The aim of this study is to examine whether there is a relationship between the type of product strategy adopted by an employer and the extent of the skills they require, and the skills challenges they face. It uses data from the Employer Skills Surveys carried out in England in 2001 and 2009 to examine the nature of the relationships, and also investigate the extent to which patterns available in 2001 were still present in 2009. It builds on previous analysis carried out by Mason (2004) on the 2001 Employer Skills Survey. This report provides evidence that establishments pursuing high value-added product market strategies are more likely to have higher workforce skill levels than their counterparts with medium or lower value-added product market strategies. In addition, these establishments are more likely to be actively looking to update the skill levels of their staff and less likely to have skill gaps, perhaps as a result of their pre-emptive action to address problems before they arise. The relationships identified are interdependent. This reinforces the message in literature on resource and knowledge-based theories of the firm, which suggests that business strategies and firm-level resources tend to evolve together over time.

This study, using original survey data of 10,000 individuals, analyzes the possible impacts of artificial intelligence (AI) and robotics on employment. The first interest of this study is to ascertain, from the viewpoint of workers, what types of worker characteristics are associated with the perception of risk of jobs being replaced by the development of AI and robotics. The second interest is to identify, from the viewpoint of consumers, what types of services are likely to be replaced by AI and robotics. The results suggest that malleable/adaptable high skills acquired through higher education, particularly in science and engineering, are complementary with new technologies such as AI and robotics. At the same time, occupation-specific skills acquired by attending professional schools or holding occupational licenses, particularly those related to human-intensive services, are less likely to be replaced by AI and robotics.

The OECD Survey of Adult Skills is the jewel in the crown of its Programme for the International Assessment of Adult Competencies (PIAAC). This paper argues that the findings and policy lessons from the project to date justify the high hopes which were placed in PIAAC when detailed planning for the project began in 2003. First, it presents a brief recap of PIAAC and its two predecessor international skills surveys. Second, it outlines the main themes which have been investigated to date using data from PIAAC. Third, the main findings and policy lessons drawn from PIAAC are highlighted. Finally, looking forward to the second cycle of PIAAC, for which planning is now underway, the paper suggests some priority areas for improvements to the survey design in order to add to its analytical usefulness and enhance its utility to policy makers.

Digital capabilities, adoption, and usage are evolving at a supercharged pace. While most users scramble just to keep up with the relentless rate of innovation, the sectors, companies, and individuals on the digital frontier continue to push the boundaries of technology use—and to capture disproportionate gains as a result. The pronounced gap between the digital “haves” and “have-mores” is a major factor shaping competition at all levels of the economy. The companies leading the charge are winning the battle for market share and profit growth; some are reshaping entire industries to their own advantage. Workers with the most sophisticated digital skills are in such high demand that they command wages far above the national average. Meanwhile, there is a growing opportunity cost for the organizations and individuals that fall behind. Our new McKinsey Global Institute (MGI) report, Digital America: A tale of the haves and have-mores, represents the first major attempt to measure the ongoing digitization of the US economy at a sector level. It introduces the MGI Industry Digitization Index, which combines dozens of indicators to provide a comprehensive picture of where and how companies are building digital assets, expanding digital usage, and creating a more digital workforce. In addition to the information- and communication-technology sector, media, financial services, and professional services are surging ahead, while others have significant upside to capture.

Building on our January 2017 report on automation, McKinsey Global Institute’s latest report, Jobs lost, jobs gained: Workforce transitions in a time of automation (PDF–5MB), assesses the number and types of jobs that might be created under different scenarios through 2030 and compares that to the jobs that could be lost to automation. The results reveal a rich mosaic of potential shifts in occupations in the years ahead, with important implications for workforce skills and wages. Our key finding is that while there may be enough work to maintain full employment to 2030 under most scenarios, the transitions will be very challenging—matching or even exceeding the scale of shifts out of agriculture and manufacturing we have seen in the past.

In advanced and emerging economies alike, individuals are struggling to find work and build careers that make use of their skills and capabilities. The strains in global labor markets have been worsening for decades, and the challenges have been magnified in the aftermath of the global recession. In many countries, concerns about employment have been exacerbated by long-term trends of stagnant wage growth and automation. But at the same time, there has been a constant refrain from employers about the difficulties of finding talent with the right skills. This report notes that online talent platforms are increasingly connecting people to the right work opportunities and that this trend may begin to address these problems - and even to swing the pendulum slightly in favor of workers by empowering them with broader choices, more mobility, and more flexibility. These tools are fundamentally altering the way individuals go about searching for work and the way many employers approach hiring. This research aims to build a deeper understanding of how these platforms can affect labor markets, although it does not attempt to address the many broader issues affecting employment prospects, including wage stagnation, automation, and aggregate demand.

Conventional wisdom says that globalization has stalled. But although the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization is not heading into reverse. Rather, it is entering a new phase defined by soaring flows of data and information. Remarkably, digital flows—which were practically nonexistent just 15 years ago—now exert a larger impact on GDP growth than the centuries-old trade in goods, according to a new McKinsey Global Institute (MGI) report, Digital globalization: The new era of global flows. And although this shift makes it possible for companies to reach international markets with less capital-intensive business models, it poses new risks and policy challenges as well. The world is more connected than ever, but the nature of its connections has changed in a fundamental way. The amount of cross-border bandwidth that is used has grown 45 times larger since 2005. It is projected to increase by an additional nine times over the next five years as flows of information, searches, communication, video, transactions, and intracompany traffic continue to surge. In addition to transmitting valuable streams of information and ideas in their own right, data flows enable the movement of goods, services, finance, and people. Virtually every type of cross-border transaction now has a digital component.

Recoveries are increasingly becoming "jobless" due to firm restructuring, skill and geographic mismatches between workers and jobs, and sharp decline in new start-ups. The US needs to create 21 million new jobs by 2020 to regain full employment—and only achieves this in our most optimistic job-growth scenario. The US workforce will continue to grow until 2020, but under current trends, many workers will not have the right skills for the available jobs. Technology is changing the nature of work: Jobs are being disaggregated into tasks, work is becoming virtual, and firms are relying on flexible labor (temporary, contract workers). These trends offer new opportunities for creating jobs in the United States, a trend that some companies do not fully appreciate. Progress in four dimensions will be essential for reviving the US job-creation machine: Develop the US workforce-skill to better match what employers are looking for; expand US workers' share of global economic growth by attracting foreign investment and spurring exports; revive the nation's spark by supporting emerging industries, ensuring more of them scale up in the United States, and reviving new business start-ups; and speed up regulatory decision-making that blocks business expansion and new investment.

Some 40 million workers across advanced economies are unemployed. With many nations still facing weak demand - and the risk of renewed recession - hiring has been restrained. Yet there are also long-range forces at play that will make it more difficult for advanced economies to return to pre-recession levels of employment in the years to come. As a result, the current disequilibrium in many national labor markets will not be solved solely with measures that worked well in decades past. To help develop appropriate new responses, McKinsey Global Institute (MGI) examines five trends that are influencing employment levels and shaping how work is done and jobs are created.