A skills mismatch that affects 1.3 billion people worldwide is imposing a 6% annual tax on the global economy in the form of lost labour productivity.

Boston Consulting Group (BCG) explores this and other findings in its report titled ‘Fixing the Global Skills Mismatch’, which is being released recently.

According to the report, the skills mismatch is the key barrier to human capital development. Affecting two out of five employees in Organisation for Economic Co-operation and Development (OECD) countries, the skills mismatch is, for employers, essentially a hidden tax. And because uneven economic growth and global divisions of labour can lead to greater disparities among the world’s economies, the mismatch creates risks for governments.

The report points to the need for a more human-centric approach to education and employment that will treat an individual not just as an element of the workforce or a passive consumer of education and training services but as an equal partner in the creation of a future-ready society and economy.

“The system for building human capital needs to be updated,” says Dr Leila Hoteit, a BCG senior partner and coauthor of the report. “Not only does the future economy demand a human-centric approach, education systems need to adapt to new and more sophisticated market requirements.”

Skills are becoming obsolete at an increasingly fast rate—technical skills, for example, are outdated in two to five years, and it is expected that by 2022, 27% of available jobs will be in roles that do not yet exist—heightening the need for reskilling and upskilling.

To realize the full potential of human capital and fix the global skills mismatch will require the new approaches like embracing ongoing technological change, professional development and access to new opportunities.

Avoiding the productivity tax is not an issue that can be easily addressed:  only 28% of respondents to a BCG survey reported that they consider using self-service content for learning, and about 41% of job seekers find jobs through online platforms while 3 billion people lack access to the internet.

“Countries must rethink the way education and training are funded, designed, and delivered; change mindsets accordingly; and implement a more collaborative approach through which best practices can be shared and labor markets can become more open,” sums up Sergey Perapechka, a BCG partner and coauthor of the report.

Agencies