On December 15, 2011, the Atlantic Council partnered with PwC to host an inaugural high-level roundtable of leading business, government, and academic experts to analyze the global mismatch between skills and jobs, better known as the “skills gap,” and offer policy solutions. This issue brief summarizes the conclusions of that discussion.
Despite an 8.3% unemployment rate, employers across the United States continue to have difficulty filling millions of available jobs. These jobs remain vacant because employers cannot find the qualified workers they need. President Obama’s CouncilonJobsandCompetitiveness blames this mismatch between the skills of the workforce and open jobs on up to one third of the current US unemployment rate.
Unfortunately, the current skills crisis marks only the beginning of a much longer-term trend. In addition to technical workers, the US education system will struggle to supply firms with the next generation of engineers and mathematicians. US Deputy Secretary of Education, Tony Miller, predicts the defense industry alone could lose up to 50% of its workforce to retirement in the next five to ten years. Companies will be forced to replace millions of baby boomers as they exit the workforce, and will struggle if their new hires cannot quickly learn the requisite skills to succeed.
It is important to note that the skills gap is not simply an American problem. In fact, according to PwC’s annual survey of global CEOs, an inability to find enough skilled talent is the number one concern of business executives around the world. In fact, only 30% of the respondents felt confident that they would be able to find the talent they need to grow their companies. Countries including Japan, China, India, and the United Kingdom face shortages of university graduates with the skills to succeed in many of the fields that will dominate the 21st century economy—especially science, technology, engineering, and math (STEM). Without significant investments to reorient university programs to promote STEM education, and increased funding for successful apprenticeship programs like those prevalent in Germany and Scandinavia, these countries risk falling further behind.
Closing the skills gap should remain a top priority for businesses, governments, and academia. Especially during times of extended long-term unemployment, significant investments in workforce development are critical to restarting economic growth and increasing worker productivity. At the same time, budgetary constraints at the national and local levels will force business to play a lead role. Since the private sector profits most directly from access to skilled labor, the onus is on businesses to work hand-in-hand with community colleges and universities to develop programs that teach the skills they are searching for. Investments in preparing today’s young workers to succeed in the modern economy will continue to pay dividends for years to come.
The Atlantic Council and PwC are committed to promoting effective policy development by engaging business, academia, and policymakers together to target the skills and talent mismatch.