HRD Challenges and Opportunities arising from Digital Innovation

APEC Currents

February 2019

By Joanne Nixon

Service Delivery Director at RedPepper Mergers

This article is synthesised from the RMIT report ‘Human Resource Challenges and Opportunities Arising from Digital Innovation’ (RMIT 2018), focussing on the impact of digital technologies on the future of workplace skills and the challenges arising from digital innovation trends.  To read the full report please click here.

Rapid technological change, developments in robotics, artificial intelligence, and machine learning have put us on the cusp of a new age.  Digital innovation will change the workplace for everyone and can bring enormous opportunities for APEC economies.  Although, as demand for digital skills grows, many governments and organisations are challenged to provide policies that support labour market adaptability, employment, life-long learning and workforce participation to keep pace with development of capability to support digital innovation. This widening digital and educational divide is obstructing the achievement of APEC’s objective of sustainable and inclusive growth in the region. 


Digital innovation is widely recognised as a catalyst for economic growth and increased social welfare. The potential to improve society through increased productivity, better government services, and access to improved healthcare and broader markets, is recognised as being vital to sustainable economic growth. Digital innovation is driving structural adjustment in the labour market and raising the requirement for effective human resource development to prepare coming generations for the work of the future in the digital age, upskill existing workers to ensure they can participate and are not displaced, and act to ensure that vulnerable groups are not left behind. As digital technology is adopted more rapidly, the need for advanced digital literacy for everyone is increasingly needed for participation in, and to support these advancements (Khan & Forshaw 2017; NZ Digital Skills Forum 2017; OECD 2016; Reisdorf & Groselj 2017).


Any major technology development will mean some change and adjustment in the economy. The way people work and the skills that are essential in today’s labour market are rapidly changing, and the impact of digital technology advancements will create a future of work that is vastly different from what we see today (see Figure 1) (OECD 2016). It’s commonly agreed that tasks that are more routine, physical, highly structured or undertaken in predictable environments are more susceptible to automation. It’s expected that this will impact low and medium skilled workers more than highly skilled ones, potentially creating increasing levels of inequality both within and across economies if barriers to education and re-training aren’t addressed (Khan & Forshaw 2017; McKinsey & Co. 2017). 


Figure 1- Impact of Digital Technologies on the Workplace of the Future 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: RMIT 2018

But it is not all bad, creative destruction of jobs has historically resulted in an 8-9% increase in labour market demand as new jobs are created. If we consider the introduction of computers which resulted in a decrease in typists, was offset by the creation of new roles such as developers and programmers which increased jobs far in excess of the roles lost.  It is expected that 250 million new jobs will be created (net of automation) by 2030, people will continue to work alongside machines and the displaced will find other work (McKinsey & Co. 2017).  These changes are benefiting many, as goods and services are being produced faster and at lower cost (Frey & Osbourne 2017).


Individuals in the workforce will need resilience and adaptability to navigate this changing environment and digital capability and skills development are of vital importance. The demand for digital skills is growing and many economies, both developed and developing, are not adequately equipped to support business needs now, nor in the future. Indications are that a significant gap exists, globally it is reported that 55% of organisations consider the digital skills gap to be widening (see Figure 2) (Capgemini 2017).
 

Figure 2 – Organisations perceived Digital Talent Gap by Geography 


Source: Capgemini 2017

With future anticipated demand for digital skills predicated to far outweigh the current supply within the labour market and education institutions, APEC Governments are facing pressure to provide adequate systems to provide the educational qualifications, skills and competencies for existing and future workers to meet the needs of industries adopting emerging technologies and digitalisation (OECD 2016).  There is a pressing need for education institutions to provide appropriate grounding in IT related skills and the ability to innovate in a digital environment by providing education in higher levels of non-routine cognitive skills, complex problem solving, creativity, as well as fostering stronger socio-emotional skills (OECD 2018).
Science Technology Engineering and Maths (STEM) is a considered a key facilitator of digital innovation, as such it is vital for economies to increase participation in STEM education.  Women represent fifty percent of the workforce but are significantly underrepresented in Information Communication and Technology (ICT) roles and digital innovation activities.  Barriers to inclusion for women vary across economies, with poverty and lack of access to adequate education being a significant factor in developing economies.  Increased participation by women is vital to sustainable economic growth and measures need to be taken to encourage more girls to participate in STEM education and to support women in ICT roles.

   
While access to STEM in education continues to be a challenge for women, the digital environment has provided some advantages.  Access to digital technology and tools have provided women greater access to information, markets, and also the ability to participate in the labour market in a more flexible way.  Most notably, digital tools have provided women in developing economies leapfrog opportunities and empowerment that they previously have not been able to access (OECD 2018, Zahidi 2018).   Brunei Darussalam is a good example of an APEC economy that has provided a supportive environment for females to enter into STEM fields (see Figure 3).  It currently leads APEC with almost 50% of STEM graduates being women, far in excess of more developed economies such as Australia and the USA, highlighting the advantages that can be gained by taking advantage of new opportunities made available by digital technology (Jamrisko 2017). 

Figure 3 - Women in STEM – APEC 

Source: Jamrisko 2017

 

APEC economies widely recognise the need for measures that remove the barriers to digital innovation, particularly for women, indigenous groups, the elderly, workers in the informal economy, as well as rural and remote populations. While digital innovation is driven by the actions of the private sector, governments are key to providing an enabling environment.  The exponential rate of change being created by digital technologies requires policy and regulation development that is agile, considers everyone in society and involves key stakeholders in its development.  


In working toward closing the skill gap and ensuring economies can respond to human resource training needs in support of social and economic goals, emphasis needs to be placed on governments, the private sector and educators working together to ensure workers and students are suitably skilled for jobs of the future and that an environment of lifelong learning is fostered. Digital capability and skills development are vitally important for all APEC economies to ensure the benefit of digital technology positively impacts all of society. In particular APEC economies should continue to focus on targeted demand-driven institutional capacity building to ensure that education, vocational and enterprise-based training systems can apply digital and ICT innovations to deliver education and training, reform curricula to improve technical and soft skills, foster a culture of life-long learning, establish micro credentials and digital badge concepts for targeted accreditation, and introduce campaigns to encourage enrolment in STEM and ICT courses, including by women. If economies fail to manage these challenges the divide between them as well as individuals within society will potentially widen, there will be increasing unemployment and depressed wages - particularly for the young.  

 


References


Capgemini (2017), ‘The digital talent gap: are companies doing enough?’, <https://www.capgemini.com/resources/digital-talent-gap/>.

 
Frey, CB & Osborne, MA (2017), ‘The future of employment: How susceptible are jobs to computerisation?’, Technological Forecasting and social Change 


Jamrisko, M (2017), ‘This Country leads Asia-Pacific in Female science Graduates’, Bloomberg, <https://www.bloomberg.com/news/ articles/2017-09-28/brunei-leads-apec-in-science-and-tech-female-graduates-chart>. 
 

Khan, N & Forshaw, T (2017), ‘Accenture New skills Now: Inclusion in the digital economy’, Accenture Corporate Citizenship, <https://www.accenture.com/t20171012T025413Z__w__/in-en/_acnmedia/PDF-62/Accenture-New-skills-Now-Report.pdf>. 
 

McKinsey & Co. (2017), ‘Jobs lost, jobs gained: workforce transition in a time of automation, McKinsey Global Institute, <https:// www.mckinsey.com/~/media/Mckinsey/Featured Insights/Future of Organizations/What the future of work will mean for jobs skills and wages/MGI-Jobs-lost-Jobs-Gained-Report-December-6-2017.ashx>. 
 

NZ Digital skills Forum (2017), ‘Digital skills for a Digital Nation an Analysis of the Digital skills landscape of New Zealand’, New Zealand Digital skills Forum, <https://nztech.org.nz/wp-content/uploads/2014/10/Digital_skills_Report-Online-2017-Dec.pdf>. 
 

OECD (2018), ‘Achieving Inclusive growth in the face of digital transformation and the future of work’, OECD, <http://www. oecd.org/g20/OECD_Achieving%20inclusive%20growth%20in%20the%20face%20of%20FoW.pdf>. 
 

OECD (2016), ‘OECD science, Technology and Innovation Outlook 2016, OECD Publishing, Paris, <http://dx.doi.org/10.1787/sti_in_ outlook-2016-en>. 
 

Reisdorf, B & Groselj, D (2017), ‘Digital Divides, Usability and Social Inclusion’, in J Choudrie, S Kurnia & P Tsatsou (eds), social Inclusion and Usability of ICT-enabled services., 1st edn, Routledge, New York, <https://www.taylorfrancis.com/ books/9781315677316>. 
 

RMIT (2018), ‘Human Resource Development Challenges and Opportunities Arising from Digital Innovation’, RMIT University, Melbourne, <http://www.apec.org.au/rmit-abac-report-2018>.
 

Statista (2019) <https://www.statista.com/statistics/201232/forecast-of-mobile-internet-penetration-in-asia-pacific/>
 

Statista (2018), ‘Fixed broadband internet penetration rate by region’, Statista.com, <https://www.statista.com/statistics/370681/fixed- broadband-internet-penetration-region/>. 
 

World Bank 2016. World Bank (2016), ‘World Development Report 2016: Digital Dividends’, World Bank, Washington DC 
 

World Economic Forum (2017), ‘The Global Risks Report 2017’, World Economic Forum, Geneva 
Zahidi, S (2018), ‘Working Muslim women are a trillion-dollar market’, World Economic Forum Agenda 

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