Workforce training vital to prepare for future markets, say OECD

03 May 2019

Emerging technologies, globalisation and an ageing population are the key trends influencing our future workforce, underpinned by policies that support upskilling, says a new OECD report.
Georgina Hines

Digital industries are on the rise, while primary industries, such as mining and high-emissions industries in manufacturing are declining, say OECD in their annual Employment Outlook Report.

This decline, the report states, is partly driven by the transition to a low-carbon economy, which will create jobs in different industries. This, however, will require companies to retrain their workforce if they wish to become successful in future dominating industries.

The report also addresses concerns from the general workforce over job security and automation. ‘While it is true that workers are displaced by new technologies, there are various channels through which technology may actually boost employment and, historically, net changes in employment have been positive in the long run,’ OECD writes.

In fact, OECD research has found that 40% of jobs created between 2005 and 2016 were in digitally intensive sectors, and, despite widespread anxiety from the public around jobs and automation, only 14% of jobs are at risk from automation, while 32% of jobs could be radically transformed.

Although employment is rising in the majority of OECD countries, this is being driven by an increase in low-income workers, which, in turn, is leading to greater job instability. This can be solved, say OECD, by the upskilling of the current workforce to transition jobs from declining industries and regions towards new opportunities.

However, those who need training the most (i.e. those working in low-income roles) are far less likely to get the upskilling they need, with 60% of high-skill workers taking part in training compared to only 20% of low-skill workers.

OECD say that globalisation will have a significant impact on the way employers will train their workforce, as trade becomes more integrated. Exports have increased from 23% of GDP in 1975 to 43% in 2017 and 42% of business sector jobs in OECD countries in 2014 were sustained by consumers in foreign markets.

OECD therefore recommends that training is of sufficient quality to keep up with the trends in employment because of technological changes, efficient financial mechanisms to support said training is in place, and to set government arrangements so different training systems work cohesively.

‘Much can be done to enhance the effectiveness and targeting of key policies by undertaking a comprehensive spending review and deepening the whole-of-government approach to public policy objectives and solutions,’ says the report. ‘But there may also be a need to improve revenue sources and this requires a profound reflection on tax systems.’

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