The arbitrage of skills for countries facing shortages

Globally, countries are facing skills shortages in different sectors that are impacting not just industry needs but economic growth as a result. Traditional education needs to move at lightning speed and have access to future skills data today to ensure tomorrow’s curriculum is relevant.

For example Germany's strong manufacturing sector and Industry 4.0 initiatives have led to a demand for digital skills, particularly in areas like industrial automation and IoT. Many European countries are grappling with green skills shortages, primarily driven by climate goals and the need to transition to renewable energy sources. Skilled professionals in fields like renewable energy technology, energy efficiency, and circular economy practices are in high demand. The UK is facing deep tech skills shortages in emerging fields such as data science, AI, and cybersecurity. The contributing factors being the rapid growth of the tech industry and the need for digital transformation across various sectors.

As a result national governments are investing in micro credentials to fill this gap where shortages exist. These courses are typically shorter in duration compared to traditional degree programs and are often offered by educational institutions, online learning platforms, or professional organisations. Typically developed with industry partners they can be an incredible resource for higher engagement to lifelong learning if served up and matched well to learners' needs.

However in this week’s Skills Newsletter we want to deep dive into the strategic leveraging of skill disparities to address shortages of specific skills within a country. It involves countries identifying the lack a sufficient talent pool and seeking to develop and acquire the needed skills.

The first key step is to understand the skills mobility referring to the skills supply and demand across geographies and industries to establish the gap that needs to be addressed. Many countries run annual industry surveys across multiple agencies and may compare to global job statistics but in today’s fast moving world greater real time insights are essential if we are to remain competitive.

Here are some of the steps that can be taken

1. National Skills Barometer which marries and visualises multiple skills data sets from macro to micro to showcase the skills strengths of a country and the needs for investments to address skills gaps. A public anonymised version can prompt industry to provide ongoing additional future skills data as they greatly benefit from seeing the skills supply across regions.
2. Education and Training Programs to meet Skills Needs: Governments, educational institutions, and private organisations can further invest in education and training programs with access to this real time skills data to develop the skills that are in high demand from the identified gaps.
3. Immigration and Talent Attraction: Countries can implement policies to attract skilled immigrants by streamlining visa processes, work permits, or other incentives to bring in talent from other countries.
4. Recognising and Authenticating Migrant Skills: Through the National Skills Passports, countries can uncover the skills of migrants already in the country by creating easy access to skills development that can be authenticated, recognised and easily discovered through inclusive skills matching with industry.
5. Skill Retraining: Encouraging individuals with existing skills to undergo retraining or up-skilling to meet the current demands of the labour market. Government-sponsored programs and subsidies can facilitate this process.
6. Remote and Regional Work:Embracing remote work can allow companies in skill-shortage countries to access talent outside of cities and suburbs. Again through a National Skills Passports, remote and rural dwellers that have high speed connectivity can for the first time access learning.
7. Public-Private Partnerships: Collaborations between government agencies, educational institutions, and private companies can help address skill shortages more effectively. These partnerships can identify critical skills and develop strategies to train and employ individuals in those fields.
8. Promoting Entrepreneurship and Innovation Hubs: Encouraging entrepreneurship can lead to the creation of new businesses that address skill shortages. Governments can provide incentives, such as grants, tax breaks, or startup support, to entrepreneurs willing to establish ventures in areas and regions with skill deficits.
9. Skills Transfer Programs: Facilitating the transfer of skills from experienced workers to younger generations can help bridge the gap. Mentorship programs and initiatives that encourage knowledge sharing can be valuable.
10. Flexible Work Arrangements: Offering flexible work arrangements, such as part-time, freelance, or contract work, can attract skilled professionals who may not be available for full-time positions. This can be especially appealing to retirees or individuals with other commitments.

In summary the continuous monitoring of the evolving job market and skill needs are essential. Skill shortages can change over time, and governments and organisations should be agile in adapting their strategies accordingly and have technology platforms that provide them with the skills, data and insights they need to know where to strategise and invest. This combination of strategic planning, education, immigration policies, and collaboration between the public and private sectors can be the Skills arbitrage to bridge the gap between skill supply and demand to stimulate economic growth and development.