Issue Briefs

The Imperative to promote Digital Skills

Digital skills for the future of work

The rapid pace of digitization in the current era has made digital skills an absolute necessity for the modern workforce, with at least 9 out of 10 jobs in the future requiring some level of digital proficiency. The Covid-19 pandemic highlighted the criticality of digital expertise, as demand for digital skills increased manifold, with more jobs moving online.

With the advent of Industry 5.0 or the next stage of digital transformation, the digital skilling imperative has taken centre stage. This new production model requires humans to work with machines, which requires understanding of advanced technologies including automation systems, robotics, Artificial Intelligence (AI), Internet of Things (IoT), cloud computing, among many others. With more and more organizations adopting Generative AI, and the adoption rate increasing from 20% in 2017 to 72% in 2024, AI adoption alone could lead to 12 million occupational shifts by 2030 as per the latest McKinsey Global Survey on AI.

As the workplace is changing because of digital and AI-powered technology, these changes make acquiring additional skills necessary for retaining as well as changing jobs in the future of work. These changes are also more likely to impact low-wage and low skilled jobs the most.

As per the World Economic Forum, 1.1 billion jobs are expected to be transformed by technology in the coming decade, and half of the global workforce may need reskilling over the next two years. Digital upskilling of the workforce across sectors is therefore essential for adapting to the new technology demands of the dynamic and rapidly evolving work landscape.

Key barriers to creating a global digital workforce

While the advent of digital transformation and new business models present many opportunities and promises growth and innovation, it also presents many challenges. A series of interrelated factors pose significant hurdles to creating a global digital workforce. These barriers must be addressed to unlock the full potential of the digital transformation to foster an inclusive, innovative, and agile global workforce.

The key among these is the lack of digital skills across existing workforces. Shortage of workers with digital skills is the most important problem facing companies today. Employees need digital skills for working with new technologies and managing digital transformation. Missing skills such as an understanding of technologies, their deployment, and the change in processes along with limited access to quality digital skills training programmes are key barriers.

As per the Tech Skills Transformation report by EY and iMocha, 81% of organizations surveyed, reported a shortage of skilled workers, specifically the lack of ‘power user/developer’ tech skills. The high demand for roles such as application developers and business app users make digital upskilling with enabling tech skill transformation programmes for workers a critical imperative.

Source: Tech Skills Transformation Report

Second, is the challenge of equitable skill development. The rise of new and emerging technologies and the lack of access to such technologies due to issues of social and economic inequities is a leading cause behind the widening digital gap across different socio-economic groups. There are significant gaps across regions, income levels as well as gender. As per UNICEF, among the youth in the age category of 15-24, only 65 females have digital skills for every 100 males. In terms of internet use, 90% of young girls are offline in the low-income countries, as compared to 78% of young boys. This gap is the largest in South Asia, followed by West and Central Africa and Eastern and Southern Africa.

The lack of access to information and poor connectivity, especially digital connectivity in some regions is also a critical barrier that has widened the digital divide. For example, global inequities in availability of digital tools such as computer penetration rates limit the potential of doing digital work. As per World Economic Forum’s White Paper on Realizing the Potential of Global Digital Jobs, the average household computer penetration rate in Europe and Central Asia is 71% in contrast to rest of Asia at 44%, Latin America at 40%, and Sub-Saharan Africa at only 16%. Availability of critical technology infrastructure and facilitating their equal access across these regions is therefore a crucial requirement for promoting global digital inclusion and a global digital workforce.

Similarly, the lack of internet penetration is another key issue. According to the International Telecommunication Union, 2.6 billion people, i.e. one third of the global population still lack internet access. The issue is more severe in developing and less-developed regions. As per United Nations, while 63% of the world’s population is connected, only 27% of least developed countries have internet connectivity. The inequitable access to internet is further aggravated during emergencies and sudden shocks such as the Covid-19 pandemic, when access to information becomes imperative for survival. Therefore, the growth of ICT must be sustainable and inclusive to ensure that no one is left behind.

Finally, at the organizational level, the lack of scale in upskilling digital efforts is another barrier that must be addressed by organizations to bridge the digital gap. As per a CEOs survey conducted by PWC, only 18% of leaders believe that their organization has made significant progress in establishing upskilling programmes. The lack of upskilling also causes more and more employees to consider shifting jobs – with almost one third of PWC survey participants reporting that they are extremely likely to leave their jobs. The changing work environment and changing job roles require greater investments in skills training and development, replacing out of date programmes and old technologies, regular monitoring of productivity and progress that can enhance digital skills and building a technologically equipped workforce.

Way Forward

While the expanding global digital economy provides many opportunities for enhanced growth prospects and improved livelihoods, continuous digital skill development for creating an agile and digitally equipped global workforce is the foremost priority of current times. Upskilling digital efforts, providing the adequate and critical technological infrastructure, and enabling technology upskilling programmes are critical imperatives in this regard.

At the same time, bridging the digital divide in the rapidly evolving dynamic work landscape through targeted interventions and investments in requisite digital skills is crucial, along with ensuring equal and affordable access to all. Addressing the digital divide across regions and across different groups, including the disadvantaged and increasing awareness on digital skills and their uses are also important steps for promoting global digital skills.

Enhanced collaboration and exchange of best practises and innovative ideas at the global level with all stakeholders can significantly contribute in promoting digital skills and literacy. Global dialogue on fostering digital inclusion through innovative skilling and capacity building programmes can help bridge the digital gap faster and in turn promote inclusive growth.