Addressing the Global Digital Skills Gap

Global labor markets face massive skill gaps and labor shortages that continue to grow with the onset of technological change and digital adoption. Given existing disconnects among skills development, workforce programs and postsecondary credentialing initiatives, the skills gaps will continue to widen.

In their 2019 report “Automation and Artificial Intelligence: How machines are affecting people and places”, Brookings Institution researchers reported that automation and artificial intelligence (AI) will affect 61% of U.S. employment, with 88 million jobs facing medium to high exposure to automation the near future. The European Parliament, for its part, has commissioned numerous studies in recent years to identify specific measures that may address the future of work in Europe. One study called for the “urgent need for digital upskilling of workers in older age groups” to help address basic skill shortages within the labor market. To address these gaps, economies, such as the U.S.’s and the EU’s must aggressively adopt innovative practices and policies to better align education, training and postsecondary credentialing with impending economic and technological shifts. This essay focuses on recommendations for the U.S. to adopt such digital infrastructure policies and relevant government regulation, and for EU member states to mirror U.S. industry and employer engagement policies and practices that focus on technology and digital skills. Together, the transatlantic community should exchange ideas for innovative practices and policies to strengthen workforces through reskilling and improved credentialing.

COMMON GLOBAL CHALLENGES

Over the past decade, numerous U.S. public-private organizations have touted European vocational and education training models as the “gold standard” for workforce development and advocated for similar model designs at home. One such policy perspective highlighted by a globally recognized education research institute, the National Center on Education and the Economy found that 30% to 70% of students in upper secondary school in Austria, Denmark, Germany, Norway and Switzerland participate in dual vocational education and training (VET) that combines inschool and workplace learning. A common misperception in the U.S., however, is that most European countries operate VET optimally. In practice, however, many EU member states do not benefit from the VET models found in, for example, Germany and non-EU Switzerland. The models being facilitated in nonSwiss nation states rely on existing educational systems that do not transition well into VET secondary training models and would require massive system realignments to do such. Given these realities, it would be a fair viewpoint of many EU nations may be that the VET infrastructure of countries such as Switzerland and Germany are too far advanced in VET integration within the primary and secondary education system for other countries to be able to mirror and adopt their similarly successful systems. In many cases, European Union member states have developed and embraced an EUwide campaign to reskill their workforce and align training towards digital technologies, branded as the European Year of Skills (2023). Given this instance, the EU should look towards workforce training innovations across countries with comparable economies and similarly nascent VET systems in order to identify potential policy levers to adopt that may be viewed as more easily attainable.

OPPORTUNITIES - INDUSTRY ENGAGEMENT AND DIGITAL INFRASTRUCTURE POLICY

Key global opportunities have emerged from best practices for workforce training in the U.S. and in other countries. In the U.S., industry engagement within policy development and funding programs have supported the launch and scale of high-impact workforce training initiatives. There are longstanding programs such as regional workforce boards established by federal legislation that manage and facilitate industry involvement within their governance boards and periodic strategic planning. State and federal initiatives support the development of industry sector partnerships and industry-education cooperatives to boost re-skilling programs at state and regional levels. The U.S. by and large has delivered policies and programs that embed industry collaborations at high levels. Within EU member states, shared policy goals in Parliament have largely championed digital infrastructure policies to define, regulate and spur government innovation. Such programs include setting up a system for identification cards and establishing standards for recognition of postsecondary credentials.

GLOBAL TRENDS – IMPACTS OF TECHNOLOGY CHANGE ON LABOR MARKETS

EU member states such as Denmark, France, Spain and the Netherlands have also been the venues for industrial firmlevel studies on the effects of robotic automation. These studies have highlighted the tendency for technology adoption to increase productivity and expand employment, which have enabled robotics-adopting firms to gain a competitive market advantage over non-adopting firms. Economists, policymakers, industry leaders and other key public- and private-sector actors may have varying views of the magnitude and true effects on occupations of technology change and digital adoption, it is certain that all actors can agree that the future world of work will be marked by constant change and continuing advances in technology in the workplace.

INDUSTRIAL TECHNOLOGY ADOPTION LEADS TO REQUISITE DIGITAL AND TECHNOLOGY SKILLS MIX

With the rapid expansion of industrial automation, workers’ tasks and functions change just as quickly as the technology deployed. The Brookings Institution recently provided updated research on the impact on worker roles by analyzing the rapid “digitalization” of work that has occurred over the last decade. Brookings defines digitalization as “the infusion of digital skills (though not necessarily higher-end software coding) into the texture of almost every job in the economy”. Through analysis of unique occupational survey data available from the U.S. Department of Labor occupational information database, O*NET, the analysis showed that job requirements for relatively similar roles requiring a robust knowledge of computers and electronics rose from 9% of all U.S. occupations in 2002 to 26% in 2020. In short, one in four jobs now require high levels of digitalization.

PROMISING SOLUTION – DYNAMIC CREDENTIALING MODELS

In the past decade, a movement towards postsecondary credential transparency has taken place on a global scale, especially within European Union member states and the U.S. Credential Engine defines credential transparency as ensuring that “essential information about credentials—including their associated skills and competencies—are public, easily accessible, and actionable”. A global movement towards this transparency has taken place in the past decade, especially in the EU and the U.S. In France and Germany, a consortium is piloting a large-scale European Digital Identity Wallet that allows postsecondary credentials to be stored in an individual’s digital profile. The pilot is expected to launch in 2025 and will test the technical specifications required to scale digital wallets across the EU. Several EU member states, such as Denmark, Germany, Greece, Lithuania and Spain, are piloting the EU Digital Identity Wallet’s education certification programs, which provides “proof of possession for education credentials, such as diplomas, degrees, and certificates, making it easier to apply for jobs or further education”. The complete consortium related to digital credentials is titled “Digital Credentials for Europe” which involves 80 relevant institutions from 22 countries. In 2021, Spain launched CertiDigital, an inter-university project “aimed at creating a digital credential service for the Spanish University System” that includes pilot programs at more than 20 Spanish universities. One is related to “micro-credentials” and continuing education digital certificates of completion. Through the momentum in countries such as France and Spain, other EU member states are positioned to test and adopt bloc-wide digital credential systems once sufficient technical specifications are determined. The U.S. also has public-private entities that have championed credential transparency and digital portability, such as the nonprofit Credential Engine. U.S. state and federal governments can draw inspiration from EU Digital Wallet policy initiatives and learn from the EU directives that lead to implementation.

PROMISING SOLUTION – INDUSTRY AND GOVERNMENT PARTNERSHIPS

U.S. federal policies such as the Workforce Innovation and Opportunity Act (WIOA) require states and local workforce boards to engage in and/or develop industry partnerships. WIOA also authorizes the creation of American Job Centers, coordinated by the U.S. Department of Labor’s Employment and Training Administration. Through state and local workforce boards, industry partnerships are established and maintained in coordination with public governmental systems, nonprofit organizations, industry associations and other publicprivate entities. Examples of strong sectoral partnerships are often highlighted by leading national think tanks, such as the Aspen Institute, which has examined partnerships in Kentucky (KY FAME), the Wisconsin Regional Training Partnerships (WRTP) and several others. In 2012, Toyota Motor Manufacturing, Inc. (TMMI) – a Toyota Manufacturing facility in Princeton, IN that manufacturers Toyota vehicles such as the Grand Highlander, Sienna Hybrid and even the Lexus TX – outlined needs for employees with specific skills at the firm that employs approximately 7,500 workers, charged with vehicle production and assembly, as of May 2023, and for Indiana’s broader manufacturing workforce. The company developed an Advanced Manufacturing Technician (AMT) training program, which sources talent directly from K-12 schools and places students in a two-year USDOL Registered Apprenticeship programs where the students gain skills in electrical, mechanical, fluid power, fabrication, programmable logic control, and robotics competencies. Serving as an EU example of promising Industry-Government partnerships, the European Battery Alliance launched efforts to expand skills training in Critical Raw Materials Academies to equip the manufacturing workforce with the skills to produce key materials for the Electrical Vehicle industry.

TRANSATLANTIC INNOVATION EXCHANGES

EU and U.S. labor markets are experiencing similar shifts that require new methods for reskilling their workforces. Publicand private-sector leaders on both sides of the Atlantic would benefit from best-practice exchanges and the sharing of lessons learned from policy initiatives. EU member states are collectively taking innovative strides towards addressing digital infrastructure through policy directives and pilot programs such as the expansion of the European Digital Identity Wallet, while the U.S. continues to showcase itself as a global leader in forging industry-government partnerships to address workforce challenges. Ultimately, a mechanism for transatlantic peer exchanges would fuel innovation and ideas generation to benefit the world economy. Global networking entities such as the World Economic Forum could serve as forums to convene and catalyze such exchanges.

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