The biggest growth constraint in many economies is no longer a lack of capital—it’s a skills gap.
Many emerging markets have large youth populations, with high levels of youth unemployment or underemployment. In many cases, there’s a deficit of jobs and opportunity, but the skills gap is a critical piece of the picture. The reasons for this are varied and complex, ranging from educational gaps to limited digital infrastructure to gender-specific barriers to a lack of specialized skills training (especially in digital skills).
Closing this skills gap is a shared challenge—and an opportunity.
Multinational companies doing business in emerging markets need a skilled workforce to underpin resilient value chains and growth in new markets. And global development actors, local governments, and communities know that high levels of unemployment threaten social and economic prosperity.
By investing in workforce development, diverse partners can target a range of interconnected goals, including reducing poverty, food insecurity, and gender inequality; improving health and wellbeing; and advancing decent work and economic growth.
4 Focus Areas to Advance Workforce Development in Emerging Markets
Closing the skills gap offers significant strategic alignment between governments, the global development community, and multinational companies with a long-term strategic stake in priority emerging markets.
That’s why we see opportunities for cross-sector partnerships to jointly tackle education and workforce development.
Below, we outline 4 key areas for collaboration—through which diverse stakeholders can create and execute education and workforce development strategies to close the skills gap in emerging markets.
1. Improving Education and Learning Outcomes
In many emerging markets, students struggle to finish primary school, with many leaving the system without the reading, writing, and math skills they need to secure a job, remain employed, and manage their finances.
A strong education system is a key foundation for workforce development.
In Uganda, we’re facilitating strategic partnerships between the USAID Integrated Child and Youth Development (ICYD) Activity—led by the Education Development Center—and multinational, regional, and local companies to improve early grade reading and primary school retention.
Priority areas for partnership range from advancing digital learning to creating traveling libraries to establishing new internship programs to improving lighting for reading practice at home.
2. Advance Digital Development and the Digital Economy
The digital economy encompasses the growing segment of economic activity powered by online connection and digital technology. It holds great promise for economic growth and transformation; yet, in many key emerging markets, the digital economy is still a luxury that relatively few people enjoy. In fact, the United Nations estimates that almost half of the world’s population (3.7 billion people) are offline.
Without access to the internet, people lack access to valuable sources of information, education, and vocational training—as well as critical enterprise growth opportunities afforded by the digital economy.
Getting more businesses, entrepreneurs, and workers online in emerging markets represents a key workforce development and economic growth priority—and a prime area for co-investment and private sector partnership. Currently, we’re working with USAID on the Digital Economy Market Development (DEMD) activity, bringing the private and public sectors together to generate best practices and lessons learned for e-commerce, trade facilitation, and technology adoption, with special attention to the barriers to women’s participation in trade and the digital economy.
3. Expand Training in Digital Skills and Critical Soft Skills
In the coming years, the demand for digital skills will only grow. For example, a joint study by the IFC and World Bank found that, by 2030, some level of digital skills will be needed for more than half of the jobs in Kenya; up to 45% of jobs in Cote d’Ivoire, Nigeria, and Rwanda; and nearly a quarter in Mozambique. Digital skills range from basic digital literacy and use of digital devices and online applications to more advanced skillsets required for ICT-oriented professions.
Another core area is soft skills development. Private sector employers in many contexts around the globe point to underdevelopment of key soft skills—such as critical thinking, problem-solving, adaptability, professional communication, job-place etiquette—as impediments to finding and engaging young people.
Helping young people in emerging markets access skills development training, support, and connections is a major area of opportunity for cross-sector partnership. We worked with USAID on the Kenya Youth Employment and Skills (K-YES) program, for example, to connect young people with labor market information, financial institutions, and 21st-century employability skills.
Through our work with USAID and K-YES, we designed and launched over 100 public-private partnerships and multi-stakeholder platforms to promote local economic opportunities. For example, K-YES partnered with IBM to integrate IBM’s Digital Nation Africa (DNA) digital literacy curriculum into the ICT curricula offered through vocational training centers in Kenya.
IBM benefitted from the opportunity to roll out its DNA platform to new markets, while Kenyan job seekers could use the platform to gain digital literacy skills, access labor and market information, and utilize its online jobs portal.
4. Invest in Women
Gender inequality is a major barrier to workforce development and inclusive economic growth.
Take, for example, women in agriculture. Nearly half of the world’s smallholder farmers are women. Yet women struggle to obtain equitable access to training, technology, financing, and land rights.
By targeting investment toward removing barriers to women’s economic participation, we can make women’s work more visible, productive, and rewarding—with substantial benefits for women, for companies, and for inclusive growth.
This is the pathway that PepsiCo and USAID have chosen in their new global partnership. Together, PepsiCo and USAID seek to prove the business case for investing in women’s economic empowerment. The partners are working to strengthen women’s agricultural skills and access to resources within PepsiCo’s global agricultural supply chain, to demonstrate the value of women’s contributions to core business and impact goals.
Creating Impact through Workforce Development in Emerging Markets
Closing the skills gap in emerging markets is an area primed for greater public-private collaboration.
By focusing partnership and co-investment on the 4 key areas above, cross-sector partners can accelerate workforce development and help close the skills gap in ways that will benefit companies, workers, local economies, and local communities.