Life long learning and the future of work
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Life long learning and the future of work JONATHAN WOETZEL June 2019 CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of Rated #1 Think Tank 2016 (private sector category) by McKinsey & Company is strictly prohibited the Global Think Tank Index, University of Pennsylvania
History shows that technology has created large employment and sector
shifts
Large-scale sector employment declines have been countered by growth of other
sectors that have absorbed workers
Share of total employment by sector in the United States, 1850–2015
100
Trade
(retail and wholesale)
90
Construction
80 Transportation
Agriculture
70 Manufacturing
Household work1
60 Mining
Professional services
50
Utilities
40 Business and
repair services
Telecommunications
30
Health care
20 Entertainment
Education
10 Government
Financial services
0
1850 1900 50 2000 15
1 Increase from 1850 to 1860 in employment share of household work primarily due to changes in how unpaid labor (slavery) was tracked.
NOTE: Numbers may not sum due to rounding.
SOURCE: IPUMS USA 2017; US Bureau of Labor Statistics; Groningen Growth and Development Centre 10-Sector Database; Moody’s; IMPLAN; US
Bureau of Labor Statistics; FRED; McKinsey Global Institute analysis McKinsey & Company 2
Technology drives the creation of many more jobs than it destroys over time,
mainly outside the industry itself
Example: Personal computers
Total US jobs created and destroyed by personal computers (examples listed are not comprehensive)
Thousand jobs
Indirect
Computer suppliers, 1970–2015
Managers 42
Semiconductor manufacturing occupations 31
Printed circuit assembly occupations 26
Typewriter indirect occupations -79
Direct Enabled
Computer equipment manufacturing, 1970–2015 Computer software and service industries, 1970–2015
Assorted managers and administrators 31 151 Software developers (software and apps) 768
524
Computer software developers
27 Computer scientists 686
(in-industry equipment)
2,904 Managers 416
Computer scientists 18
Office machine manufacturers - Jobs created: Typewriter repair -32
(typewriters) 61 19,263
Utilizers
Jobs destroyed:
Computer-utilizing industries, 1980–2015
3,508
Customer service reps 3,205
Net jobs:
Computer scientists
15,755 (not in computer industry)
1.873
~10% of 2015 civilian
labor force Stock and inventory clerks 1,517
Bookkeepers and auditing clerks -881
12,176
Secretaries -823
Typists -562
SOURCE: IPUMS; Moody’s; IMPLAN; US Bureau of Labor Statistics; FRED; McKinsey Global Institute analysis McKinsey & Company 3Globally, up to 375 million workers may need to switch occupational
categories
Number of workers needing to move out of current occupational Additional from earliest
adoption scenario
categories to find work, 2016–30 (trendline scenario)1 Midpoint automation scenario
Million (1 block = ~5 million) 2030 workforce
(% transitioning)
17–64
16–54 75–375
11–27
3–12
United States Japan Germany Other advanced
166 million 59 million 37 million 195 million
(up to 32%) (up to 46%) (up to 33%) (up to 33%)
12–102
10–72
3–38
1–7
Global
China India Mexico Other developing 2,661 million
757 million 612 million 68 million 767 million (up to 14%)
(up to 13%) (up to 6%) (up to 10%) (up to 9%)
1 Some occupational data projected into 2016 baseline from latest available 2014 data.
SOURCE: U.S. Bureau of Labor Statistics; McKinsey Global Institute analysis McKinsey & Company 4Potential shifts for activities, educational requirements, and wages
Net growth in work will involve more application of expertise, interaction, and management: Germany example
Total work hours by activity type, 2016–30 (Midpoint automation, step-up demand)
Million
Displaced hours Added hours Net change in hours
Applying expertise 569 2,293 1,724
Interacting with stakeholders 756 1,658 902
Managing and developing people 152 977 824
Unpredictable physical activities 1,054 1,198 144
Processing data 2,678 1,411 1,267
Collecting data 3,413 1,906 1,507
Predictable physical 3,097 1,521 1,576
NOTE: Some occupational data projected into 2016 baseline from latest available 2014 data.
SOURCE: ONET skill classification, US Bureau of Labor Statistics; McKinsey Global Institute analysis McKinsey & Company 5Unless displaced workers are reemployed quickly, medium-term
unemployment could rise
US unemployment rate
Baseline
Reemployment within 1 year
Low (25%)
Range of Medium (50%)
unemployment
scenarios, mid- High (66%)
point automation Full (100%)
adoption
2000 2016 2030
SOURCE: McKinsey Global Institute analysis McKinsey & Company 6A key element of a future skills framework is to create portable lifelong
credentials that students can acquire from multiple different sources
In-person or distance learning to
address specific knowledge gaps
Formal Structured courses offered by
education accredited higher education
institutions
Learning taking place
outside classroom
and institutional Learning without
setting (eg. online) curriculum or
Lifelong certifications
Courses may or may
not be structured and credentials Knowledge and ideas
Non- Informal
can be accredited acquired through social
formal education
education and professional
interactions (e.g.
conferences)
▪ Certificates and diplomas
Lifelong ▪ Digital badges (eg. Mozilla Open Badges)
credentials ▪ Digital CV (eg. LinkedIn profile)
▪ Digital graph to create “skills profile” from different sources
SOURCE: Press search, McKinsey analysis McKinsey & Company 7The UNESCO strategy formulates internationally applicable standards
and delivers initial approaches for actions
Objectives
▪ Promotion of ability to think critically among individuals
▪ Ability to deal with changes in the economy and working world
▪ Improved resilience, in particular among young and old sections of the population
▪ Additional international objectives, such as lifelong learning on education for peace and human rights
Activity 1 Policy
areas ▪ Recommendation for holistic and inclusive state polices
▪ Institutionalization: Inter-ministerial forums, and stakeholder participation
(recom-
mendations
▪ Political ecosystem: clarification and information, evident nature
to member 2 Governance
states) ▪ Multi-stakeholder approach and mechanisms at all state levels (e.g., federal, state, and municipal)
▪ Principles Effectiveness, transparency, accountabilities, as well as democratic and participatory nature
▪ Flexibility via decentralization
▪ Piloting via "learning cities, towns, and villages" (model locations for lifelong learning)
3 Financing
▪ Shared responsibility between the state, private sector, and individuals
▪ Prioritiy given to base competencies, such as adult literacy
▪ Recommendat. for instruments: Individual Learning Accounts (ILAs), support (e.g., coupons, vouchers),
and educat. leave
4 Participation, inclusion, and equality
▪ Creation of discrimination-free access, particularly for marginalized groups
▪ Institutional structures, such as municipal centers for lifelong learning
▪ High-quality informational and advisory-services offers
5 Quality
▪ Regular monitoring and evaluation (M&E)
▪ Offer spectrum: practical offers that address the needs of the employer; review of effectiveness and
efficiency
▪ Learning ecosystem: modern pedagogy and IT, secure learning facilities
▪ Accreditation and certification
SOURCE: UNESCO "Recommendation on Adult Learning and Education" (2015) McKinsey & Company 8In Denmark, the entire educational system is oriented around lifelong
learning
The excellence of the Danish
adult-education system Factors for excellence
▪ High overall levels of state Information ▪ Institutional offers for consultation: consultation in centers around
funding for education and transpar- the country, e-guidance (telephone, SMS, e-mail, chat, Facebook)
(3600 EUR per capita) ency for all citizens as well as dedicated research centers for lifelong
learning
▪ High level of participation
Learning ▪ National political strategy: "Lifelong Learning Strategy" since
with regard to offers for 2006
ecosystem
adult education in EU ▪ Structure of country-wide centers for lifelong learning since 2007:
comparison: a continuous
30% participation rate in
– Coordination of lifelong learning based on clear targets and
benchmarks on behalf of the ministry of education
Denmark among people
aged 25-64 years – Advising for companies and individual persons
– Providers must cooperate with the centers, in order to receive
state funds, which are increased when political aims are
▪ High quality of the adult- surpassed
education system
according to OECD Access ▪ Cultural anchoring: Grundtvig developed the concept of lifelong
comparison learning in Denmark in 1830
▪ Broad-based access (incl. catching up on education) and an
extensive offers ("basic skills" and "beyond basic skills")
▪ Flexibility: Courses are offered online, in the evening, and in blocks
Monitoring ▪ Quality of formal education (incl. university): once well educated,
one looks for further education
▪ Country-wide centers with a quality-assurance function
SOURCE: Adult Education Survey (2016); OECD Skills Matter: Further Results from the Survey of Adult Skills, (2016); UNESCO Institute for Statistics (2016) McKinsey & Company 9Furthermore, since 2015, Denmark has focused on on-the-job training –
with success
Continuing education programs
specifically for low-skilled Success factors in
Challenge individuals – examples: on- the-job training
Low-skilled workers 1 “Upgrading skills through System governance
often drop out of the employment” (all social partners,
lifelong learning system ▪ Job center: Subsidies to meaning employers,
▪ Low-skilled workers employers for improving skills unions, and state)
participate in continuing among employees
education programs only ▪ Employer must offer continuing
half as often as highly education programs that extend
skilled workers beyond normal standards
▪ Since 2015, there has ▪ Program for the unemployed Evidence-based
been a focus on the and individuals at risk for policy
integration of low- joblessness (e.g., subsidies and
skilled workers consultation/advising
2 “Adult apprenticeship scheme”
▪ At time of training, an adult aged have proven
at least 25 years: Subsidized particularly
salary payments effective)
SOURCE: Danish Agency for Labour Market and Recruitment (STAR), EU “Education and Training Monitor 2017 Denmark”, (2018); McKinsey interviews with
experts McKinsey & Company 10Singapore launched initiatives to upskill its citizens and
harmonize the skills framework
1 Enhanced internships 2 SKILLSFUTURE 3 Young talent programme
Earn and Learn Programme opportunities to gain overseas
65% of about 290 market expertise and become
polytechnic and ITE courses “globally ready”
offer greater emphasis on
Internships structured learning, experience
40
Total of
Over 500 Polytechnic and ITE
and mentorship in real work students received funding support to
programs
environments participate in overseas immersion
programmes
4 SKILLSFUTURE 5 SKILLSFUTURE
Mid-career enhanced subsidy Credit
Upskilling
>18,000
Up to 90% 9,000
About
Over 69,000
Utilized by over
SKILLSFUTURE
subsidies courses Singaporeans 126,000 credit-approved
Singaporeans courses available
6 Skills Framework
Integral part of industry transformation maps which guide enterprises and Singaporeans on key growth areas and skills
required for emerging jobs
NEW
Skills
Early childhood care and education Accountancy Logistics
framework
3 Hotel and accommodation services 7 Aerospace Retail
Precision engineering Electronics Sea transport
Framework Frameworks in
launched the pipeline Food services
McKinsey & Company 11Skillsfuture provides a comprehensive plan of offerings across the
lifelong learning learning cycle
Your skills. Your Asset. Your Future
EDUCATION AND CAREER SKILLSFUTURE EARN AND SKILLS-FOCUSED MODULAR SECTORAL MANPOWER PLANS
GUIDANCE (ECG) LEARN PROGRAMME COURSES Developing pipeline of skilled workers.
Counsellors to help students make well- Placement with structured on-the-job Wider range and scale of short skills- Progression and development
informed decisions on education, and institution-based training to give focused modular courses relevant to framework to provide every worker with
training and careers. fresh ITE and polytechnic graduates a industry needs. career pathways based on skills.
career headstart in sectors.
ENHANCE INTERNSHIP SKILLSFUTURE STUDY AWARDS SKILLSFUTURE LEADERSHIP
Structured programmes and enhanced SKILLSFUTURE CREDIT Monetary awards to help individuals DEVELOPMENT INITIATIVE
internships will better support career Learning credits for all Singaporeans develop and deepen their skills in growth Funding to support increased
exploration and workplace learning aged 25 years and above to pay for clusters. collaboration with companies to
course fees for work-skills-related develop and stretch high-potential
YOUNG TALENT PROGRAMME courses supported by public agencies INCREASED COURSE SUBSIDIES talent.
(YTP) All Singaporeans aged 40 years and
More market immersion opportunities for above to receive a minimum of 90% SKILLSFUTURE MENTORS
ITE, polytechnic and university students. course subsidy for MOE-funded and SMEs can access pool of mentors with
WDA-supported courses. deep industry skills and experience to
INDIVIDUAL LEARNING provide guidance in their
SKILLSFUTURE FELLOWSHIPS implementation of skills deepening
PORTFOLIO
Cash sponsorship for individuals initiatives.
An online, one-stop education. training
with deep skills expertise
and career guidance portal for every
to achieve mastery in SKILLSFUTURE CREDIT
Singaporean to plan their education,
respective fields. Regular top-ups in learning credits for
training and career path.
all Singaporeans to support skills
deepening.
In school Starting work Growing your career
Growing your
In school Starting work career
Students, parents & Individuals Employees Employers Government Education & Unions & Industry
teachers training institutions Associations
McKinsey & Company 12Similar initiatives exist also at city level: NYC launched the NYC
Tech Talent Pipeline in partnership with 150+ firms & 16 colleges
1 Population & Infrastructure 2 Size of Tech Labor market 3 Demand for Tech Talent
Annually
8.4 million 125+ academic 31,000 companies
residents institutions employ tech talent
291k jobs
Situation
Public school
Estimated 30.4%
$500 million growth in employment
network with over
public workforce
system 1.1 million $30 billion between 2012-2022
students wages
4 Out of Reach Jobs 5 Training Inadequacy
“Tech employers report a shortage in the number of qualified Companies report significant
homegrown candidates for in-demand roles” number of candidates from NYC-based education
and training institutions
Challenge Only2% aren’t prepared with full range of skills needed to
7% NYC possess in-demand effectively compete with
workers have skills employers candidates from other corners of the U.S. or across
tech skills seek the world.
6 THE NYC TECH TALENT PIPELINE (TTP)
Solution Identified five key competencies
Building a network Facilitated Industry
of over Define employment needs Review of Foundational Skills & Knowledge
Develop training and education Technical Skills: Role-Specific
solutions to meet the needs
150 Elucidate barriers to scale and
16 Technical Skills: Applied
sustainability Experience & Exposure
Companies NYC Colleges
Professional Skills & Interests
McKinsey & Company 13Typical dos and don'ts can be derived from experiences in other countries
(1/2 – "dos")
Learning effect from
Successful aspects Example "dos"
Holistic CPA account system for all service types Central administration of service
Transparent and
facilitates an overview and helps ensure service with good usability for citizens
easy to access
lapses
CPF continuing-education account accumulates Equal inclusion of all citizens,
Independent of
education/training time independent of employment independent of current life
employment status
status; account is retained until end of employment situation
Improved financial planability for employee
dismissals via "Abfertigung neu" (new severance Thinking about employers'
Plannable for pay scheme) needs, in order to win over
employers In cases where multiple months of educational leave employers as important
are taken, employers can postpone up to 9months partners
Simple application ILA with very high usage figures via low levels of Avoidance of complex application
process regulation and simple application process systems for easier accessibility
The MySkillsFuture Web site reaches 1.9 million Strong advertising and
visits in 2017 (among 3.4 million 25-64-year-olds); consultation is at least as
Advertising
advertising campaign appeals directly to consumers important as the program itself
with the slogan, "The most important update is you"
SOURCE: "Personal employment account: Internationale Modelle und Erfahrungen (International Models and Experiences)," Institute of Labor Economics,
(2017) McKinsey & Company 14Typical dos and don'ts can be derived from experiences in other countries
(2/2 – "don'ts")
Learning effect from
Points of criticism Example "don'ts"
150-400 hours across a lifespan are not adequate Thinking through exactly what
Undersizing
for balancing out critical capability deficits scope creates value
High level of Many accounts that cannot be merged together Avoidance of complex systems
complexity with a variety of components
Little variety in Offers for continuing education are heavily Broad positioning of the offer for a
offers segmented, bureaucratic and inflexible variety of needs
Initiative not not carried by tariff partners or Thinking about employers' needs,
Integration
employers in order to win over employers as
ecosystem
important partners
"Abfertigung neu" did not generate greater mobility Meas. of effects and readjustment
Comparison of
among workers, although this was the declared aim in the event that there is no
objective and effect
impact
"Career development" created the "wrong" Thinking about citizens' intrinsic
Wrong motivation motivation of saving for early retirement vs. a hiatus fears and motivations
from work
Optimized use via users with a high level of Strong promotion and
Unwanted
education, a lack of consultation for engaging consultation is at least as
distribution effect
weaker users important as the program itself
ILA budget estimated at GBP 97 million (approx. 1/3) Safeguarding of system against
Abuse misused (by dummy corporations among, other abuse
things)
SOURCE: "Persönliches Erwerbstätigenkonto: Internationale Modelle und Erfahrungen (Personal Employment Account: International Models and
Experiences)," Institute of Labor Economics, (2017) McKinsey & Company 15Life long learning and the future of work JONATHAN WOETZEL June 2019 CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of Rated #1 Think Tank 2016 (private sector category) by McKinsey & Company is strictly prohibited the Global Think Tank Index, University of Pennsylvania
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