labour market and South Asia’s low female labour force participation. However, technology applications could help them to weather the economic slowdown, putting in place tools that can deliver suitable jobs.