human capital

Davos challenge: Fixing the worst unemployment crisis in decades

January 21, 2013
January 21, 2013

At the World Economic Forum 2012 annual meeting in Davos-Klosters, world leaders gathered to deliberate what the future might look like, to align stakeholders around that vision and to inspire the realization of that vision. One year later, integrating people, systems and technologies to that end remains an indisputable leadership challenge.

One such challenge-opportunity deadlock that desperately needs our most powerful ideas and collaborative spirit has been created by the worst unemployment crises we’ve seen in recent times. Even as the world moves towards recovery from a sluggish economy, rebuilding growth and a sustainable future, there are 200 million unemployed people worldwide, with 400 million new entrants needing to be absorbed into the global workforce over the coming decade.

A major contributor to this future are businesses whose biggest assets are people. And yet this very asset has led them to the center of a tug of war. Enterprises are having to strike a balance between downsizing human capital assets on the one hand and filling a serious shortage of right-skilled professionals on the other. Skill mismatches, impacts of globalization and technology-led transformation of industry structures and business models have exacerbated the situation.

There is no easy solution to a problem of such sweeping proportions, nor is there a single point of accountability. What’s needed is a shared vision and concerted effort by all stakeholders—government, academia, industry, and citizenry—at a local, national and global level as the need may be.

If I had to draw up the agenda, it would read somewhat like this:

  • Governments should make strategic investments in the basic educational infrastructure needed to produce high-skilled talent. Yet, funding is not everything. Countries such as Finland and South Korea, which have the best education systems among developed countries, have a culture of education, which accords teachers a higher social status. Also, a successful system must focus on imparting job skills in current demand, as well as plan for those that will be needed several years hence.
  • In tandem, industry must also work with academia to improve the employability of students. It must address the challenge of skill redundancy brought about by technology and productivity by investing in both right-skilling and reskilling talent.
  • There is a need for an international effort to truly leverage both mobile and virtual talent from geo-pockets of surplus for those in deficit.

I admit that the answers won’t always be apparent, but we need to put conventional considerations aside in favor of the larger goal of creating employment opportunities and economic growth engines for the citizens of the world.

A version of this piece ran on the World Economic Forum blog. We welcome your comments at ideas@qz.com.

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