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Technical Skills development is at the center of changes happening

in education and labor markets amid the global mega trends, such as automation, action
against climate change, the digitalization of products and services, and a shrinking labor force,
which are changing the nature of work and skills demands. Consequently, skills and workforce
development systems must proactively adapt to fast transformations posed by automation,
climate action, digitalization, and the evolving labor markets.

These evolving trends will redefine the paradigms of education and workforce development
systems globally. In the dynamic landscape of the modern global labor market, education and
workforce development systems must become more personalized, accessible (allowing for
remote and hybrid learning), and continuous along throughout workers’ careers– placing “skills
development” at the heart of these global transitions. Moreover, skills systems globally (and
notably in LMICs) will need to adapt to the fact that many workers will engage in
freelancing/informal jobs or self-employment that need to become more profitable, productive,
and conducive for economic growth.

To succeed in the 21st century labor market, one needs a comprehensive skill set composed
of:

1. Foundational and higher order skills, which are cognitive skills that encompass the
ability to understand complex ideas, adapt effectively to the environment, learn from
experience, and reason. Foundational literacy and numeracy as well as problem-solving,
communication and informational analysis are cognitive skills.

2. Socio-emotional skills, which describe the ability to manage relationships, emotions,

and attitudes. These skills include being able to navigate interpersonal and social
situations effectively, as well as leadership, teamwork, self-control, and grit.

3. Specialized skills, which refer to the acquired knowledge, expertise, and interactions
needed to perform a specific task, including the mastery of required materials, tools, or
technologies. Specialized technical and cognitive skills as well as entrepreneurship skills
are included in this category.

4. Digital skills, which are cross-cutting and draw on all of the above skills, describe the
ability to access, manage, understand, integrate, communicate, evaluate, and create
information safely and appropriately.
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Skills are a cornerstone for the green-digital transition. The development of skills can
contribute to structural transformation and economic growth by enhancing employability and
labor productivity and helping countries to become more competitive.

Yet, skills gaps are a main constraint, especially in LMICs, to achieve jobs rich economic
growth for the digital and green transition. In this regard, most countries continue to struggle in
delivering on the promise of skills development:

 There are huge gaps in basic literacy and numeracy of working-age populations, as 750
million people aged 15+ (or 18 percent of the global population) report being unable to
read and write, with estimates being nearly twice as large if literacy is measured through
direct assessments. Large-scale international assessments of adult skills generally point
to skills mismatches as well as large variation in the returns to education across fields of
study, institutions, and population groups.

 Megatrends such as automation, action against climate change, the digitalization of

products and services, and a shrinking and aging labor force, will transform over 1.1
billion jobs in the next decade.

 About 450 million youth (7 out of 10) are economically disengaged, due to lack of
adequate skills to succeed in the labor market.

 Over 2.1 billion adults need remedial education for basic literacy, numeracy, and socio-
emotional skills.

 About 23 percent of firms cite workforce skills as a significant constraint to their

operations. In some African and Latin American countries, this share rises to 40–60
percent.

 Most African and most South Asian countries do not have data on workforce skills.

 The global economy could gain an estimated US$6.5 trillion in the next seven years by
closing workers' skills gaps, representing 5-6 percent of their GDP. Nonetheless, most
countries invest less than 0.5 percent of the global gross domestic product in adult
lifelong learning.

Moreover, the COVID-19 pandemic has brought the pre-crisis vision of equitable, relevant, and
quality skills development into sharper relief, adding unforeseen urgency to the calls for reform
and highlighting the huge costs of inaction. As a result of the pandemic, 220 million post-
secondary students (est.) dropped out of school or lost training opportunities.
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The key issues countries need to tackle for skills development are:

 Access and completion. Across the world, investments in education and skills
development—from preschool through post-secondary education to vocational training—
have high returns. The wage penalty for low literacy is nine percentage points in
Colombia, Georgia and Ukraine, and 19 percentage points in Ghana. And the opposite is
also true: in Brazil, graduates of vocational programs earn wages about 10 percent
higher than those with a general secondary school education. Still, provision of equitable
access is a challenge in many low-income and middle-income countries.

 Adaptability: The rapid pace of technological advancements and evolving labor markets
can make technical and specialized skills quickly outdated. On the contrary, transversal
skills, such as critical thinking, problem-solving, and adaptability, will become more
transferable and resilient to changes in the job market. Evidence shows that post-
secondary graduates who possess adequate occupation-specific technical skills but lack
strong foundational and transversal skills, often face challenges in adapting to work-
related changes.

 Quality. Many young people attend schools without acquiring basic literacy skills,
leaving them unable to compete in the job market. More than 80 percent of the entire
working age population in Ghana and more than 60 percent in Kenya cannot infer simple
information from relatively easy texts. For those who access technical and vocational
training at secondary and post-secondary levels, returns can vary substantially by
specialization and institution. In particular, technical and vocational training (TVET)
systems in many countries face challenges related to quality assurance, resulting in
perceptions of the vocational track being a second-best option compared to general
secondary or tertiary education.

 Relevance. Technical and vocational education and training —which can last anywhere
from six months to three years— can give young people, especially women, the skills to
compete for better paying jobs. Nevertheless, more needs to be done in terms of
engaging local employers to ensure that the curriculum and delivery of these programs
responds to labor market needs.

 Efficiency. Challenges related to governance, financing, and quality assurance also

impact the efficiency of skills development programs. The resulting unnecessarily high
costs can limit opportunities for disadvantaged youth and adults to access these
programs. The good news is that the evidence on what works and what does not in skills
development, and for whom, is growing. At the World Bank Group (WBG), we support
governments around the world in collecting data and designing, implementing, and
learning from reforms and programs aimed at addressing the most fundamental
challenges of skills development
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UNESCO connects education to the fast-evolving world of work through its promotion of skills
for work and life. Technical and vocational education and training (TVET) helps youth and adults
develop the abilities, knowledge, values and attitudes they need to find decent work and
contribute to building a peaceful, healthy, just and sustainable world. Worldwide 267 million
young people aged 15-24 are still not in any form of employment, education or training. TVET
contributes to the targets of Sustainable Development Goal 4 (SDG4) to 'ensure inclusive and
equitable quality education and promote lifelong learning opportunities for all’ and those of
SDG8 for 'decent work and economic growth'.

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