Global skills mismatch augurs big strains, says McKinsey
LONDON, June 14 — Rich and poor countries alike must overhaul how they provide education and training or struggle for years with a toxic mix of persistent unemployment for the low-skilled and shortages of high-skill workers, the McKinsey Global Institute said today.
Without prompt action, by 2020 there could be 85 million too few people with high and medium skills but 90 million too many low-skilled workers, MGI said in a report.
“Slower growth, rising income polarisation, growing pools of unemployed or under-employed workers, and soaring social costs are real possibilities,” MGI, the research arm of consultancy McKinsey & Co, said.
Indeed, strains from global labour mismatches are already apparent, reflected not just in widening income inequality but also in rising youth unemployment.
MGI said advanced economies need to double the rate at which the number of college graduates is rising and get more youngsters to study science, engineering and other technical subjects needed by knowledge-based industries.
Without rapid expansion in these sectors, such as advanced manufacturing, health care and business services, rich economies with shrinking workforces will not be able to generate the productivity improvements needed to sustain economic growth, MGI warned. The scale of the task is huge. Southern Europe would need to double its 0.7 per cent annual productivity growth of the past 20 years or see GDP growth per head decline; the “aging advanced” group of countries would need to increase its historical productivity growth by about 60 per cent, to 1.9 per cent a year.
As part of the solution, businesses will also need to retain more women and older workers and get more deeply involved in shaping public education and training, MGI said.
Ways will also have to be found to create jobs for those without higher education. One possibility is to turn household work into an organised industry in the formal economy by employing lower-skilled workers for child care and household chores now done off the books.
“Germany and Sweden have proved this can work, if the proper incentives and supports are in place,” the report said.
MGI stressed that the shortage of skilled workers is not a problem restricted to rich countries.
China, for example, will become the largest supplier of college-educated workers to the global labour force. This would be potentially even more important than its current role as the leading source of low-cost labour.
At the other end of the spectrum, the world is likely to have as many as one billion workers without even secondary education, concentrated in India, South Asia and Africa. — Reuters