Policy Briefs

Employment & Education: B20 Brasil 2024 Policy Paper

With the advent of rapid technological advancements such as Artificial Intelligence, automation, Big Data and other digital tools, the industrial landscape is changing rapidly along with the nature of work. This shift presents both opportunities and challenges.

As new and modern technologies demand new skills and require greater human-machine collaborations, workers, especially the youth need to be equipped with the right skills and knowledge to thrive in this ever-growing dynamic environment. Skilling, reskilling and upskilling therefore have become critical imperatives for bridging skill gaps and building an efficient and future-ready workforce.

At the same time, it is essential for global policymakers to focus on inclusive policies that promotes diversity at workplaces, across gender and different socio-economic classes to ensure equal opportunities for all. This is particularly important in the face of key global challenges including climate change and rising income inequalities. Focus on education and employment in this context is crucial for ensuring a smooth transition to a green and sustainable future.

Given this backdrop, the B20 Brasil Task Force on Employment and Education developed the policy paper on ‘Employment and Education’ that focuses on three key areas where actionable policy measures have been suggested, the effective implementation of which can drive business growth and opportunities, along with creating decent jobs. A summary of the key policy recommendations is provided below.

Recommendation 1: Prepare a Resilient & Productive Workforce for the Future of Work

Rapidly evolving trends such as digitization along with constant disruptions including innovation and green technologies are constantly shaping the future of work. It is estimated that around 83 million jobs will be lost due to technology disruptions while 69 million new opportunities will be created in the coming years. However, outdated curriculums and inadequate digital and financial literacy are key challenges that lead to demand and skills mismatch coupled with talent shortages.

Inflexibility of present learning systems to meet diverse needs lead to skill gaps in key areas. As per a WEF study 80% of future jobs will demand environment skills. The lack of focus on sustainable literacy in current learning systems is a key challenge in this regard. The lack of adequate teachers exacerbates these problems. A UNESCO study projects around 44 million additional teacher requirements by 2030 in secondary education to meet the global education goals SDG (Sustainable Development Goals).

Talent Shortage around the world, selected G20 economies (2024)

Source: B20 Brasil Policy Paper on Employment and Education

Given these challenges, educational and training systems reforms are topmost priorities for building an efficient and an agile workforce that can keep pace with the constantly changing nature of work. Focus on continuous, lifelong learning and upskilling opportunities that are aligned with current labour market requirements are also essential prerequisites.

Two key policy actions are suggested to address the challenges related to current inadequacies in training and education systems, evolving technology infrastructure gap, talent shortages and current mismatch between labour requirements and learning opportunities.

Policy Action 1.1: Improve quality and relevance of basic K-12 education and vocational training by updating teacher training, with a focus on developing digital and sustainability skills; designing new curricula through business engagement and mapping competency gaps.

Policy Action 1.2: Enhance reskilling and upskilling to reduce talent shortages and skills mismatch, especially in digital and green sectors; offer financial incentives to develop guidelines and frameworks for facilitating work-integrated learning solutions and promoting skills recognition.

In addition to enhancing human capital development, the above policy recommendation can have significant impacts on accelerating the net zero transition process by facilitating the adoption of clean and green technologies.

Recommendation 2: Ensure a Diverse, Inclusive, and Adaptable Workforce

Several socio-economic factors and current outdated frameworks hinder improving working conditions, particularly among the vulnerable and underrepresented groups. Workforce disparities based on gender, ethnicity, age, minority status and others are major obstacles towards achieving an inclusive workplace. Current geopolitical tensions and macroeconomic challenges in the post-Covid era have further compounded the unemployment problem, especially among the youth. The OECD unemployment rate was estimated at 4.8% in January 2024.

Traditional gender roles particularly impact work opportunities for women and exacerbate the problem of gender disparity, which is more severe in the least developed countries. Women continue to be underrepresented in senior leadership roles across countries and across sectors, with lower participation recorded in fields including manufacturing (24.6%), agriculture (23.3%), supply chain and transportation (23%), oil, gas, and mining (18.6%) and infrastructure (16.1%).

The informal sector, which employs an estimated 58% of the global workforce also faces persistent economic challenges limiting access to safe and stable work opportunities and social protections.

Lack of legal frameworks in many countries, including the G20, that effectively addresses workplace discrimination, is also a major challenge that needs urgent policy attention.

In the light of these issues, the following policy actions are suggested to promote a diverse, inclusive and an adaptable workforce.

Policy Action 2.1: Promote diverse and inclusive workplaces by implementing reward regulations that enhance and promote career growth opportunities for underrepresented groups; strengthen financial incentives to support care provisions.

Policy Action 2.2: Support transition of workers to formal economies by adopting regulatory frameworks to recognize alternate and future forms of work and impact of technology in jobs; introduce international tax frameworks, labour information systems and standards for safe and regular migration to facilitate worker mobility.

Implementing above policy measures have significant potential to promote inclusive growth and support socio economic inclusion. It can also help address challenges including hunger and income inequalities while fostering human resource development.

Recommendation 3: Foster Innovation and Sustainable Growth

Innovation is a key driver of growth, productivity, and competitiveness. Innovation helps businesses achieve scale and resilience.

However, slower rate of technology adoption and inadequate digital infrastructure can impact job creation. It is estimated that automation of all business-related tasks will increase from the current 34% to 42% in 2027. Further, according to a DataRobot study, 36% of surveyed technology leaders in US and UK reported that their organizations were negatively impacted by data bias. Thus, the risks emerging from the potential societal impacts of advanced technologies such as AI, particularly around issues of fairness, accountability, and transparency needs to be addressed.

The above is particularly a key challenge for MSMEs, which have been plagued with several hurdles, especially in the recent past due to the challenging global environment. Developing regulatory measures to enhance development support, including digital support along with adequate financing would be essential for empowering MSMEs and bringing them under the ambit of the formal economy.

Integration between higher education institutions and the private sector can significantly encourage technological development and innovative practises. Greater investments in R&D and supporting R&D through various channels including tax incentives, government grants, provision of relevant infrastructure and other financial tools are essential for driving long term sustainable economic growth.

Following two policy actions are suggested in this context.

Policy Action 3.1: Fostering innovation in strategic areas along with scientific and technological development by creating shared research and digital infrastructure; business engagement in higher education and facilitating increased access to government funding.

Policy Action 3.2: Actively support MSMEs and entrepreneurships and develop regulatory measures to improve access to credit; foster R&D solutions to drive innovation and growth.

The above policy actions can significantly enhance productivity by catalysing innovation and R&D, while providing support to MSME’s and start-ups. Developing regulatory measures to support entrepreneurial systems and enhancing credit access to MSMEs can also significantly foster resilient global value chains.