How iLearn! How iWork! – The Global Competition for TalentMike Hammer | Blended Workforce Solutions, SP3M Group
McKinsey forecasts 38 – 40 MILLION college grad short-fall by 2020
The labor pool skills gap increasing and shortfall of college grads has been water cooler conversation and book fodder for some time. A newly released study by McKinsey Global Institute suggests the shortfall of knowledge worker with college degrees worldwide is even greater than earlier projections. The shortfall of degreed workers needed to meet global demand will reach 13%. That translates to 38 to 40 million knowledge workers by 2020. How can this be?
For more than three decades, developing economies have been opening their markets after the end of the “Cold War”. As a result, the global labor market began to emerge with over a billion people made available as workers. The good news is this has lifted hundreds of millions of people out to poverty. To utilize this expanded labor market and to raise productivity in developed countries, investments in labor saving technology tapped those sources of low cost labor.
The cumulative effects, coupled with the global financial crisis, have uncovered a rapidly increasing gap in skills and knowledge while leveraging technology with fewer and fewer educated knowledge workers available. Add to this three years of higher education budget cuts, tuition costs doubling and poorer secondary preparation for college gives us a recipe for disaster.
The demand for highly skilled labor grows faster each day while supply continues its downward trend. Demand for low-skills gets weaker as automation, technology and cheaper skilled workers abroad now accelerates. That is projected to leaves 75 million people experiencing unemployment, underemployment and wage stagnation.
Based on current trends in population, education, and labor demand, the report projects that by 2020 the global economy could face the following hurdles:
- 38 million to 40 million fewer workers with tertiary education (college or postgraduate degrees) than employers will need, or 13 percent of the demand for such workers
- 45 million too few workers with secondary education in developing economies, or 15 percent of the demand for such workers
- 90 million to 95 million more low-skill workers (those without college training in advanced economies or without even secondary education in developing economies) than employers will need, or 11 percent oversupply of such workers
The dynamics of the global labor market will make these challenges even more difficult.
Here is the real threat to our way of life found in this report.
“While market forces will move to eliminate projected imbalances before their full impact are felt, they cannot be avoided entirely without a concerted, global effort by governments and businesses to raise educational attainment and provide job-specific training. Advanced economies will need to double the pace at which the number of young people earning college degrees is rising—and find ways to graduate more students in science, engineering, and other technical fields; these workers will be in high demand, and their contributions will be critical for meeting the rising productivity imperative. Secondary and vocational training must be revamped to retrain mid-career workers and to provide job-specific skills to students who will not continue on to college.
Even then, in the next two decades, the world is likely to have too many workers without the skills to land full-time employment. In both developing and advanced economies, policy makers will need to find ways not only to produce high-skilled workers but also to create more jobs for those who aren’t as highly educated.”
Let’s translate: If we don’t rise to the challenge as we did getting astronauts to the moon, or the effort to fix Y2K coded software before the clock hit 12:01, 2000; our economy and society will be up the proverbial creek without a paddle. Long term joblessness will make this Great Recession look like a blip.
Remedy actions required by 2020:
- Double the number of job ready college grads or post grads
- Increase share of those degrees in math and science by 30%
- Raise levels of H1a visas to immigrate highly skilled workers
- Get over gender and race bias. We need everyone working.
To accomplish these objectives, we will need solutions for these challenges:
- The campus experience as we’ve known it must change
- Blended learning delivery methods must be adopted widely
- Can we afford all the campus real estate?
- A more objective look at non-essential course requirements for business readiness.
- Stronger promotion and advocacy of math and sciences
Even if these are accomplished, with a global aging population living longer, it still may not be enough to fully close the skills gap by 2020 when high skills and productivity will be the driver of sustainable growth. The sooner we get a plan and collaboration to achieve a common objective moving forward the better. Every day wasted means that gap gets wider and the hill to success harder to climb.
Author Perspective: Business