Human capital opportunity in today’s world
Today, we live in one of the most exciting times in history.
We are all experiencing change at a greater pace and of a greater magnitude than at any time before. During the Industrial Revolution we saw ‘muscle power being replaced by steam and electrical driven machine power’. This phenomenon generated high levels of productivity, high levels of economic growth but slowed jobs growth.
Today, we see a similar picture - brain power is being augmented by technology power - which is resulting in productivity growth, economic growth but slower jobs growth. We do, however, expect to see jobs growth over the next decade in new sectors that don’t exist today.
Over the last decade, technological change has accelerated even more with the advent of advanced data analytics, cloud computing and advanced manufacturing techniques. Machines are talking to machines continuously with an estimated 100 billion machines interconnected by the end of this decade.
While this new world is very exciting, it also gives rise to a set of Human Capital challenges which are not exactly new, but are exacerbated due to the rapid rate of change. Challenges such as:
- High long term unemployment, particularly youth unemployment.
- Jobless growth.
- Low participation rates, specifically female participation.
- Larger mismatches of labor supply and demand requiring the ability of skills and labor to move with greater freedom across borders.
- Rapidly changing skills requirements, making the skills of today, different from tomorrow.
These Human Capital challenges require all of us to work together, to take action together.
Business, government, educational institutions, labour organisations and community organisations all have a role to play in delivering practical, actionable and measureable solutions to assist economic growth and jobs growth.
We need solutions that maximise job creation, that build adaptable and resilient skill sets, that improve alignment of people, skills, jobs and locations; and solutions that increase organisation and workforce adaptability and flexibility.
For these solutions to become real, the Human Capital Taskforce has developed five recommendations.
The first is for governments to undertake structural reform to increase flexibility, adaptability and mobility within and across labour markets.
This recommendation is all about reform. Reforms that makes it easier for businesses to do business and employ people.
- Reforms that enable greater participation for groups such as women and youth.
- Reforms that promote flexibility and adaptability.
- Reforms that lower the cost and increase the speed of labour mobility.
- Reforms that remove red tape.
The second is to establish a national innovation agenda and pipeline of innovation priorities that defines and promotes a nation’s focus areas, underpinned by structural reforms that align investment and support for innovation.
Innovation is the critical engine for business growth and job creation. Encouraging G20 nations to establish an innovation agenda, with an accompanying pipeline of innovation priorities provides business with the confidence, clarity and consistency to make investment decisions in innovation.
The third is increasing the alignment and responsiveness between learning ecosystems and business and workforce needs.
Technology is not just disrupting the education model – it is also influencing the type of skills needed to be successful in the future.
We must be prepared for a working environment with continuous change, where prior experiences and qualifications may no longer be as relevant or as enduring. We must promote a culture of lifelong learning and career reinvention.
The learning ecosystem…that is our schools, our universities, our VET colleges… require greater alignment with industry and responsiveness to adapt to the inevitable change.
To improve alignment and responsiveness G20 nations can:
- Support efforts to align curricula with workforce and industry needs, utilising multiple learning pathways and models.
- Expand the emphasis on basic skills acquisition to include skills relevant to the digital age.
- Enable a flexible system of lifelong learning.
- Undertake efforts to reskill workers displaced as a result of fallen industries.
The fourth recommendation is to remove barriers inhibiting entrepreneurs from starting and growing businesses.
New businesses, account for more than 50% of new jobs, as such they are a primary driver of grass roots employment. We are calling on Governments to remove the regulatory burden for starting up businesses and to make is it easier to hire people.
The fifth and final recommendation is to monitor and measure the G20 nation’s commitments to Human Capital and Employment Actions.
We are calling on the G20 Governments to adopt these recommendations, to work with us all, to help create the environment that will deliver growth and jobs. Responsibility to do this does not solely rest with Governments alone. Nor is it business’ sole responsibility, it requires true collaboration between all parties.
We live in a dynamic world. Change is accelerating. We may see challenging times ahead, but if we are collaborative, adaptable and flexible - we can grow together.