The World Economic Forum just published its Future of Jobs Report 2023. The 295-page report doesn’t have to be read cover-to-cover, particularly if you are only interested in global trends and specifically, what is predicted to happen in the United States and one or two other countries. I found the first 60 pages to be most informative as they include drivers of the labor market, jobs outlook, skills outlook, workforce strategies, and the Forum’s conclusion.
The report’s key findings are summarized below:
- Economic, health, and geopolitical trends have created divergent outcomes for labor markets globally in 2023.
- Technology adoption will remain a key driver of business transformation in the next five years.
- The largest job creation and destruction effects come from environmental, technology, and economic trends.
- Within technology adoption, big data, cloud computing, and AI feature highly on likelihood of adoption.
- The impact of most technologies on jobs is expected to be a net positive over the next five years.
- Employers expect a structural labor market churn of 23% of jobs in the next five years.
- The human-machine frontier has shifted, with businesses introducing automation into their operations at a slower pace than previously anticipated.
- The combination of macro trends and technology adoption will drive specific areas of job growth and decline.
- The fastest growing roles relative to their size today are driven by technology, digitalization, and sustainability.
- The fasted declining roles relative to their size today are driven by technology and digitalization.
- Large-scale job growth is expected in education, agriculture, digital commerce, and trade.
- The largest losses are expected in administrative roles and in traditional security, factory, and commerce roles.
- Analytical thinking and creative thinking remain the most important skills for workers in 2023.
- Employers estimate that 44% of workers’ skills will be disrupted in the next five years.
- Six in 10 workers will require training before 2027, but only half of workers are seen to have access to adequate training opportunities today.
- The skills that companies are reporting to be increasing in importance the fastest are not always reflected in corporate upskilling strategies.
- Respondents express confidence in developing their existing workforce, however, they are less optimistic regarding the outlook for talent availability in the next five years.
- Surveyed companies report that investing in learning and on-the-job training and automating processes are the most common workforce strategies which will be adopted to deliver their organization’s business goals.
- A majority of companies will prioritize women (79%), youth under 25 (68%), and those with disabilities (51%) as part of their DEI programs.
- Forty-five percent of businesses see funding for skills training as an effective intervention available to governments seeking to connect talent to employment.
The report’s introduction examines the global labor market landscape in 2023. The writers note that the “past three years have been shaped by a challenging combination of health, economic, and geopolitical volatility combined with growing social and environmental pressures. These accelerating transformations have and continue to reconfigure the world’s labor markets and shape the demand for jobs and skills of tomorrow, driving divergent economic trajectories within and across countries, in developing and developed economies alike.”
The economic and geopolitical crises of the past three years widened disparities between developed and emerging economies and among workers. Even as an increasing number of economies have recovered from the Covid-19 pandemic, low and lower-middle income countries continue to face elevated unemployment, while high-income countries are generally experiencing tight labor markets.
Approximately 75 percent of OECD countries have unemployment rates below pre-pandemic levels. At 4.9%, the OECD unemployment rate is at its lowest level since 2001. This contrasts with developing countries recovering slower from the pandemic. While advanced economies were able to provide financial support to their industries, the emerging economies provided less support due to their limited fiscal room to maneuver. In many countries, the increase in unemployment from 2019-2021 was twice as large for workers with a basic education as it was for workers with an advanced education.
The report discusses the 3,900 social-protection measures implemented across 223 economies from 2020-2022 to support the labor force impacted by Covid. While most of those measures have been phased out, the report states that there is an urgent need to provide adequate social protection to those not protected by full-time employment contracts. Nearly two billion workers globally are informally employed. This status ranges from 70% of workers in low-income and developing countries to 18% in high-income countries.
Inflation beginning in 2020 has impacted the most vulnerable workers the most. For the first time in 15 years, workers’ real wages have declined, by .9% in the first half of 2022. In line with inflation, purchasing power has declined for the most vulnerable given the weighting of energy and food in household expenditures in low-income and developing countries.
LinkedIn provided the report’s researchers with a list of the 100 fastest growing jobs globally. In the graphic below, those roles are organized into classifications. While not all these categories require an intensive knowledge of IT, many require an ability to utilize it to maximize workers’ effectiveness.
Over the next five years, expected drivers of the labor market transformation include technology adoption, macroeconomic and geopolitical outlook, the green transition, demographics, and consumer preferences. Specific trends ranked by share of organizations surveyed are included in Figure 2.1 below.
The same organizations were surveyed as to the macrotrends that are expected to have the greatest impact on jobs. These items are listed in Figure 2.2 below.
The organizations surveyed also indicated which specific technologies would be most likely adopted by their organization over the next five years. These are portrayed in Figure 2.4 below. While the list of these technologies is not surprising, what is surprising is that every item on the list in Figure 2.4 is cited by more than 50% of the organizations as being adopted over the next five years. These are not easily adopted technologies in most cases, particularly in large organizations. Notably, the second ranked technology at 81% is education and workforce technologies.
In an extensive list of technologies expected to be adopted, all but two (both in robotics) are expected to be net creators of jobs over the next five years. Figure 2.5 below provides a list of each technology as well as the expected impact on jobs.
The areas in which the largest number of jobs are expected to be generated are listed in Figure 3.4 below. Not surprisingly, the first four of these are all skill-related jobs that require more experience (and skills) and less education.
Naturally, the report lists the areas in which the largest number of jobs are expected to be lost. In Figure 3.5 below, these areas are listed in order of number of jobs projected to be lost. Automation is likely influencing almost all these areas.
Skills that are expected to be most in demand by organizations over the next five years are listed in Figure 4.3 and ranked from highest to lowest. Approximately two-thirds of these skills are skills that can be acquired from a traditional liberal arts education, something that college leaders should consider carefully.
Organizations also rated their priorities on reskilling and upskilling over the next five years. In Figure 4.5, these areas are ranked in frequency of selection. For those areas that were included in the 2020 WEF survey, the change in the ranking is listed as well. Notably, the biggest change increase is AI and Big Data closely followed by Environmental Stewardship. The biggest decline was Dependability and attention to detail.
The share of businesses planning to prioritize skills in AI and Big Data are pictured in Figure 4.7 below. Professionals in the industry sectors with the highest adoption rate who are unwilling or unable to be reskilled are likely to be displaced.
For those who have predicted the importance of a college degree will decline in the future, Figure 5.5 below indicates that completion of a university degree is considered by 45% of all organizations as very important, only falling behind evaluation of work experience (71%) and proprietary skill assessments (47%).
Organizations also identified public policies that should be prioritized to increase talent availability over the next five years. It is not surprising that funding for reskilling and upskilling is listed first at 45%. A little surprising is that childcare availability for working parents was only rated at 13.6%. Perhaps, that’s because organizations surveyed expect more employees to work from home. Regardless, it’s surprising.
Overall, I enjoyed reading the World Economic Forum’s Future of Jobs 2023 report. There’s a lot of information and data to absorb, especially as displayed by country and industry. The report confirms projected growth in jobs in AI and Big Data and declines in jobs that can be displaced by automation. For those of us involved with education and training, focusing on the future skills in demand as well as the roles that are expected to be reskilled or upskilled should be very useful for planning purposes.