Closing the Jobs Gap | Opening remarks by President Tharman | World Economic Forum 2025

Global Jobs Gap: A Looming Crisis and Potential Solutions

Key Concepts: Global jobs gap, skills mismatch, informal economy, precarious work, AI disruption, lifelong learning, social compact, collective bargaining, economic graph, skills-based economy.

1. The Scale of the Global Jobs Challenge

• Main Point: The world faces a looming global crisis of jobs, with a significant gap between the number of people entering the workforce and the number of jobs being created.
• Details:
  • 1.2 billion people in the developing and emerging world will enter the workforce in the next 10 years.
  • Projections indicate only 400 million jobs will be created, leaving 800 million people underemployed or unemployed.
  • This crisis extends beyond economics, impacting social and political stability, hope, self-belief, dignity, and solidarity.
• Quote: "It's also not just a crisis of jobs we face but a crisis of social compact it's a crisis of Hope of self-belief and dignity and a crisis of solidarity" - President Tharman

2. A Comprehensive, Lifelong Approach to Human Potential Development

• Main Point: Addressing the jobs challenge requires a comprehensive, lifelong approach to developing human potential, starting early in life and continuing throughout one's career.
• Details:
  • Early Childhood: The first years of life are critical for developing human potential.
  • School Education: Public school systems are crucial for providing high-quality education on a broad base, preparing students for work and fulfillment. Countries with top PISA rankings are dominated by public school systems.
  • Continuous Investment: Investment in human potential must continue throughout life to address the skills mismatch.

3. Addressing the Skills Mismatch

• Main Point: A significant mismatch exists between the skills people possess and the skills employers need, leading to frustration and a sense of system failure.
• Details:
  • Over-Academization of Tertiary Education: Tertiary education systems have become overly academically oriented, neglecting technical skills.
  • Hierarchy of Skills: Academic skills are often ranked above technical skills, creating a disconnect between training and job market demands.
  • Corrective Measures: Reorient education systems to value technical and applied learning, ensuring they lead to excellence and expertise.
• Argument: Breadth and soft skills are not exclusive to traditional academic education; they can also be developed through technical and applied routes.

4. Navigating Disruption in the Workforce

• Main Point: Continuous investment in skills development is crucial to mitigate the disruptive impact of technology, particularly AI, on the workforce.
• Details:
  • AI Disruption: AI is a powerful driver of disruption, potentially displacing jobs.
  • Proactive Skills Development: Invest in skills development while people are still employed to increase the prospect of AI complementing human skills rather than replacing them.
  • Employee Expectations: Workers now prioritize training and retraining as much as good pay.
• Example: Singapore and Denmark are proactively investing in skills development due to their vulnerability to technological changes.

5. Regenerating Skills and Jobs for Displaced Workers

• Main Point: Deliberate efforts are needed to retrain and re-gear displaced workers to new employers and areas of demand, as the market alone cannot adequately address this issue.
• Details:
  • Creative Destruction: While essential for economic health, it often leads to dislocation in different locations.
  • Industrial Policy: Governments and businesses must work together to retrain displaced workers.
• Examples:
  • Coal workers in Saarland (Germany) retrained for the auto industry.
  • Coal workers in Korea gained skills for transmission and distribution in the power sector.
  • Coal workers in South Africa received various technical skills for new jobs.

6. Bridging the Gap Between the Informal and Formal Sectors

• Main Point: Efforts should focus on reducing the gap between the informal and formal sectors, improving conditions and opportunities for informal workers.
• Details:
  • Informal Sector Prevalence: 70-90% of workers in many developing countries are in the informal sector, lacking job security and opportunities for advancement.
  • Platform Workers: Implement measures like workplace injury compensation and mandatory social security contributions for gig workers.
  • Technology as an Enabler: Leverage technology to improve productivity and incomes in the informal sector.

7. The Role of Trade Unions and Collective Bargaining

• Main Point: Trade unions play a crucial role in addressing precarious work and promoting fair labor practices, but face challenges in organizing non-standard workers.
• Details:
  • Precarious Work: The rise of non-standard forms of employment (e.g., zero-hour contracts, platform work) poses a challenge to trade unions.
  • Misclassification: Workers are often misclassified as self-employed to avoid providing social protection and benefits.
  • Collective Bargaining: Strengthening collective bargaining is essential for improving working conditions and addressing inequalities.
• Argument: The growing gap between the rich and poor threatens democracy and fuels support for populist and extremist parties.

8. The ILO's Perspective on Job Creation and Quality

• Main Point: The ILO emphasizes the importance of aligning skills development with market demands and focusing on the quality of jobs created, not just the quantity.
• Details:
  • Skills Mismatch: Careful attention must be paid to the mismatch between skills developed and market needs, especially in low and middle-income countries.
  • Job Gap Composition: The 400 million job gap includes classic unemployment, discouraged workers, and those not actively seeking jobs.
  • Decent Work: The ILO advocates for decent work with social protection, as many workers currently lack any form of protection.
• Concern: The ILO is concerned that the digital and green transitions could exacerbate inequalities if skills are not adapted to future needs.

9. LinkedIn's Economic Graph and the Future of Skills

• Main Point: LinkedIn's economic graph provides valuable data on skills in demand and helps connect individuals with opportunities, but the pace of change requires continuous learning and adaptation.
• Details:
  • Economic Graph: A digital representation of the global workforce, including professionals, companies, and jobs.
  • Rapid Change: A significant percentage of jobs and skills have changed in recent years, driven by AI.
  • Human Skills: Human skills (communication, collaboration, empathy) are increasingly in demand alongside technical skills.
• Data: The percentage of LinkedIn members with AI skills has increased by 20x, and hiring for AI skills has increased by 300%.

10. Addressing Inequalities in Access to Upskilling

• Main Point: Inequalities exist in access to upskilling and reskilling opportunities, with higher-educated individuals having greater access than those with secondary education.
• Data: 65% of highly educated people have access to regular upskilling, compared to 40% of secondary-educated people.

11. The Role of AI in the Workforce

• Main Point: AI's impact on the workforce is uncertain, but it presents both opportunities and challenges.
• Optimistic View: AI can potentially help equalize opportunities by identifying intrinsic skills and removing biases in hiring.
• Cautious View: AI needs to be regulated, and its introduction in the workplace should be done in dialogue with workers to ensure positive outcomes.

Synthesis/Conclusion

The global jobs gap represents a significant challenge that requires a multi-faceted approach. This includes investing in lifelong learning, addressing the skills mismatch, supporting displaced workers, bridging the gap between the formal and informal sectors, and navigating the disruptive impact of technology, particularly AI. Collaboration between governments, businesses, trade unions, and educational institutions is essential to create a more equitable and sustainable future of work.