Developing the skills for the 21st century jobs market

As mother-daughter duo Annie and Badjie Guerrero were developing Cravings*, their catering, hotel and restaurant conglomerate in the Philippines, they stumbled across a surprising obstacle to the growth of their business. Qualified cooks, it turned out, were in abundance. It was a far tougher task, however, to find employees equipped with the necessary customer service skills to make good waiters, receptionists and kitchen managers.

“New hires in management areas were really lacking in practical skills,” Badjie said. Many students lacked 'soft skills' like communication and attitude. The Guerreros solved the problem by founding their own vocational schools that taught students skills they wanted for their line of business. These Manila-based institutions have provided jobs-tailored courses for more than 24,000 locals, teaching skills like cost control, marketing and foreign languages, while developing in students a strong sense of social responsibility.

Few entrepreneurs are in a position to overcome skills shortages by founding their own schools. Even during periods of rapid economic growth and job creation in developing countries, many of these jobs remain unfilled, and identifying the right candidates becomes a true challenge amid high unemployment because education systems, including higher education institutions, are not keeping up with the needs of the job market.

In the current age of rapid technological change and where automation puts some workers at risk of being substituted by machines, these skills gaps will widen unless education systems and employers help students hone their ability to think critically, to solve complex problems, to interact with others, innovate, learn how to learn and to persevere and overcome failure. These are the skills that set these candidates apart, leading them to quality employment and shielding them from job losses triggered by computerisation.

High-skilled jobs

According to a recent McKinsey study, “as many as 45% of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies”. Automation-related job substitution can hit high-skilled sectors just as hard as low-skilled ones.

For example, law firms are starting to use ‘big data’ analytics to sift through millions of documents of past legal cases to find those most relevant to their pending case, reducing the need for clerks to pore over such documents. In the health sector, the IBM Watson computer can propose cancer treatments by crunching data on the patient’s symptoms, family and medical history with medical records of other cancer patients, limiting how much time a doctor spends on diagnostics.

Conversely, people who work in less structured environments, such as a nursing aide at an elderly person’s home, are less likely to lose their jobs to automation as a robot on wheels will have a harder time navigating a house than a human. However, that same robot could work just fine in a warehouse, loading and unloading pallets with merchandise.

History shows how a labour market’s needs constantly shift with technology – and in an unpredictable way. Skilled craftsmen of medieval times gave way to more unskilled labour in the industrial revolution and those jobs in turn got phased out by mechanised assembly lines.

What does the future hold? According to a recent Nesta study, creative-minded people, including artists, architects and web designers should be well-placed because they are “more future-proofed" to computerisation. But perhaps trying to guess what professions will be computer-proof in 10 or 20 years is the wrong approach. After all, research tells us that 65% of children entering primary school today will end up working in job types that don’t yet exist.

Skills-based education

A better idea would be for our education systems to find new ways to help develop cross-cutting skills like problem-solving, teamwork and leadership which have universal value – in short, a system that prioritises skills over credentials.

Transitioning to this will be hard for some. For instance, in many developing countries, rote learning and memorisation are firmly anchored in the culture and a college degree is seen as 'the Holy Grail', so adapting to a more trans-disciplinary, flexible, skills-based model will require conscious effort.

Universities also need to rethink their role in teaching the kinds of skills graduates need in the 'New Economy'. Furthermore, they must reconsider their approach towards working with partners, given the growing trend towards greater specialisation as a result of the unbundling of the education value chain and the decoupling of teaching and learning from the campus.

Going forward, universities might need to enter into strategic partnerships with corporate partners to better fulfil their mission. One example of this is the growing opportunity to expand into online education via partnerships with white-label providers like 2U or Hotchalk.

The good news is that over the past few years, innovative models have been springing up. For instance, the US, Saudi and Singapore-based Fullbridge is running short-term courses aimed at imbuing students with skills, attitudes, confidence and leadership by partnering with employers and government ministries.

There is Degreed, whose tagline is ‘jailbreak the degree’. Launched in 2012 and based in Salt Lake City and San Francisco, Degreed is a lifelong learning platform offering more than 225,000 courses. It has a points system that measures overall learning by factoring in articles, books, degrees, courses and videos.

And there is the Lagos-based Wave Academy, which focuses on quickly enhancing employability by teaching skills such as time-keeping, conflict resolution and team communication through lessons and role playing.

At our 7th Global Private Education Conference in Hong Kong from 26-27 April, the International Finance Corporation will shine a spotlight on this trend in its ‘Partnerships for a New Skills Agenda’ panel discussion. In a world where an average person can expect to have eight to 10 jobs per career, mastering cross-cutting skills will be an essential tool to staying employable.

Alejandro Caballero is a senior education specialist for the International Finance Corporation or IFC, the private sector arm of the World Bank, where he evaluates investments in private education companies. *Disclosure: The Cravings Group is a client of the IFC.