How skills-based workforce planning can support workers in developing countries
We’re currently in the middle of a pivotal moment in human history. The Fourth Industrial Revolution and emerging technologies like artificial intelligence are having a major impact on the global economy. In many ways, they're changing how it functions.
One of the biggest impact areas within economies is production or work. Current estimates by McKinsey say that by 2030, between 3 percent to 14 percent of the workforce will need to switch occupations and learn new skills. To put things into perspective, that's between 75 million and 375 million workers.
What is digital transformation?
Digital transformation refers to the development and adoption of digital tech in all areas of society. Going beyond mere tech adoption, it represents a major shift in culture and mindset. Crucially, it changes how organizations and the wider world operate.
How? We can use digital tools to improve our operations. These tools help us make data-driven decisions. They also allow us to create new business models and services.
One area where digital transformation is having a profound impact is the world of work. In just a few years, it has reinvented parts of the workforce by reshaping roles, skill requirements, and work dynamics. It's also changing demands across industries and occupations. Many occupations and skills are at risk of becoming irrelevant or obsolete but at the same time, new ones are emerging.
A global digital divide
Digital transformation is improving skills in many developed countries. However, it is having the opposite effect in developing nations. Emerging technologies are widening the gap, leaving poorer countries even further behind, as shown by the statistics.
In 2023, roughly 2.6 billion people—about one-third of the global population—remained offline. While more than 90 percent of people in high-income countries used the Internet in 2022, only 25 percent in low-income countries had access. This gap highlights a big problem. Developing countries may fall behind in technological advancements.
Location isn't solely responsible for driving the digital divide. Internet disparity includes gaps based on age, gender, and rural vs. urban populations. Estimates say 264 million fewer women are accessing the Internet compared to men, for example. Women are also 7 percent less likely to own a cell phone and 16 percent are less likely to use mobile Internet than men.
Access to the Internet is not the only barrier. Basic digital literacy training is another huge impact factor. This is critical for populations to be able to effectively use the Internet when they have access to it. Workforces in developing countries will struggle to do this without the prerequisite knowledge and skills.
Despite the digital divide, developing countries stand to gain the most—and lose the most—as digital transformation progresses. This is especially true in the area of agile workforce development. Here, the adoption of new technologies will significantly impact systems, processes, and the future of work in these economies.
As digital transformation continues, employers in developing economies will begin to realize that their old approaches to workforce development are becoming ineffective. This will require greater adoption of technology to address workforce challenges. Failing to do so could hinder economic growth and development.
The question is then, how can developing nations and their workforces manage and make use of digital transformation?
Addressing skills gaps in developing countries
The answer is by addressing skills gaps and building talent inventories.
Although workers in all countries risk becoming unemployable because they don’t possess the right skills, the problem is more profound in developing economies. Skills gaps can hold back economic and social development. This limits individuals' chances to find jobs and improve their lives. It also restricts the economy's ability to grow.
Nations should make it a global priority to ensure that digital transformation leaves no worker behind. You can achieve this by improving organizational skills. First, identify any skills gaps at both individual and organizational levels. Then, take steps to upskill and reskill employees to fill these gaps and build your talent and skills inventories.
However, understanding the current state of the labor market can be difficult. Traditional methods of labor market analysis rely on historical data. This data does not provide the real-time insights needed for operations today. Data quickly becomes obsolete as supply and demand movements are changing daily.
To overcome this challenge, organizations are turning to artificial intelligence to capture labor market movements in real-time. Quantum labor analysis is an emerging methodology that uses artificial intelligence to analyze labor markets in real-time at their most granular level—skills. Organizations can use this to see real-time data on skill gaps within labor markets by looking at the supply and demand of specific skills. This makes it easier to forecast future and emerging skills and place workers on sustainable career paths.
Both the public and private sectors have a stake in this issue. They both play an important role in helping workers gain the skills needed to succeed during digital changes. By identifying future skill requirements, we can guide workers toward career paths that align with upcoming needs. This is the type of proactive approach that's essential for ensuring that digital transformation is a success worldwide.
Making digital transformation a global success
Close the digital divide
Governments in some developing nations have made strides in digitizing public services. Sixty one percent of African nations now offer an average of 12 public services online. Unfortunately, citizens can't always access them.
According to the International Telecommunications Union (ITU), “vast swaths” of people currently lack access to the Internet. “While the number of Internet users surged from just a few million in the early 1990s to almost 5 billion today, 2.9 billion people remain totally offline,” says the ITU’s 2022 Global Connectivity Report.
At the same time, the faster digitization of public services may worsen existing inequalities. This goes against the UN’s Sustainable Development Goal (SDG) to reduce inequality within and among countries.
Research shows that when countries have high-speed Internet, jobs and incomes go up. Therefore, governments must work to close the digital divide. They can do this by investing in strong Internet infrastructure and digitizing public services. But this is just one piece of the puzzle-- skilled public and civil servants will also be needed to run these services
In developing markets, Internet access and digital skills are often limited. Any plan to digitize public services and improve Internet access must focus on building these skills. Among core digital capabilities, government departments will need in-depth knowledge about things like artificial intelligence, machine learning, cloud computing, and data technology.
Bridge skills gaps
Underemployment and unemployment are some of the biggest risks for developing nations. The coronavirus pandemic had a huge impact in Africa, and unemployment rates have continued to rise in the years since.
The problem is especially prevalent among Africa’s youth. 13 million young people in Africa are unemployed, and more than 72 million are not in education, training, or employment. Between 2012 and 2024, 11.2 percent of those aged 15 to 24 in Africa were unemployed. Tackling this will be essential if countries within Africa are to be in a position to make the most of digital transformation.
With that said, one of the most effective ways to boost economic development is through job creation. Cybersecurity, artificial intelligence, and cloud-based solutions are just a few examples of jobs with increasing demand. By investing in emerging industries and equipping workers with the skill sets needed for digital transformation, we can help improve underemployment and unemployment rates in developing regions.
Quantum labor analysis can help employers capture labor market movements at the workforce level. This enables a better understanding of the market as skills and job architectures change. For example, we have seen double-digit growth in digital literacy skills but a double-digit decline in traditional skills.
Policymakers can use these insights to build reskilling infrastructure to help workers take advantage of the opportunities the digital transformation provides. At an individual level, reskilling technologies can help workers identify hidden and adjacent skills and create targeted career and learning pathways.
Educate and re-skill the workforce
Digital transformation and innovation are radically changing the nature of work. New jobs are emerging, others are evolving, and some are ceasing to exist altogether. While innovation is reshaping the nature of work globally, developing countries are witnessing the emergence of new job roles that require digital skills and expertise that, as we’ve discussed, simply don’t exist.
Developing countries must prioritize investments in education systems that focus on STEM (Science, Technology, Engineering, and Mathematics) subjects. They should also focus on digital literacy programs, vocational training, and continuous learning opportunities. This approach will help bridge the digital skills gap and empower the workforce to effectively use digital tools. It will also help organizations build valuable skills inventories for meeting long-term goals.
Building strong partnerships between governments, educational institutions, and private sector stakeholders can create tailored training programs and certifications that meet industry needs. Education resources are more accessible than ever. Reskilling platforms can easily connect workers to relevant training and resources that align with their career goals. By predicting future skills, we can target skill gaps and maximize learning efficiency.
However, reskilling and upskilling are not one-time solutions. They require ongoing effort and constant adaptation to shifts in the labor market caused by digital transformation. Training programs must be flexible to meet changing demands. Agile, skills-based organizations must embrace a mindset of lifelong learning to ensure their workforce can adapt to evolving labor market conditions.
Promote the reallocation of labor
Some researchers believe that digital labor platforms can help reduce inequality and poverty in developing countries by creating income opportunities. However, many tasks—such as taxi services, domestic work, and deliveries—have always been part of traditional labor markets and continue to be performed there.
This means that workers mostly stay within the same sectors and do not significantly change industries. While some may move from rural to urban areas to work seasonally as taxi drivers or delivery workers through digital platforms, these shifts are usually temporary and not major changes in their careers. This pattern is not new; agricultural workers have long migrated to cities for low-skilled service jobs.
The digital economy has introduced a wider variety of microtask services, such as image and data annotation, labeling, categorization, and data processing. These tasks are repetitive and well-defined, allowing human workers to complete them quickly. As a result, many workers turn to online microtask platforms, creating new employment opportunities.
A survey by the ILO found that about 57 percent of microtask workers in developing countries have a STEM degree. Many of these workers have moved to urban areas in search of education and jobs. In reality, they often work on microtask platforms or call centers due to a lack of opportunity.
This suggests that instead of moving into high-skilled jobs, well-educated workers in developing economies are primarily stuck in low-skilled positions, like microtask work. This is in stark contrast to trends in developed countries, where educated workers typically enjoy better employment prospects.
To address this issue, developing nations need to create pathways for graduates to secure jobs that match their skills and allow for career advancement. This will ensure that efforts to develop skills and educate the workforce are effective and lead to meaningful employment.
A substantial opportunity for developing countries
Digital transformation offers significant opportunities for developing countries that are willing to cultivate agility within their workforces. Slow or poor adoption of digital technologies can worsen existing skills gaps, unemployment, and inequality.
Now is the time for these nations to implement measures that prepare their workforces for the future of work. Increasing digital adoption and usage, along with education and upskilling, will be essential for workers in these economies to seize the opportunities created by digital transformation.
By proactively addressing these risks using advanced reskilling and upskilling technologies, developing economies can empower their communities, improve livelihoods, and build competitive workforces in the global market.
