Global Commission on

THE FUTURE OF WORK

8
issue brief
Prepared for the
2nd Meeting of the Global Commission on the Future of Work
15–17 February 2018 #
Cluster 4: Managing change during every phase of education

Skills policies
and systems for
a future workforce
The establishment of the Global Commission on the Future of Work in August 2017
marked the start of the second phase of ILO’s Future of Work Centenary initiative.
The six thematic clusters provide a basis for further deliberations of the Global
Commission. They focus on the main issues that need to be considered if the
future of work is to be one that provides security, equality and prosperity. A series
of Issue Briefs are prepared under each of the proposed clusters. These are intended
to stimulate discussion on a select number of issues under the different themes.
The thematic clusters are not necessarily related to the structure of the final report.
 List of Issue Briefs

Cluster 1: The role of work for individuals and society

#1. Individuals, work and society

#2. Addressing the situation and aspirations of youth

Cluster 2: B
 ringing an end to pervasive global women’s inequality in the workplace

#3. Addressing care for inclusive labour markets and gender equality
#4. Empowering women working in the informal economy

Cluster 3: T
 echnology for social, environmental and economic development

#5. Job quality in the platform economy

#6. The impact of technology on the quality and quantity of jobs

Cluster 4: Managing change during every phase of education

#7. Managing transitions over the life cycle

#8. Skills policies and systems for a future workforce

Cluster 5: New approaches to growth and development

#9. New business models for inclusive growth

#10. Global value chains for an inclusive and sustainable future

Cluster 6: The future governance of work

#11. New directions for the governance of work

#12. Innovative approaches for ensuring universal social protection
for the future of work
Introduction
Alongside other determining factors, technological, climate and demographic change
are thought to have profound and diverse impacts on the demand for skills (see Issue
Briefs Nos 2, 6 and 10). The future of work will require a twofold adjustment of the skills
development systems. First, these systems will need to deliver the foundational skills
that allow people to embrace changing technological opportunities. And second, they
will need to facilitate dynamic learning over the life cycle to ensure that people keep
pace with digitalization and other factors of change.

This Issue Brief provides an overview of skills requirements for the future of work
and considers how skills development systems might be transformed to meet these
needs. It also raises questions about the financing of lifelong learning, as well as about
the respective responsibilities of governments, enterprises and workers.

Key findings
What skills will the future of work require?
Technological change will affect both the composition of tasks (see Issue Brief No. 6)
and the demand for skills (Arntz, Gregory and Zierahn, 2016; Autor and Handel, 2013).
It is likely to have effects across all levels of skills and education (MGI, 2017; Freeman,
2014). Automation and robotization will increase the demand for technical skills that
can facilitate problem-solving and innovation, particularly in occupations related
to science, technology, engineering and mathematics (STEM). In addition to technical
skills, specific vocational skills will be required to deploy, operate and maintain new
technologies. In order to facilitate resilience to change and the adaptive capacity
to continually improve skills over the life cycle, these cognitive skills will need to be
complemented by a range of non-cognitive social and behavioural skills, which are often
acquired in early childhood and at school (MGI, 2017). The appropriate combination
of these technical, vocational and core work skills will be rewarded at a premium and will
provide workers with sound future employment prospects, as they will be able to move
easily between jobs, occupations and sectors. These trends are likely to exacerbate
the disadvantages that low-skilled workers currently face on the labour market.

The transition towards an environmentally sustainable economy will generate new

occupations, cause some job losses, and alter the skills composition of most jobs.
Skills development strategies will need to both support displaced workers and facilitate
the greening of the economy. New job opportunities in the “green economy” will emerge
in the areas of renewable energy, energy efficiency, recycling, repair and remanufacturing
(ILO, forthcoming (a)). These will require upgrading and making adjustments to existing
competencies (for example, by adding training components on green technical solutions
and environmental awareness to the curricula of architects, plumbers or electricians),
as well as increasing specialization in certain technical skills (for example, STEM
skills required for water and waste treatment). Green jobs will also require new skills

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 for occupations and sectors emerging in the green economy. Targeted training will allow
workers to take advantage of these newly emerging green jobs (Strietska-Ilina et al.,
2011). Raising awareness about the need for environmental sustainability must become
an integral part of education and training systems in order to pave the way for the
acquisition of new skills.

Demographic change is likely to affect the skills requirements of the ageing labour
force, as well as the skills needed to face the growing demand for caring professions
(see Issue Brief No. 2). The workforce will be obliged to constantly upgrade its digital
and technology-related skills to be able to remain longer in the labour market. At the
same time, new opportunities for care work (see Issue Brief No. 3) will increase the
demand for skills such as nursing and elderly care, as well as the accompanying soft
skills such as communication and empathic listening. Other countries, especially
emerging and developing countries, are facing the opposing trend of having an increased
number of young people entering the labour market (see Issue Brief No. 2). Given that
these highly competitive labour markets have a large number of equally qualified job
applicants, soft (in particular interpersonal) skills might even become a decisive factor
in an employer’s decision to select a specific candidate.

These demographic trends will be accompanied by other changes in labour markets,

affecting both the demand for and supply of skills. Between 2010 and 2030, 60 per cent
of the increase in the global workforce will occur in developing countries, in particular,
Africa and southern Asia – regions where educational attainment is lagging behind
(MGI, 2015). In sub-Saharan Africa and South Asia, these demographic changes,
combined with unequal access to education, are causing a skills mismatch with
a surplus of low-skilled workers and a shortage of medium-skilled workers (MGI, 2015).
At the same time, there is an increasing demand for high-skilled workers in developed
countries, leading to emigration from and causing a brain drain in developing countries.
The difficulties of finding a job in developing countries are likely to increase the pressure
to migrate in search of work (see Issue Brief No. 2).

What does this mean for skills development strategies

and education systems?
Given the constant and accelerating pace of change, skills development strategies
will be obliged to ensure the continual renewal of skills over the life cycle. This will
require focusing on ways to manage the different transitions that individuals will face
(for example, moving from the informal to the formal economy or from the manufacturing
to the services sector), so that they successfully enter the labour market (i.e. the school-
to-work transition) and interrupt, reskill and re-engage in employment throughout their
careers (see Issue Brief No. 7). The role of basic education in providing the foundational
skills needed for dynamic further learning will remain important. This life-cycle approach
raises fundamental questions about the respective responsibilities of governments,
workers and enterprises in making choices about when and how to reskill and retrain.
Moreover, it requires a solid financing concept – and in particular a decision about
the sources of the necessary funding. In this context, it is equally relevant to consider
the appropriate mix of public and private investment in all phases of delivery.

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Basic education remains the foundation for future employability
and further learning
Ensuring inclusive and quality education for all, as outlined in Goal 4 of the 2030
Agenda for Sustainable Development, as well as early childhood pre-school education
and universal compulsory education, lays the foundation for lifelong learning, social
mobility and social inclusiveness. Participation in education and levels of educational
attainment have been rising globally, resulting in higher literacy levels and a better-
educated workforce. Young people tend to stay longer in initial education. Mean years
of schooling have doubled since the early 1980s (UNESCO, 2015), and projections
show that the number of people achieving secondary education or higher will increase
tenfold by 2100 (Roser and Ortiz-Ospina, 2017). However, low-income economies
are still lagging behind, as they continue to face challenges regarding access to and
dropout from basic education. The average length of schooling in developing countries,
for instance, is only around 7.2 years, compared to 11.3 years in advanced countries
(Barro and Lee, 2013). Although gender inequality in education declined considerably
over the past decades, the ratio of female to male average length of schooling is still
significantly lower in developing countries (85.9 per cent) than in advanced countries
(97.8 per cent). Unless these economies make strides in access to universal basic
education as well as improve its quality for both women and men, sustainable
development will remain out of reach.

Facilitating the school-to-work transition

Having a solid qualification substantially enhances the employability of young people.
However, to adjust to changing labour market demands, it will be necessary to strengthen
the relevance of technical and vocational education and training (TVET), for instance
by broadening the qualification profiles and integrating core work skills into the curricula.
Such measures will not only improve the employability of youth (see Issue Brief No. 2),
but also increase the potential for further upgrading initial qualifications.

Employers have a key role to play in workplace learning and Quality Apprenticeship
training. On-the-job training and experience can help ensure that young people are
equipped with the relevant skills and that they are exposed to the use of new technologies
(ILO, 2017b). Employers need to be engaged more actively in the provision of training,
especially in TVET. Tripartite sectoral skills bodies provide important opportunities
for facilitating the school-to-work transition, as well as the delivery of relevant training
to the current and future workforce.

Dual apprenticeship systems are another tried and tested way of enabling young people
to make the transition from the world of education to the world of work. They play
a key role in enhancing youth employability by helping young people acquire the relevant
skills while simultaneously having the opportunity to gain work experience and start the
process of building a career. The set-up and adjustment of such systems will continue
to require effort on the part of governments, employers’ associations, trade unions and
training providers (ILO, 2017b).

As mentioned above, digital technologies not only change the characteristics of jobs but
can also facilitate the access to skills and learning opportunities. For instance, Massive
Open Online Courses (MOOCs) and training video resources appear to be well suited
to respond to the need of renewing competencies by overcoming time and resource
constraints and opening up access to training, including for people in remote areas and
people with disabilities. To reach the full potential of e-learning opportunities, access to
online courses should be accompanied by certification and linking to other types of training.

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 The future of work will require lifelong learning and agile,
flexible training systems
The frontloading of skills through initial training for a single lifetime qualification will
no longer be sufficient or effective. Training systems of the future must be flexible
and prepare the workforce to continue learning over the life cycle. They will need
to be closely aligned with the labour market in order to forecast future skills demands
– including those required by emerging occupations – and to match them with current
skills development and training opportunities. Employment services will be obliged
to collaborate with employers to provide effective assistance to workers, matching skills
and jobs and facilitating job-specific (re)training.

The concept of lifelong learning developed in the 1970s, having originated in the
context of the transition to the knowledge economy. At first, flexible modular training
programmes, combined with the recognition of training credits, were considered
to be an optimal solution. This approach gave way to an even more flexible system
of learning outcomes, which defines results (e.g. competency standards) rather than
inputs. However, this approach has suffered from lengthy standards elaboration
and accreditation procedures, as well as complex quality assurance systems. Striking
the balance between flexible training offers and systematic quality assurance with
accreditation and testing mechanisms can be a challenge. Meeting this challenge will be
even more crucial for a future of work that demands agile and flexible training systems.

The ability to take advantage of the opportunities presented in the future world
of work will be contingent upon the effective design of these lifelong learning systems.
Governments might consider taking the lead in designing modern lifelong learning
systems in close consultation with workers and employers – the actors and key
beneficiaries of the system.

Need for increased and diversified funding of lifelong learning

At a time when millions of individuals require new skills to earn a living, there are
worrying signs of possible cuts in public spending on workforce training programmes
(for the OECD countries, see OECD (2018) and MGI (2017)). Governments play a central
part in financing active labour market policies and providing basic skills through initial
education. Their role will need to become more pronounced in the context of lifelong
learning. At a time when employer–employee contractual relations are evolving and
diversifying, and job tenures tend to be shorter, individuals may need additional support
to be able to engage in learning. Public funding can support and incentivize access
to learning opportunities, through such vehicles as voucher financing models,
entitlements, skills guarantees, individual learning accounts, subsidies, grants, credits
and tax breaks. However, scarcity of public resources, especially in developing countries,
calls for a diversification of funding sources and continued support through development
cooperation. Mechanisms that require employers to contribute to workforce training,
such as sectoral levies or national tax breaks, are possible channels for engaging
the private sector in training provision and participation.

Persons on study leave to upgrade their skills, or workers who are temporarily unemployed
and in transition from one job to another, will continue to require financial support
(WEF and BCG, 2018). A combination of retraining with passive labour market measures
may help to ensure income security for individuals during these periods (see Issue Brief
No. 7). Easing the burden on public funding can be achieved by striking a better balance
between public and private responsibility for financing training (see Issue Brief No. 9).

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 Better utilization and recognition of skills for inclusive labour markets
The effective utilization of skills requires well-functioning and accessible systems
of recognition of skills, as well as prior learning at national, sectoral and workplace levels.
Skills strategies that take account of the private sector’s need to remain competitive
are likely to garner stronger support from enterprises. National and sectoral tripartite
social dialogue on skills policies can be an important way to develop and improve
policies, and to enhance their take-up.

Migrant workers find it extremely difficult to have their skills and experience recognized
(ILO, 2017a), which results in a significant level of skills-related underemployment
and a loss of economic benefits for these workers. A growing emphasis on the validation
and recognition of skills has led to an expansion of bilateral and regional mutual
recognition arrangements, which are based on learning outcomes and often linked
to national and regional qualification frameworks.

Some considerations
As the pace of change accelerates, the capacity of systems to anticipate future skills
needs – locally as well as globally – will be placed under considerable pressure, requiring
innovative solutions (ILO, 2015b). Skills development can be an important enabler
of transition and can help to reduce social costs. Lifelong learning has emerged as an
important concept for developing approaches to educational and skills development
systems throughout the life cycle. Yet key questions remain about design and delivery.

• How do education and training systems need to be transformed to equip the workforce
with the skills and competencies required in the future?
• How do we design and finance lifelong learning systems? What are the respective roles
of governments and the social partners?
• How can governments overcome the challenge to increase public expenditure against
a background of scarce resources, in particular in developing countries?
• What incentives might be used to encourage the provision of and participation
in training opportunities – and who should pay for them?
• What policy measures are needed to enhance links between training institutions
and enterprises?
• How do we strike a balance between ensuring quality of training and meeting
the demand for more flexible and shorter learning pathways?
• What role can international labour standards play in shaping policies for lifelong
learning?

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