Bridging the skills gap: Fuelling careers and the economy in Malaysia
Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Malaysia, between November 2022 and January 2023. It also interviewed employers and industry experts across the region to understand their perspectives on skills gaps, as well as reskilling and upskilling aspirations.
The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all work in a diverse mix of industries.
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Bridging the skills gap: Fuelling careers and the economy in Singapore
Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Singapore, between November 2022 and January 2023. It also interviewed employers and industry experts across the region to understand their perspectives on skills gaps, as well as reskilling and upskilling aspirations.
The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.
The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.
This article—one in a series of 12 market reports—examines these issues in Singapore. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Digital skills are a priority for 69% of employees in Singapore, more than any of the other surveyed APAC markets. Employees in Singapore also prioritise other skills categories such as analytical skills (53%) and soft skills (51%). Nearly half (49%) of employees have a poor understanding of what skills are needed in the market. 61% of employees in Singapore rely on government awareness programmes for information about which skills will be valuable in the future.The pandemic disrupted life in Singapore, and the ensuing, ongoing economic uncertainty has created further difficulties in the job market. But through all of this, the potential of digital technologies in reshaping the economy’s future-readiness has shone through. Compared with most of its neighbours, Singapore is already far along its digitalisation journey, with major policies like the “Smart Nation” initiative1 and the national Green Plan 20302 charting roadmaps towards a highly digital, green economy.
These ambitious plans are creating new pressures and opportunities for the city-state’s workforce. And emerging skill sets will be vital to navigating its changing needs.
Advancing digital skills
Digital skills are a priority for 69% of employees in Singapore, the highest out of the 14 surveyed APAC markets. More than 90% of firms in Singapore have already adopted some type of digital technology, and there is strong demand in the city-state for tech talent.3 Our survey shows that advanced digital skills such as artificial intelligence (AI) and machine learning, cloud computing, and the Internet of Things are becoming pivotal. Importantly, these skill sets are increasingly in demand across pretty much every industry imaginable—from healthcare to manufacturing.
Given the shortage of tech talent in Singapore, workers possessing advanced digital skills are also likely to have more bargaining power in the job market.4 Individuals applying these advanced digital skills at work can boost their salaries by more than 120%.5 This is seen in the Economist Impact survey, which shows that one in four employees in Singapore say higher pay and bargaining power best describe their motivation to acquire new digital skills.
One such area of importance is cybersecurity. According to Soon Joo Gog, chief skills officer at SkillsFuture,Singapore, cybersecurity skills are becoming increasingly important to any company engaging with digital services. These skills are considered key to ensuring business continuity, particularly given the spate of major security breaches that have taken place within the past year.6 Among the Economist Impact survey respondents, cybersecurity is considered a “must have” by 24.6% and a “good to have” by 68.1%.
Basic digital skills remain critical too. Given the advanced state of Singapore’s digital transformation, the intensive pace of digital adoption across all economic sectors has made digital skills foundational to many, if not most, careers. The Economist Impact survey shows that basic digital skills are considered a “must have” by the vast majority of respondents (75.4%), in line with the regional average of 73.9%.
Employees in Singapore also place greater importance on other skills categories such as analytical skills (53%) and soft skills (51%). Analytical skills like project management and critical thinking are increasingly becoming foundational skills that enable professional and personal progress, highlight 29% of the employees in our survey. These skills are highly transferable across different roles and are “critical core skills” that facilitate career mobility as well as make it easier to grasp other more technical skills.7 With remote and hybrid setups likely to be a permanent feature for six out of ten companies going forward, soft skills like adaptability, communication and resilience will be increasingly important.8
On the other hand, green skills are considered relatively less valuable by employees at the moment, ranked first by only 12% of employees—compared with 17.7% in APAC. Ms Gog says that while digital skills are pervasive across industries and job roles because of enabling technologies that augment human activities, the momentum of green activities across industries are picking up, eventually all jobs will require green skills, albeit it’s nascent state.
However, as Singapore strengthens its focus on the green economy, and as developments such as COP27 bring sustainability and green issues to the mainstream globally, more companies will focus on the green economy and new roles will emerge in this space, making it important for workers to acquire these skills. In 2020 the Singapore government estimated that the city-state would create 55,000 jobs in the coming decade because of the growing focus on sustainable development. Demand is expected to come from sectors including finance, agriculture, food, urban solutions such as sanitation and waste management, carbon services, and climate science.9
At the moment, however, most green upskilling is driven by employees’ personal interest in the topic (26%), a trend that is expected to change as Singapore prioritises environmental goals and sustainability.
Lack of time is a major barrier to learning new skills
Upskilling and reskilling has a high impact when it comes to improving current employees’ performance, as reported by 38% of workers in Singapore. While employees benefit from upskilling, they face multiple challenges. One of the primary concerns for employees in Singapore is the lack of time to learn new skills (42%). Long working hours and caregiving responsibilities leave little time for learning. Moreover, 49% of respondents say they don’t have a grasp of which skills are in demand in the job market. Due to this lack of clarity, they struggle to decide how best to allocate their already limited time and resources in learning new skills.
Small and medium-sized enterprises (SMEs)—which comprise 99% of all Singaporean companies and 71% of the workforce10—are particularly vulnerable to this problem, due to their limited resources and training capabilities. This results in significant information asymmetry.
Firms in Singapore can engage with resources from the government like the National Centre of Excellence’s Workplace Learning programme, which aims to promote SME reskilling by connecting firms to a pool of mentors and consultancy services.11
While access to resources is a necessary step, it's not sufficient on its own, cautions Ms Gog. Businesses need a fresh approach to make continuous learning a workplace activity and incorporate lifelong learning opportunities into their daily operations.
Some employers are being proactive: respondents report that workplace training and online learning are major sources of skills attainment. Online certificates are also recognised by employers, 56% of survey respondents say.
However, Ms Gog warns that while online learning is a useful mode of learning, it alone is not enough to promote deep learning, especially for technology skills. She talks about the importance of putting into practice what one has learnt from online courses in the workplace, and the role of mentoring, in developing deeper expertise.
Collaboration between employers and government is essential
According to our survey, government awareness programmes (61%) are a main source of skills information for employees in Singapore, ahead of social media and advertisements (45%) and news articles (44%), and substantially higher than the regional average (42.5%).
The Singapore government is driving a number of skilling initiatives through various programmes, subsidies and incentives such as school teacher credits, enterprise credits, and access to online and offline advisory services. More can be done, however, with Ms Gog suggesting that Singapore has been leveraging on “tripartisan approach”—one that engages the efforts of employees, the government and employers to enable a competitive and inclusive economy. Companies may also explore collaborations with universities or polytechnics to develop training opportunities for their employees, she adds.
Employers also have a key role to play in determining how their own skilling needs are met. Our survey reveals that workers in Singapore primarily expect employers to provide information on different skills (64%), support their mental well-being (51%), and provide notable recognition through certification and additional perks (48%). Employers should also look towards training specific skill sets for specific goals—for example, achieving cybersecurity resilience. Employers can focus on developing dedicated cybersecurity talent12 and working with government agencies to explore the requisite upskilling needs.
Moreover, to support employees in managing time, companies could make upskilling a workplace activity, ensuring that learning and working happen in tandem. Employers could also regularly monitor the skills they need and clearly communicate the same to employees. Government through its awareness programmes could continue to keep the workforce updated especially groups and organisations that lack clarity such as SMEs.
Collaboration is, and will continue to be, a crucial ingredient for Singapore’s skilling efforts. Despite the progress that the city-state has made, employers and employees must also be aware that emerging job roles are still being shaped, and that continuous learning will be the fundamental differentiator for change.
1 https://networkreadinessindex.org/reviewing-the-state-of-southeast-asias-digital-transformation-and-opportunities-for-the-region-moving-forward/
2 https://www.greenplan.gov.sg/
3 https://www.mci.gov.sg/pressroom/news-and-stories/pressroom/2023/2/speech-by-mrs-josephine-teo-minister-of-communications-and-information-at-the-ministry-of-communications-and-information-committee-of-supply-debate-on-28-february-2023
4 https://www.skillsfuture.gov.sg/skillsreport
5 https://www.frontier-enterprise.com/advanced-digital-skills-beef-up-singapore-gdp-by-s62-4-billion/#:~:text=Advanced%20digital%20skills%20include%20cloud,a%20boost%20in%20their%20income
6 https://www.zdnet.com/article/singapore-wants-all-critical-infrastructures-to-be-ready-for-cyber-threats/
7 https://www.skillsfuture.gov.sg/skills-framework/criticalcoreskills
8 https://www.todayonline.com/singapore/most-firms-hybrid-work-employees-well-being-drop-plans-1882486
9 https://www.channelnewsasia.com/singapore/new-jobs-environment-sustainability-grace-fu-mse-633886
10 https://www.singstat.gov.sg/modules/infographics/-/media/Files/visualising_data/infographics/Economy/singapore-economy21032022.pdf
11 https://www.skillsfuture.gov.sg/nace
12 https://govinsider.asia/intl-en/article/cyber-challenges-of-a-digitalised-world-amit-roy-choudhury
Bridging the skills gap: fuelling careers and the economy in Hong Kong
The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.
The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.
This article —one in a series of 12 market reports—examines these issues in Hong Kong. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key takeaways:
Almost half (47%) of employees in Hong Kong report a poor understanding of what skills are needed in the market. Although analytical (66%) and self-management (65%) skills are top priorities for employees due to their wide application, advanced digital skills will be key to supporting Hong Kong’s digital economy aspirations. Hong Kong employees view cybersecurity (64.9%) and data analysis and visualisation (54.1%) as must-have advanced digital capabilities. Over half (51%) of employees in Hong Kong report that their employers are shifting their hiring processes to refocus on skills-based qualifications rather than full-time degrees, placing more importance on the role of employers and the government to provide support and clarity into what skills are needed in the market.Despite being a major global business hub, the city’s intensifying talent crunch#_ftn1" name="_ftnref1" title="">[1] is severely impacting its companies’ access to workers with a specific set of skills. Without action, the economy could lose out on US$220bn in unrealised value due to lack of talent by 2030.#_ftn2" name="_ftnref2" title="">[2]
The government has acknowledged the decline in the city’s workforce in the past couple of years and developed policies aimed at attracting high-skilled talent.
The future of the city’s workforce is further complicated by a rapidly ageing population.#_ftn3" name="_ftnref3" title="">[3] By 2050 roughly 40% of citizens will be aged 65 years or above.#_ftn4" name="_ftnref4" title="">[4] With longer life expectancies keeping people in the workforce for longer, sustaining Hong Kong’s economy will require a focus on empowering older workers and bolstering their skills with re-education where required.
Hong Kong employees consider analytical and self-management skills as most important
Similar to their counterparts in Australia, the Philippines and Taiwan, Hong Kong employees consider analytical (66%) and self-management (65%) skills as priority areas. This is likely due to their high degree of transferability and cross-role application (Figure 1). Apart from these skills, more than half of employees in Hong Kong consider advanced digital skills like cybersecurity (64.9%) and data analysis and visualisation (54.1%) as “must haves” (Figure 2). Hong Kong is especially vulnerable to cyber-attacks as a result of low awareness among businesses to monitor these threats. This, along with the rising cost of breaches, is driving more demand for cybersecurity skills.#_ftn5" name="_ftnref5" title="">[5]
Employees are unsure of in-demand skills
Motivations to pursue skills vary. Career progression and promotion opportunities are major drivers for workers to acquire analytical and digital skills, demonstrating their widespread application to different occupations (Figure 2). In comparison, 33% report that their pursuit of soft skills is motivated by personal development and lifelong learning. When asked about the benefits of upskilling and reskilling for their jobs, employees report significant boosts to their salaries and bargaining power (63%) and high improvements in their performance in their current role (55%).
Despite these net positives, many workers in Hong Kong report insufficient time to pursue upskilling and reskilling due to long working hours and other commitments - a trend common across all skill sets. Nearly half (47%) of surveyed employees have a poor understanding of what skills are needed in the market. Mr Jim So, regional development manager of Asia at Skills Consulting Group, shares that even when employees are offered upskilling opportunities, many choose not to pursue them because they “don’t necessarily see the direct benefits”. This might explain why only 18% of Hong Kong employees prioritise green skills, as the applications are still nascent.
The workplace’s key role in upskilling
Employers can play a central role in filling these gaps, as workplace training remains an important source for workers to acquire digital (44%), analytical (37%) and soft (32%) skills. Online courses offer another recourse to employees’ lack of time, offering flexibility and affordability. More than half (52%) of workers in our survey believe that employers now value online certificates. Experts agree. Over half (51%) of employees in Hong Kong report that their employers are shifting their hiring processes to refocus on skills-based qualifications rather than full-time degrees. In addition, recruiters are increasingly prioritising “experience, attitude and skills over paper”, according to Mr So.
Employees also expect their employers to provide information on emerging skills (65%) and offer financial incentives (62%) to reskill and support their mental well-being (44%). To remain competitive, firms could build working environments that appeal to employees’ changing needs—for instance, understanding employees’ needs and providing them with flexibility for working and learning. Furthermore, creating the right policies to enable further learning and embedding incentives would help encourage the upskilling they need to plug labour gaps. For instance, employers should look to align remuneration with skills, especially as the higher skills-based pay is a motivator for digital (25%) and analytical (30%) upskilling.
Government support can reshape Hong Kong upskilling
While employers play a crucial role in supporting the upskilling of their workforces, the government could pivot the macro-environment to incentivise and enable upskilling. One way they can do this is with financial incentives and subsidies. Several initiatives such as the Continuing Education Fund grants HK$25,000 (US$3185) to eligible adults to upskill or reskill. Recently, Hong Kong’s Innovation and Technology Commission established a programme#_ftn6" name="_ftnref6" title="">[6] that will subsidise local firms’ efforts to upskill their employees in advanced technologies.
One key role for the government is to raise awareness of in-demand skills. At present, only a quarter of Hong Kong employees receive information about future skills from government awareness programmes compared with the regional average of 42.5%. Almost a quarter of employees (27%) also identify lack of information as a significant obstacle to learning. To overcome the communication gap, the government could provide clarity on valuable future skills by publishing reports that identify in-demand skills. Working with firms and industry associations, the government could better promote specific reskilling courses that are on offer. Doing so would also support the government’s efforts to bolster its digital economy and solve its tech talent crunch.#_ftn7" name="_ftnref7" title="">[7]
There is room for improvement around developing green skills. While most employees in Hong Kong are aware of sustainability issues, says Mr So, companies could do much more to prioritise green skills and increase awareness of the commercial as well as environmental benefits they can bring. The city’s scramble for talent has accelerated with the requirement of Hong Kong-listed firms to disclose sustainability reports. However, the shortfall in talent is a significant break on the city’s aspiration to become a sustainability hub.#_ftn8" name="_ftnref8" title="">[8] In addition, most green upskilling is currently motivated by personal interest (25%). Mr So remarks that there is an opportunity for the government to step into this gap and provide “investment and support” for learners “to be able to anticipate and adapt” to a changing marketplace and environment.
#_ftnref1" name="_ftn1" title="">[1]https://focus.kornferry.com/leadership-and-talent/hong-kong-must-use-its-competitive-advantages-to-close-the-skills-gap/ #_ftnref2" name="_ftn2" title="">[2] Ibid. #_ftnref3" name="_ftn3" title="">[3] https://www.reuters.com/breakingviews/brain-drain-solution-is-staring-hong-kong-face-2022-10-19/ #_ftnref4" name="_ftn4" title="">[4] https://www.weforum.org/agenda/2023/02/world-oldest-populations-asia-health/ #_ftnref5" name="_ftn5" title="">[5] https://www.scmp.com/tech/tech-trends/article/3188979/hong-kong-organisations-are-easy-targets-hackers-more-cyberattacks #_ftnref6" name="_ftn6" title="">[6] https://www.itf.gov.hk/en/funding-programmes/nurturing-talent/rttp/ #_ftnref7" name="_ftn7" title="">[7]https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3201238/where-are-all-tech-experts-hong-kongs-got-plenty-jobs-not-enough-talent-and-employers-are-fed #_ftnref8" name="_ftn8" title="">[8] https://asia.nikkei.com/Business/Business-trends/Hong-Kong-races-to-hire-ESG-talent-amid-green-hub-pushBridging the skills gap: Fuelling careers and the economy in Pakistan
The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.
The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.
This article—one in a series of 12 market reports—examines these issues in Pakistan. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Digital skills (57.3%) are a top priority for employees in Pakistan owing to a booming IT sector and the country’s rapidly growing freelancer market, which is the third fastest growing market globally#_ftn1" name="_ftnref1" title="">[1]. Recent acceleration of digitalisation has resulted in higher demand for basic digital skills (72.1%).#_ftn2" name="_ftnref2" title="">[2] #_ftn3" name="_ftnref3" title="">[3] Employees in Pakistan are motivated to acquire digital skills to improve career progression and promotion opportunities (29.3%), as well as to secure better pay and bargaining power (23%). Both the government and employers have important yet distinct roles to play in upskilling Pakistan: while employees expect the government to provide financial incentives, they point to employers as being responsible for providing access to diversified skilling programmes and information on the skills needed for different roles.Despite rising digital penetration in Pakistan in recent years, 46% of the population still lacks internet access.#_ftn4" name="_ftnref4" title="">[4] While 80% of adults live in areas served by mobile broadband, many still do not access the internet.#_ftn5" name="_ftnref5" title="">[5] Out of a total of 182 m mobile subscriptions, only 38 m belong to women.#_ftn6" name="_ftnref6" title="">[6] This could be a result of the low female literacy rate (48%),#_ftn7" name="_ftnref7" title="">[7] which is far below the overall literacy rate of around 60%.#_ftn8" name="_ftnref8" title="">[8] Moreover, the female labour force participation rate is among the lowest globally (25%) and women are mostly employed in the informal sector.#_ftn9" name="_ftnref9" title="">[9] On the other hand, the country struggles with youth unemployment. Almost a third (31%) of the educated youth with professional degrees was unemployed in 2022.#_ftn10" name="_ftnref10" title="">[10]
Amid this backdrop, the government is prioritising digitalisation and implementing initiatives to close the existing skills gap. For instance, Pakistan introduced its “Digital Pakistan” roadmap in 2018, which set out a number of policies and initiatives to help the economy to realise US$59.7 bn (PKR9.7 trn) in annual value by 2030.#_ftn11" name="_ftnref11" title="">[11] The policy targets the upskilling and reskilling of young graduates and the existing workforce to support the country’s growing digital economy and help spur freelance IT sector exports. On this front, it hopes to reach US$3 billion by 2024, up from US$2.12 billion in 2021.#_ftn12" name="_ftnref12" title="">[12]
Infrastructure obstacles—such as inequitable internet access across the country and a lack of sufficient digital skills training—have lowered the pace of digitalisation at workplaces, says Saad Gilani, a senior programme officer at the International Labour Organization (ILO).
Pakistan’s growing freelance economy boosts digital upskilling
More than half of employees (57.3%) in Economist Impact’s survey consider digital skills the most important to acquire. Within this broad category, most employees consider basic digital skills (72.1%) as the most important to have, a trend that reflects the country's struggles with basic digitalisation. Advanced digital skills are also considered must-haves by employees in Pakistan such as data analysis and visualisation (49.2%), digital marketing and e-commerce (47.7%), and IT support (40%).
Apart from the pandemic, which motivated many employees (34.7%) in the country to upskill, free online courses (33.3%) have enabled people to acquire new digital skills. One such initiative, the government's e-rozgaar platform, provides online training to budding freelancers.#_ftn13" name="_ftnref13" title="">[13] #_ftn14" name="_ftnref14" title="">[14] Additionally, Pakistan’s digital freelance market surged by 69% annually in 2020, which registered especially strong gains for women, who often struggle to achieve equity in traditional education and labour force participation.#_ftn15" name="_ftnref15" title="">[15]
For Mr Gilani, the success of the freelance market falls in line with his observations that young employees in Pakistan are highly self-motivated to upskill to remain relevant in the job market. “There are not many employer-led initiatives, so employees are learning by themselves,” he says.
Apart from digital skills, employees in Pakistan point to the importance of self-management (53.3%) and soft skills (46.7%). For example, 71.4% consider adaptability and flexibility a high priority, compared with the regional average of 65.5%. Similarly, 81.5% report communication skills as a “must-have”, higher than the regional average of 70.9%. Mr Gilani suggests these findings reflect the fact that soft skills are applicable across diverse job roles and industries. Soft skills attainment also appears to be linked to digital capabilities—around 81% of employees in Pakistan agree that digital skills have helped them gain confidence and improve in other areas like communication, analysis and critical thinking.
Although green skills (10.7%) are not considered a key priority for employees in Pakistan, Mr Gilani says this is an area for concern given the climate change risks impacting the country.#_ftn16" name="_ftnref16" title="">[16] This vulnerability heightened in 2022, when intense rainfall resulted in devastating flood waters, causing 1,100 deaths and affecting 33m individuals.#_ftn17" name="_ftnref17" title="">[17]
Barriers to upskilling Pakistan
Employees in our survey point to a lack of time (37.3%) and poor workplace culture of learning (32%) as barriers to acquiring new skills. These findings are relevant as most employees report workplace training (54.7%) as a key source of learning new digital skills, emphasising the need for more skilling opportunities in offices.
Another key issue, Mr Gilani says, is the mismatch between university course offerings and industry demand. “There is a high tendency for unemployment among the highly educated youth, stemming from problems in our education system—we don’t see universities inviting companies to tell students what they are looking for and employers aren’t sharing information with educational institutes”. In addition to focusing on university degrees, employers could also consider employees’ skillsets as an important signal for hiring new talent. Nearly 67% of surveyed employees believe that employers in Pakistan are hiring based on skills-based qualifications rather than full-time degrees.
Distinct expectations from government and employers
Faced with the high costs of reskilling and upskilling, more than half (52%) of employees consider the government responsible for providing financial incentives for upskilling. For instance, 29.3% cite government subsidies as a major motivator for acquiring specific skills such as green skills. Providing funding for green skills can bolster Pakistan’s capacity to adapt to a changing climate, says Mr Gilani. He suggests that greater investments in green skills and industries could improve the country’s access to renewable energy sources, reduce its climate resilience and create jobs.
Across all skill types, employers also have an instrumental role in upskilling and reskilling employees. More than four in ten survey respondents say employers have a role to play in providing access to diversified skilling programmes (42.7%) and information on the skills needed for different roles (41.3%). Over a third of employees also consider the government responsible for providing information on skills needed for different roles.
Leaving no one behind
Pakistan is undergoing a pivotal shift in its economy as digital transformation gains momentum. A large part of its success will hinge on leaving no one behind and giving an equal opportunity to everyone including women, young graduates and freelancers, which will boost the country's workforce significantly. Mr Gilani highlights the importance of government’s leadership and direction in providing an overall direction to this skills ecosystem, “If there is consistent leadership, digital skilling policy and an ecosystem, then things can be done.” And while digital skills will continue to be important as the country grows and digitalises in the next few years, analytical and soft skills will be equally important.
#_ftnref1" name="_ftn1" title="">[1]https://dailytimes.com.pk/818869/pakistan-becomes-the-4th-fastest-growin... #_ftnref2" name="_ftn2" title="">[2] Basic digital skills are defined in the survey as the ability to operate basic office software, i.e. Microsoft Office, and/or set up Internet and digital communication tools. #_ftnref3" name="_ftn3" title="">[3] Pakistan is the third-fastest growing freelancer market globally. [Source: http://onlinelabourobservatory.org/oli-supply/] #_ftnref4" name="_ftn4" title="">[4]https://www.pta.gov.pk/en/telecom-indicators #_ftnref5" name="_ftn5" title="">[5] https://www.gsma.com/asia-pacific/wp-content/uploads/2022/11/Making-Digi... #_ftnref6" name="_ftn6" title="">[6] https://onlinelibrary.wiley.com/doi/epdf/10.1111/rode.12994 #_ftnref7" name="_ftn7" title="">[7]#Female_Literacy_Rate_In_Pakistan_2022">https://ilm.com.pk/pakistan/pakistan-information/male-and-female-literac... #_ftnref8" name="_ftn8" title="">[8] https://tribune.com.pk/story/2322073/literacy-and-pakistan #_ftnref9" name="_ftn9" title="">[9] 2021 World Bank estimates, https://www.worldbank.org/en/results/2022/07/07/supporting-legal-reforms... #_ftnref10" name="_ftn10" title="">[10] https://tribune.com.pk/story/2342344/over-31-of-educated-youth-unemployed-reveals-pide #_ftnref11" name="_ftn11" title="">[11] https://accesspartnership.com/pakistans-pkr97-trillion-digital-potential/ #_ftnref12" name="_ftn12" title="">[12] https://www.thenews.com.pk/print/887910-govt-eyes-3bln-from-freelancing-it-exports-by-2024 #_ftnref13" name="_ftn13" title="">[13] https://erozgar.pitb.gov.pk/ #_ftnref14" name="_ftn14" title="">[14] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref15" name="_ftn15" title="">[15] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref16" name="_ftn16" title="">[16] https://edition.cnn.com/2022/08/30/asia/pakistan-climate-crisis-floods-justice-intl/index.html #_ftnref17" name="_ftn17" title="">[17] https://www.weforum.org/agenda/2022/09/pakistan-floods-what-role-did-climate-change-play/Bridging the skills gap: Fuelling careers and the economy in Australia
Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Australia, between November 2022 and January 2023. It also interviewed employers and industry experts across the region to understand their perspectives on skills gaps, as well as reskilling and upskilling aspirations.
The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.
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Related content
Bridging the skills gap: Fuelling careers and the economy in Pakistan
The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.
The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.
This article—one in a series of 12 market reports—examines these issues in Pakistan. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Digital skills (57.3%) are a top priority for employees in Pakistan owing to a booming IT sector and the country’s rapidly growing freelancer market, which is the third fastest growing market globally#_ftn1" name="_ftnref1" title="">[1]. Recent acceleration of digitalisation has resulted in higher demand for basic digital skills (72.1%).#_ftn2" name="_ftnref2" title="">[2] #_ftn3" name="_ftnref3" title="">[3] Employees in Pakistan are motivated to acquire digital skills to improve career progression and promotion opportunities (29.3%), as well as to secure better pay and bargaining power (23%). Both the government and employers have important yet distinct roles to play in upskilling Pakistan: while employees expect the government to provide financial incentives, they point to employers as being responsible for providing access to diversified skilling programmes and information on the skills needed for different roles.Despite rising digital penetration in Pakistan in recent years, 46% of the population still lacks internet access.#_ftn4" name="_ftnref4" title="">[4] While 80% of adults live in areas served by mobile broadband, many still do not access the internet.#_ftn5" name="_ftnref5" title="">[5] Out of a total of 182 m mobile subscriptions, only 38 m belong to women.#_ftn6" name="_ftnref6" title="">[6] This could be a result of the low female literacy rate (48%),#_ftn7" name="_ftnref7" title="">[7] which is far below the overall literacy rate of around 60%.#_ftn8" name="_ftnref8" title="">[8] Moreover, the female labour force participation rate is among the lowest globally (25%) and women are mostly employed in the informal sector.#_ftn9" name="_ftnref9" title="">[9] On the other hand, the country struggles with youth unemployment. Almost a third (31%) of the educated youth with professional degrees was unemployed in 2022.#_ftn10" name="_ftnref10" title="">[10]
Amid this backdrop, the government is prioritising digitalisation and implementing initiatives to close the existing skills gap. For instance, Pakistan introduced its “Digital Pakistan” roadmap in 2018, which set out a number of policies and initiatives to help the economy to realise US$59.7 bn (PKR9.7 trn) in annual value by 2030.#_ftn11" name="_ftnref11" title="">[11] The policy targets the upskilling and reskilling of young graduates and the existing workforce to support the country’s growing digital economy and help spur freelance IT sector exports. On this front, it hopes to reach US$3 billion by 2024, up from US$2.12 billion in 2021.#_ftn12" name="_ftnref12" title="">[12]
Infrastructure obstacles—such as inequitable internet access across the country and a lack of sufficient digital skills training—have lowered the pace of digitalisation at workplaces, says Saad Gilani, a senior programme officer at the International Labour Organization (ILO).
Pakistan’s growing freelance economy boosts digital upskilling
More than half of employees (57.3%) in Economist Impact’s survey consider digital skills the most important to acquire. Within this broad category, most employees consider basic digital skills (72.1%) as the most important to have, a trend that reflects the country's struggles with basic digitalisation. Advanced digital skills are also considered must-haves by employees in Pakistan such as data analysis and visualisation (49.2%), digital marketing and e-commerce (47.7%), and IT support (40%).
Apart from the pandemic, which motivated many employees (34.7%) in the country to upskill, free online courses (33.3%) have enabled people to acquire new digital skills. One such initiative, the government's e-rozgaar platform, provides online training to budding freelancers.#_ftn13" name="_ftnref13" title="">[13] #_ftn14" name="_ftnref14" title="">[14] Additionally, Pakistan’s digital freelance market surged by 69% annually in 2020, which registered especially strong gains for women, who often struggle to achieve equity in traditional education and labour force participation.#_ftn15" name="_ftnref15" title="">[15]
For Mr Gilani, the success of the freelance market falls in line with his observations that young employees in Pakistan are highly self-motivated to upskill to remain relevant in the job market. “There are not many employer-led initiatives, so employees are learning by themselves,” he says.
Apart from digital skills, employees in Pakistan point to the importance of self-management (53.3%) and soft skills (46.7%). For example, 71.4% consider adaptability and flexibility a high priority, compared with the regional average of 65.5%. Similarly, 81.5% report communication skills as a “must-have”, higher than the regional average of 70.9%. Mr Gilani suggests these findings reflect the fact that soft skills are applicable across diverse job roles and industries. Soft skills attainment also appears to be linked to digital capabilities—around 81% of employees in Pakistan agree that digital skills have helped them gain confidence and improve in other areas like communication, analysis and critical thinking.
Although green skills (10.7%) are not considered a key priority for employees in Pakistan, Mr Gilani says this is an area for concern given the climate change risks impacting the country.#_ftn16" name="_ftnref16" title="">[16] This vulnerability heightened in 2022, when intense rainfall resulted in devastating flood waters, causing 1,100 deaths and affecting 33m individuals.#_ftn17" name="_ftnref17" title="">[17]
Barriers to upskilling Pakistan
Employees in our survey point to a lack of time (37.3%) and poor workplace culture of learning (32%) as barriers to acquiring new skills. These findings are relevant as most employees report workplace training (54.7%) as a key source of learning new digital skills, emphasising the need for more skilling opportunities in offices.
Another key issue, Mr Gilani says, is the mismatch between university course offerings and industry demand. “There is a high tendency for unemployment among the highly educated youth, stemming from problems in our education system—we don’t see universities inviting companies to tell students what they are looking for and employers aren’t sharing information with educational institutes”. In addition to focusing on university degrees, employers could also consider employees’ skillsets as an important signal for hiring new talent. Nearly 67% of surveyed employees believe that employers in Pakistan are hiring based on skills-based qualifications rather than full-time degrees.
Distinct expectations from government and employers
Faced with the high costs of reskilling and upskilling, more than half (52%) of employees consider the government responsible for providing financial incentives for upskilling. For instance, 29.3% cite government subsidies as a major motivator for acquiring specific skills such as green skills. Providing funding for green skills can bolster Pakistan’s capacity to adapt to a changing climate, says Mr Gilani. He suggests that greater investments in green skills and industries could improve the country’s access to renewable energy sources, reduce its climate resilience and create jobs.
Across all skill types, employers also have an instrumental role in upskilling and reskilling employees. More than four in ten survey respondents say employers have a role to play in providing access to diversified skilling programmes (42.7%) and information on the skills needed for different roles (41.3%). Over a third of employees also consider the government responsible for providing information on skills needed for different roles.
Leaving no one behind
Pakistan is undergoing a pivotal shift in its economy as digital transformation gains momentum. A large part of its success will hinge on leaving no one behind and giving an equal opportunity to everyone including women, young graduates and freelancers, which will boost the country's workforce significantly. Mr Gilani highlights the importance of government’s leadership and direction in providing an overall direction to this skills ecosystem, “If there is consistent leadership, digital skilling policy and an ecosystem, then things can be done.” And while digital skills will continue to be important as the country grows and digitalises in the next few years, analytical and soft skills will be equally important.
#_ftnref1" name="_ftn1" title="">[1]https://dailytimes.com.pk/818869/pakistan-becomes-the-4th-fastest-growin... #_ftnref2" name="_ftn2" title="">[2] Basic digital skills are defined in the survey as the ability to operate basic office software, i.e. Microsoft Office, and/or set up Internet and digital communication tools. #_ftnref3" name="_ftn3" title="">[3] Pakistan is the third-fastest growing freelancer market globally. [Source: http://onlinelabourobservatory.org/oli-supply/] #_ftnref4" name="_ftn4" title="">[4]https://www.pta.gov.pk/en/telecom-indicators #_ftnref5" name="_ftn5" title="">[5] https://www.gsma.com/asia-pacific/wp-content/uploads/2022/11/Making-Digi... #_ftnref6" name="_ftn6" title="">[6] https://onlinelibrary.wiley.com/doi/epdf/10.1111/rode.12994 #_ftnref7" name="_ftn7" title="">[7]#Female_Literacy_Rate_In_Pakistan_2022">https://ilm.com.pk/pakistan/pakistan-information/male-and-female-literac... #_ftnref8" name="_ftn8" title="">[8] https://tribune.com.pk/story/2322073/literacy-and-pakistan #_ftnref9" name="_ftn9" title="">[9] 2021 World Bank estimates, https://www.worldbank.org/en/results/2022/07/07/supporting-legal-reforms... #_ftnref10" name="_ftn10" title="">[10] https://tribune.com.pk/story/2342344/over-31-of-educated-youth-unemployed-reveals-pide #_ftnref11" name="_ftn11" title="">[11] https://accesspartnership.com/pakistans-pkr97-trillion-digital-potential/ #_ftnref12" name="_ftn12" title="">[12] https://www.thenews.com.pk/print/887910-govt-eyes-3bln-from-freelancing-it-exports-by-2024 #_ftnref13" name="_ftn13" title="">[13] https://erozgar.pitb.gov.pk/ #_ftnref14" name="_ftn14" title="">[14] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref15" name="_ftn15" title="">[15] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref16" name="_ftn16" title="">[16] https://edition.cnn.com/2022/08/30/asia/pakistan-climate-crisis-floods-justice-intl/index.html #_ftnref17" name="_ftn17" title="">[17] https://www.weforum.org/agenda/2022/09/pakistan-floods-what-role-did-climate-change-play/Bridging the skills gap: Fuelling careers and the economy in Indonesia
Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Indonesia, between November 2022 and January 2023. It also interviewed employers and industry experts across the region to understand their perspectives on skills gaps, as well as reskilling and upskilling aspirations.
The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.
The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.
This article—one in a series of 12 market reports—examines these issues in Indonesia. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Indonesian employees consider digital skills (60%) the top focus area for upskilling. Among these, basic digital skills are foundational for 88.3% of Indonesian workers. As digitalisation spreads across the archipelago, the country will increasingly demand more advanced skills. Employees consider capabilities with data analysis and visualisation (56.7%), IT support (51.7%), and digital marketing and e-commerce (48.3%) as the most important advanced tech skills to have. Workers have the highest expectations for their employers, believing they should support their development by providing information on skills (57%), through financial incentives (54%), recognition (43%) and supporting their mental well-being (35%).Indonesia is one of Southeast Asia’s fastest-growing internet economy. Between 2015 and 2019, its technology sector grew at an average rate of 49% a year, alongside rapid e-commerce adoption by both large and small businesses.1 The economy’s digitalisation has enabled many in the workforce, especially the young, to participate as freelancers, particularly in the transportation and delivery sectors.2
However, many have been left out due to uneven internet connectivity and low literacy rates. For instance, most internet users tend to be concentrated in urban centres and are young—only 21% are over 50 years old.3 The issues are not just limited to the older population, as almost a quarter of young people (22.5%) in Indonesia are not in education, employment or training4 and the World Bank estimates that only 19% of 25-34 year olds had a tertiary qualification in 2021, much lower than the global average of 47%.5
The future of Indonesia’s economy is digital
Most Indonesian employees (60%) consider digital skills the most important to acquire. This is in sync with the digitalisation underway in the economy — Indonesia’s digitally skilled workers are forecast to contribute US$303.4bn to its GDP by 2030, accounting for 16% of GDP.6
Government analysis shows that the expanding technology sector could create 20m-45m new jobs in Indonesia.7 Between 2019 and 2030, non-tech sectors such as professional services, manufacturing and construction — are expected to see the highest growth in GDP contributions from digitally skilled workers, as these sectors increasingly adopt technology to improve their productivity.8
Figure 1: Digital skills are a top priority for Indonesian employees
Which skill categories do you think are the most important for the workforce in your sector to acquire today? (%)
Source: Economist Impact, 2023
Within the broad category of digital skills, employees in our survey consider advanced digital skills such as data analysis and visualisation (56.7%), IT support (51.7%), and digital marketing and e-commerce (48.3%) as must-have skills. Employees also said the same for coding and programming (26.7%) and artificial intelligence (AI) and machine learning (25%). The importance given to these advanced skills possibly reflects a skills gap, as data from 2020 suggest that less than 1% of the workforce in the country possessed advanced digital skills.9
Advanced digital skills are becoming more important for various sectors too. For instance, big data analytics skills are increasingly used in the banking sector to understand customers’ spending patterns and preferences, to cross-sell products and for fraud management.10 Similarly, AI is expected to improve care delivery and hospital operations.11 Meanwhile, farmers are benefitting in myriad ways from real-time monitoring and prediction systems with Internet of Things-enabled tools.12
Cybersecurity is another must-have advanced digital skill for 36.7% of employees, reflecting Indonesia’s struggles with digital risks. The country was ranked the most vulnerable in Southeast Asia for cyber risks, and faced more than 11m attacks in the first quarter of 2022 alone.13
Although green skills such as sustainability reporting, sustainable business management and supply chain management are considered less important at present(15%), these skills would gain importance due to the country's rising sustainability concerns. Indonesia is ranked among the top countries exposed to climate risks with high vulnerability to all types of flooding and extreme heat. 14
Figure 2: Advanced digital skills such as data analysis and visualisation, and IT support are must-haves
Indicate which specific types of digital skills are must-have, good to have or not needed for the workforce in your sector today (%)
Source: Economist Impact, 2023
Infrastructure and high costs complicate access to skilling
Employees in Indonesia are strongly motivated to acquire new skills. Nearly half (49%) of the employees agree that upskilling or reskilling has had a high impact in improving performance in their current roles, and 54% report a high impact in exploring new roles and areas of interest. Despite these motivations, more than one in four (27%) employees cite poor internet access as a barrier in acquiring new digital skills. Nila Marita, director and head of external affairs at GoTo—the holding company of two major Indonesian startups, Gojek and Tokopedia—agrees that internet connectivity is “crucial to increase access to important learning opportunities in Indonesia and bridging this gap will enable more Indonesians to acquire digital skills.” Addressing access is important, as employees utilise online courses for learning. Indeed, 54% of employees say they obtain digital skills outside of the workplace via online courses.
High costs (42%) are also a major hurdle in Indonesians’ ability to digitally upskill, and companies are not investing enough to provide workers with on-the-job training.15 Additionally, Indonesia has a large, informal sector made up of low-income workers, creating challenges for employees to afford skilling programmes and for the government to reach them.16 17
Figure 3: Key skilling obstacles for employees across skills types
What are the top three significant obstacles that you face while learning new skills?
Source: Economist Impact, 2023
Another challenge that employees cite across most skill sets is a lack of time in learning new courses. Indonesian workers have reported experiencing higher workload after the Covid-19 pandemic.18 This also aligns with the higher importance that employees in our survey assign to self-management skills like time management, resilience and stress tolerance (49%).
High expectations from employers
According to our survey respondents, employers are the most responsible for supporting their development across every category apart from providing access to diversified skilling programmes. In particular, they see their employers as a key source of providing information on skills (57%), financial incentives (54%), recognition (43%) and support for their mental well-being (35%).
Employers could address many of the obstacles that employees face such as high costs and time restrictions by subsidising access to training programmes and integrating more workplace training sessions. “Both the government and private sector in Indonesia have been scaling up efforts to develop the country’s talent pool in recent years,” says Ms Marita from GoTo. For instance, organisations and the government are increasingly collaborating with universities to prepare university students with in-demand skills. Private sector companies are also training the trainers and working together with them to design the curriculum based on companies’ skills needs.
Figure 4: Employers are considered the most responsible for upskilling Indonesians
In your opinion who is responsible for supporting employees regarding the following issues? (%)
Source: Economist Impact, 2023
Seventy-seven percent of employees, substantially higher than the regional average (66.5%), believe that employers now lean towards skills-based hiring over paper qualifications. In this context, efforts by government, educational institutions and companies to communicate what skills are in-demand will help the workforce prioritise which ones to learn. While most workers rely on social media and advertisements (73%) for information on valuable skills, government awareness programmes are also an important source for 50% of employees.
Multi-stakeholder collaboration key to closing skills gaps
Overcoming access and infrastructure gaps is integral to realising Indonesia’s digital economic potential. The government has made efforts to counteract these issues through various programmes such as Kartu Prakerja, an online upskilling programme targeted at retraining one million unemployed and low-income adults who are 18-64 years old.19 20 The programme takes an end-to-end approach, providing access to upskilling and reskilling subsidies, courses and job vacancies. Subsidies can also be useful in driving the uptake of green skills, which acts as the biggest motivation to acquire these skills for one in three surveyed employees. Another programme provided by Indonesia’s Ministry of Communications and Information is the Digital Talent Scholarship (DTS). It aims to develop the skills and competitiveness of the country’s workforce in the information and communication technology sector.21
For Indonesia to fully unlock the economic potential of digital skilling, it must extend this kind of opportunity to workers at micro, small and medium enterprises which employ 97% of the country’s workforce.22
Another government programme is Making Indonesia 4.0, a roadmap launched in 2018 to accelerate digitalisation.23 Elements of this roadmap are geared towards training and reskilling workers as technology becomes more ingrained in industrial processes. Additionally, attempts to broaden equitable access to digital skilling opportunities could close the skills gaps.
References
1 https://digitalcfoasia.com/2023/01/10/addressing-the-critical-skill-gaps-in-indonesia/
2 https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-Report-Indonesia-2021-accessible.pdf
3 https://smeru.or.id/en/publication/diagnostic-report-digital-skills-landscape-indonesia
4 https://data.worldbank.org/indicator/SL.UEM.NEET.ZS?locations=ID
5 https://gpseducation.oecd.org/CountryProfile?primaryCountry=IDN&treshold=5&topic=EO
6 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf
7 https://opengovasia.com/creating-million-new-jobs-through-digital-technology-in-indonesia/
8 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf
9 https://pathwayscommission.bsg.ox.ac.uk/sites/default/files/2022-03/FINAL_Diagnostic%20Report_Accessible.pdf
10 https://www.sciencedirect.com/science/article/pii/S1877050915005992
11 https://www.usa.philips.com/healthcare/nobounds/phoenix-childrens-benefits-of-ai-in-healthcare#_continue-reading
12 https://www.xcubelabs.com/blog/benefits-of-iot-in-agriculture-and-smart-farming/
13 https://en.antaranews.com/news/227061/indonesia-faces-11-mln-cyber-attacks-in-2022-first-quarter
14 https://www.adb.org/sites/default/files/publication/700411/climate-risk-country-profile-indonesia.pdf
15 https://www.weforum.org/agenda/2022/11/indonesia-edtech-financial-inclusion/
16 An informal economy broadly refers to any part of the economy that is unregistered, meaning that they are not covered or are insufficiently covered by formal employment arrangements. In most of these cases, companies remain largely unaccountable to any regulation as workers are not officially classed as employees, limiting their access to government services, including welfare, labour rights protections and public programmes. In Indonesia, 60% of the workforce is employed by the informal sector and accounts for 22.7% of national GDP (US$776 billion).
17 https://www.ilo.org/jakarta/areasofwork/informal-economy/lang--en/index.htm
18 https://en.prnasia.com/releases/apac/68-of-indonesia-s-employees-willing-to-forgo-higher-salaries-or-job-promotions-for-work-life-balance-michael-page-366002.shtml
19 https://www.prakerja.go.id/
20 https://money.kompas.com/read/2023/01/06/123000126/kartu-prakerja-2023-target-anggaran-dan-pelaksanaan-pelatihannya-
21 https://digitalent.kominfo.go.id/program
22 https://www.weforum.org/agenda/2022/05/digitalization-growth-indonesia-msmes/
23 https://kemenperin.go.id/artikel/23388/Kemenperin:-Revolusi-Industri-4.0-Optimalkan-Potensi--Indonesia-di-Sektor-Manufaktur
Menjembatani kesenjangan keterampilan: Menumbuhkan karier dan ekonomi di In...
Menjembatani kesenjangan keterampilan: Menumbuhkan karier dan ekonomi di Indonesia
Economist Impact, yang didukung oleh Google, melaksanakan survei yang melibatkan 1,375 karyawan di Asia Pasifik (APAC), termasuk 100 karyawan dari Indonesia antara November 2022 dan Januari 2023. Lembaga tersebut juga mewawancarai perusahaan dan pakar industri di wilayah tersebut untuk memahami pandangan mereka tentang kesenjangan keterampilan, serta keinginan untuk melaksanakan reskilling (pelatihan bagi karyawan untuk memperoleh kemampuan baru) dan upskilling (pelatihan bagi karyawan untuk meningkatkan kemampuan yang sudah ada).
Para responden survei diambil dari 14 negara di Asia Pasifik, yang terdiri atas 11.8% Gen Z (lahir pada tahun 1997-2012), 63.2% Milenial (1981-96), dan 25% Gen X (1965-80). Mereka bekerja di berbagai industri.
Penelitian tersebut menunjukkan bahwa di seluruh wilayah di Asia Pasifik, perusahaan dan karyawan sama-sama kurang memahami keterampilan di masa depan dan cara terbaik untuk mengembangkannya. Pada sebagian kasus, juga terdapat perbedaan ekspektasi antara apa yang diinginkan oleh perusahaan dan apa yang dipandang oleh karyawan sebagai hal yang penting. Memahami kesenjangan ini sangat penting dalam mewujudkan tenaga kerja yang siap untuk ekonomi di masa mendatang.
Artikel ini—salah satu dari seri 12 laporan negara—membedah berbagai masalah ini di Indonesia. Seri ini melengkapi makalah penelitian yang membahas tentang reskilling dan upskilling yang sangat penting di wilayah APAC.
Temuan utama
Karyawan Indonesia menganggap keterampilan digital (60%) merupakan area fokus utama untuk upskilling. Di antara semua ini, beberapa keterampilan digital dasar adalah hal utama bagi 88.3% pekerja Indonesia. Seiring pemerataan digitalisasi, keterampilan yang lebih tinggi akan semakin dibutuhkan di setiap negara. Karyawan menganggap kemampuan analisis dan visualisasi data (56.7%), IT support(51.7%), serta pemasaran digital dan e-commerce (48.3%) adalah keterampilan teknologi tinggi yang sangat penting untuk dimiliki. Para pekerja memiliki ekspektasi yangtinggi dari perusahaan mereka dan yakin bahwa perusahaan harus mendukung perkembangan mereka dengan menyediakan informasi tentang keterampilan (57%), melalui insentif finansial (54%), penghargaan (43%), dan mendukung kesehatan mental mereka (35%).Indonesia adalah salah satu negara dengan pertumbuhan ekonomi internet tercepat di Asia Tenggara. Antara 2015 dan 2019, laju pertumbuhan rata-rata sektor teknologi di negara tersebut adalah 49% per tahun, di samping adopsi e-commerce oleh perusahaan besar dan kecil.1 Digitalisasi ekonomi ini telah memungkinkan tenaga kerja, terutama yang lebih muda, untuk berpartisipasi sebagai pekerja lepas, terutama di sektor transportasi dan pengantaran barang.2
Namun demikian, banyak yang tertinggal karena konektivitas internet yang tidak merata dan tingkat literasi yang rendah. Misalnya, sebagian besar pengguna internet terkonsentrasi di daerah pusat perkotaan dan berusia muda—hanya 21% yang berusia di atas 50 tahun.3 Berbagai masalah ini tidak hanya terjadi pada populasi yang berusia lebih tua, karena hampir seperempat anak-anak muda (22.5%) di Indonesia tidak mengenyam pendidikan, memiliki pekerjaan, atau mendapatkan pelatihan4. Selain itu, Bank Dunia memperkirakan bahwa hanya 19% orang-orang yang berusia 25-34 tahun lulus dari pendidikan tinggi pada 2021, jauh lebih rendah dari rata-rata global sebesar 47%.5
Masa depan ekonomi Indonesia adalah digital
Sebagian besar karyawan di Indonesia (60%) menganggap keterampilan digital adalah yang terpenting. Ini selaras dengan digitalisasi yang berlangsung di bidang ekonomi. Pekerja yang memiliki keterampilan digital di Indonesia diperkirakan memberikan kontribusi sebesar 303.4 miliar dolar AS terhadap PDB negara tersebut pada 2030, atau 16% dari PDB.6
Analisis pemerintah menunjukkan bahwa sektor teknologi yang berkembang dapat menciptakan 20 juta hingga 45 juta pekerjaan baru di Indonesia.7 Antara 2019 dan 2030, sektor non teknologi, seperti layanan profesional, manufaktur dan konstruksi, diperkirakan mengalami pertumbuhan tertinggi dalam hal kontribusi dari pekerja yang memiliki keterampilan digital, karena semua sektor ini semakin mengadopsi teknologi untuk meningkatkan produktivitas.8
Gambar 1: Keterampilan digital adalah prioritas utama bagi karyawan Indonesia
Kategori keterampilan mana yang menurut Anda paling penting bagi tenaga kerja di sektor Anda saat ini? (%)
Sumber: Economist Impact, 2023
Dalam kategori keterampilan digital yang luas, karyawan dalam survei kami memandang keterampilan digital tingkat tinggi, seperti analisis dan visualisasi data (56.7%), dukungan TI (51.7%), serta pemasaran digital dan e-commerce (48.3%) adalah keterampilan yang wajib dimiliki. Mereka juga memiliki pandangan yang sama untuk coding dan pemrograman (26.7%), serta kecerdasan buatan (artificial intelligence/AI) dan pembelajaran mesin (25%). Karena keterampilan tingkat tinggi ini dianggap penting, hal ini mungkin mencerminkan kesenjangan keterampilan, karena data yang diperoleh pada tahun 2020 menunjukkan bahwa kurang dari 1% tenaga kerja di Indonesiamemiliki keterampilan digital tingkat tinggi.9
Keterampilan digital tingkat tinggijuga menjadi semakin penting bagi beragam sektor. Misalnya, keterampilan analitik mahadata (big data) semakin banyak digunakan di sektor perbankan untuk memahami pola dan preferensi pengeluaran pelanggan, untuk melakukan penjualan silang produk, dan untuk mengatasi kecurangan.10 Demikian pula, AI diharapkan meningkatkan perawatan dan operasional di rumah sakit.11 Sementara itu, para petani mendapatkan manfaat dari berbagai cara, mulai dari sistem pemantauan waktu nyata dan prediksi dengan alat yang didukung oleh Internet of Things (Internet untuk Segala).12
Keamanan siber adalah keterampilan digital tingkat tinggi yang harus dimiliki bagi 36,7% karyawan, yang menunjukkan bahwa Indonesia menghadapi tantangan dalam hal risiko digital. Indonesiamenduduki peringkat tertinggi di Asia Tenggara dalam hal risiko siber dan menghadapi lebih dari 11 juta serangan pada kuartal pertama di tahun 2022.13
Walaupun keterampilan pelestarian lingkungan, seperti pelaporan keberlanjutan, manajemen bisnis berkelanjutan, dan manajemen rantai pasokan tidak dianggap lebih penting (15%), keterampilan ini akan semakin penting karena meningkatnya kekhawatiran terkait keberlanjutan di negara tersebut. Indonesia adalah salah satu negara yang paling terpapar oleh risiko iklim, dengan tingkat kerentanan yang tinggi terhadap semua jenis banjir dan panas ekstrem. 14
Gambar 2: Keterampilan digital tingkat tinggi, seperti analisis dan visualisasi data, serta dukungan TI wajib dimiliki
Sebutkan jenis keterampilan digital yang wajib dimiliki, sebaiknya dimiliki, atau tidak diperlukan bagi tenaga kerja di sektor Anda saat ini (%)
Sumber: Economist Impact, 2023
Infrastruktur dan biaya yang tinggi menghambat akses ke peningkatan keterampilan
Karyawan di Indonesia sangat termotivasi untuk memperoleh keterampilan baru. Hampir separuh (49%) karyawan setuju bahwa upskilling atau reskilling berdampak tinggi terhadap peningkatan kinerja dalam pekerjaan mereka saat ini, dan 54% menyatakan bahwa hal tersebut berdampak tinggi dalam mengeksplorasi peran baru dan bidang minat mereka. Lebih dari satu dalam empat (27%) karyawan mengatakan bahwa akses internet yang buruk merupakan hambatan dalam memperoleh keterampilan digital yang baru. Nila Marita, direktur dan kepala urusan eksternal di GoTo—perusahaan induk dari dua perusahaan rintisan di Indonesia, Gojek and Tokopedia—setuju bahwa konektivitas internet “sangat penting untuk memperluas akses ke kesempatan belajar dan menjembatani kesenjangan ini agar lebih banyak penduduk Indonesia yang memperoleh keterampilan digital.” Mengatasi masalah akses adalah hal yang penting, karena karyawan memanfaatkan pelatihan online untuk belajar. Malahan, 54% karyawan mengatakan bahwa mereka memperoleh keterampilan digital di luar tempat kerja melalui pelatihan online.
Biaya yang tinggi (42%) juga merupakan hambatan utama bagi penduduk Indonesia untuk memperoleh keterampilan digital, dan perusahaan tidak cukup berinvestasi dalam menyediakan pelatihan bagi para pekerja.15 Selain itu, Indonesia memiliki sektor informal yang besar, yang menjadi mata pencaharian pekerja berpendapatan rendah, sehingga menimbulkan tantangan bagi karyawan untuk mengikuti program peningkatan keterampilan dan bagi pemerintah untuk menjangkau mereka.16 17
Gambar 3: Hambatan utama peningkatan keterampilan bagi karyawan di seluruh jenis keterampilan
Apa saja tiga hambatan utama yang Anda hadapi dalam mempelajari keterampilan baru? (%)
Sumber: Economist Impact, 2023
Tantangan lain yang disebutkan karyawan di sebagian besar keterampilan adalah tidak adanya waktu untuk mengikuti pelatihan baru. Para pekerja Indonesia menyatakan bahwa mereka memiliki beban kerja yang lebih tinggi setelah pandemi covid-19.18 Hal ini juga menunjukkan bahwa semakin pentingnya keterampilan manajemen mandiri, seperti manajemen waktu, resiliensi, dan toleransi terhadap stres (49%) bagi karyawan yang dilibatkan dalam survei kami.
Ekspektasi tinggi dari perusahaan
Menurut karyawan, perusahaan wajib mendukung perkembangan mereka di setiap kategori, selain menyediakan akses ke program peningkatan keterampilan yang beragam. Secara khusus, karyawan memandang perusahaan sebagai sumber utama informasi tentang keterampilan (57%), insentif finansial (54%), penghargaan (43%), dan dukungan bagi kesejahteraan mereka (35%).
Perusahaan dapat mengatasi berbagai hambatan yang dihadapi karyawan, seperti biaya yang tinggi dan keterbatasan waktu dengan menyubsidi akses ke program pelatihan dan mengintegrasikan lebih banyak sesi pelatihan di tempat kerja. “Baik pemerintah maupun sektor swasta di Indonesia telah meningkatkan upaya untuk mengembangkan kumpulan talenta beberapa tahun belakangan ini,” kata Marita dari GoTo. Misalnya, organisasi dan pemerintah meningkatkan kolaborasi dengan universitas untuk membekali mahasiswa dengan keterampilan yang diperlukan. Perusahaan swasta juga berupaya meningkatkan kemampuan instruktur dan bekerja sama dengan mereka untuk merancang kurikulum berdasarkan kebutuhan keterampilan perusahaan.
Gambar 4: Perusahaan dianggap paling bertanggung jawab untuk melaksanakan upskilling bagi penduduk Indonesia
Menurut Anda, siapa yang bertanggung jawab dalam mendukung karyawan terkait masalah-masalah berikut? (%)
Sumber: Economist Impact, 2023
Tujuh puluh tujuh persen, atau lebih tinggi dari rata-rata regional (66.5%), meyakini bahwa perusahaan saat ini lebih condong ke perekrutan berbasis keterampilan dibandingkan kualifikasi di atas kertas. Dalam konteks ini, upaya yang dilakukan pemerintah, lembaga pendidikan, dan perusahaan untuk mengomunikasikan keterampilan yang diperlukan, akan membantu tenaga kerja memprioritaskan keterampilan yang akan dipelajari. Sementara sebagian besar pekerja mengandalkan media sosial dan iklan (73%) untuk memperoleh informasi tentang keterampilan yang penting, program kesadaran pemerintah juga merupakan sumber penting bagi 50% karyawan.
Kolaborasi antarpemangku kepentingan adalah kunci untuk mengatasi kesenjangan keterampilan
Mengatasi kesenjangan akses dan infrastruktur adalah bagian yang tidak terpisahkan dalam mewujudkan potensi ekonomi digital Indonesia. Pemerintah telah melakukan upaya untuk mengatasi sejumlah masalah ini melalui berbagai program, seperti Kartu Prakerja, program upskilling online yang bertujuan memberikan pelatihan bagi satu juta orang dewasa menganggur dan berpendapatan rendah berusia 18-64 tahun.19 20 Program tersebut diselenggarakan dengan pendekatan menyeluruh, memberikan akses ke subsidi upskilling dan reskilling, pelatihan, dan lapangan kerja. Subsidi juga dapat bermanfaat dalam mendorong penyerapan keterampilan pelestarian lingkungan, yang menjadi motivasi terbesar untuk memperoleh keterampilan ini bagi satu dari tiga karyawan yang mengikuti survei. Program lain yang dilaksanakan oleh Kemeterian Komunikasi dan Informatika adalah Beasiswa Talenta Digital (Digital Talent Scholarship/DTS). Program tersebut bertujuan mengembangkan keterampilan dan meningkatkan daya saing tenaga kerja di Indonesia di sektor teknologi informasi dan komunikasi.21
Agar Indonesia dapat memaksimalkan potensi pemerolehan keterampilan digital, negara tersebut harus memperluas kesempatan ini bagi pekerja di usaha mikro, kecil, dan menengah (UMKM) yang menaungi 97% tenaga kerja di negara tersebut.22
Program pemerintah lain adalah Making Indonesia 4.0, sebuah peta jalan yang diluncurkan pada 2018 untuk mengakselerasi digitalisasi.23 Sejumlah elemen peta jalan ini disiapkan untuk membekali karyawan dengan pelatihan dan reskilling, karena teknologi semakin menjadi bagian yang tidak terpisahkan dalam proses industri. Selain itu, harus ada upaya untuk memperluas pemerataan akses ke peluang pengembangan keterampilan digital guna mengatasi kesenjangan keterampilan.
References
1 https://digitalcfoasia.com/2023/01/10/addressing-the-critical-skill-gaps-in-indonesia/
2 https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-Report-Indonesia-2021-accessible.pdf
3 https://smeru.or.id/en/publication/diagnostic-report-digital-skills-landscape-indonesia
4 https://data.worldbank.org/indicator/SL.UEM.NEET.ZS?locations=ID
5 https://gpseducation.oecd.org/CountryProfile?primaryCountry=IDN&treshold=5&topic=EO
6 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf
7 https://opengovasia.com/creating-million-new-jobs-through-digital-technology-in-indonesia/
8 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf
9 https://pathwayscommission.bsg.ox.ac.uk/sites/default/files/2022-03/FINAL_Diagnostic%20Report_Accessible.pdf
10 https://www.sciencedirect.com/science/article/pii/S1877050915005992
11 https://www.usa.philips.com/healthcare/nobounds/phoenix-childrens-benefits-of-ai-in-healthcare#_continue-reading
12 https://www.xcubelabs.com/blog/benefits-of-iot-in-agriculture-and-smart-farming/
13 https://en.antaranews.com/news/227061/indonesia-faces-11-mln-cyber-attacks-in-2022-first-quarter
14 https://www.adb.org/sites/default/files/publication/700411/climate-risk-country-profile-indonesia.pdf
15 https://www.weforum.org/agenda/2022/11/indonesia-edtech-financial-inclusion/
16 Secara umum, ekonomi informal merujuk pada ekonomi yang tidak terdaftar, yang berarti bahwa mereka tidak mendapatkan atau tidak cukup mendapatkan tunjangan kerja formal. Perusahaan pada umumnya tidak mematuhi peraturan, karena para pekerja tersebut tidak digolongkan secara resmi sebagai karyawan, sehingga membatasi akses mereka ke layanan pemerintah, termasuk kesejahteraan, perlindungan hak pekerja, dan program publik. Di Indonesia, 60% karyawan dipekerjakan oleh sektor informal dan memberikan kontribusi sebesar 22,7% terhadap PDB nasional (776 miliar dolar AS).
17 https://www.ilo.org/jakarta/areasofwork/informal-economy/lang--en/index.htm
18 https://en.prnasia.com/releases/apac/68-of-indonesia-s-employees-willing-to-forgo-higher-salaries-or-job-promotions-for-work-life-balance-michael-page-366002.shtml
19 https://www.prakerja.go.id/
20 https://money.kompas.com/read/2023/01/06/123000126/kartu-prakerja-2023-target-anggaran-dan-pelaksanaan-pelatihannya-
21 https://digitalent.kominfo.go.id/program
22 https://www.weforum.org/agenda/2022/05/digitalization-growth-indonesia-msmes/
23 https://kemenperin.go.id/artikel/23388/Kemenperin:-Revolusi-Industri-4.0-Optimalkan-Potensi--Indonesia-di-Sektor-Manufaktur
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Through Q&As with luminaries in a number of sectors across the world, interviews aim to surface insights for policy makers, business leaders and other stakeholders as they consider actions to improve the quality of, and access to, education, to fortify their country’s economic, social and geopolitical fabric.
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About the research
Accelerating urban intelligence: People, business and the cities of tomorrow is an Economist Intelligence Unit report, sponsored by Nutanix. It explores expectations of citizens and businesses for smart-city development in some of the world’s major urban centres. The analysis is based on two parallel surveys conducted in 19 cities: one of 6,746 residents and another of 969 business executives. The cities included are Amsterdam, Copenhagen, Dubai, Frankfurt, Hong Kong, Johannesburg, London, Los Angeles, Mumbai, New York, Paris, Riyadh, San Francisco, São Paulo, Singapore, Stockholm, Sydney, Tokyo and Zurich.
Respondents to the citizen survey were evenly balanced by age (roughly one-third in each of the 18-38, 39-54 and 55 years and older age groups) and gender. A majority (56%) had household incomes above the median level in their city, with 44% below it. Respondents to the business survey were mainly senior executives (65% at C-suite or director level) working in a range of different functions. They work in large, midsize and small firms in over a dozen industries. See the report appendix for full survey results and demographics.
Additional insights were obtained from indepth interviews with city officials, smart-city experts at NGOs and other institutions, and business executives. We would like to thank the following individuals for their time and insights.
Pascual Berrone, academic co-director, Cities in Motion, and professor, strategic management, IESE Business School (Barcelona) Lawrence Boya, director, Smart City Programme, city of Johannesburg Amanda Daflos, chief innovation officer, city of Los Angeles Linda Gerull, chief information officer, city of San Francisco Praveen Pardeshi, municipal commissioner, Brihanmumbai Municipal Corporation (Mumbai) • Brian Roberts, policy analyst, city of San Francisco Sameer Sharma, global general manager, Internet of Things (IoT), Intel • Marius Sylvestersen, programme director, Copenhagen Solutions Lab Tan Kok Yam, deputy secretary of the Smart Nation and Digital Government, Prime Minister’s Office, SingaporeThe report was written by Denis McCauley and edited by Michael Gold.
Talent for innovation
Talent for innovation: Getting noticed in a global market incorporates case studies of the 34 companies selected as Technology Pioneers in biotechnology/health, energy/environmental technology, and information technology.
Leonardo Da Vinci unquestionably had it in the 15th century; so did Thomas Edison in the 19th century. But today, "talent for innovation" means something rather different. Innovation is no longer the work of one individual toiling in a workshop. In today's globalised, interconnected world, innovation is the work of teams, often based in particular innovation hotspots, and often collaborating with partners, suppliers and customers both nearby and in other countries.
Innovation has become a global activity as it has become easier for ideas and talented people to move from one country to another. This has both quickened the pace of technological development and presented many new opportunities, as creative individuals have become increasingly prized and there has been greater recognition of new sources of talent, beyond the traditional innovation hotspots of the developed world.
The result is a global exchange of ideas, and a global market for innovation talent. Along with growth in international trade and foreign direct investment, the mobility of talent is one of the hallmarks of modern globalisation. Talented innovators are regarded by companies, universities and governments as a vital resource, as precious as oil or water. They are sought after for the simple reason that innovation in products and services is generally agreed to be a large component, if not the largest component, in driving economic growth. It should be noted that "innovation" in this context does not simply mean the development of new, cutting-edge technologies by researchers.
It also includes the creative ways in which other people then refine, repackage and combine those technologies and bring them to market. Indeed, in his recent book, "The Venturesome Economy", Amar Bhidé, professor of business at Columbia University, argues that such "orchestration" of innovation can actually be more important in driving economic activity than pure research. "In a world where breakthrough ideas easily cross national borders, the origin of ideas is inconsequential," he writes. Ideas cross borders not just in the form of research papers, e-mails and web pages, but also inside the heads of talented people. This movement of talent is not simply driven by financial incentives. Individuals may also be motivated by a desire for greater academic freedom, better access to research facilities and funding, or the opportunity to work with key researchers in a particular field.
Countries that can attract talented individuals can benefit from more rapid economic growth, closer collaboration with the countries where those individuals originated, and the likelihood that immigrant entrepreneurs will set up new companies and create jobs. Mobility of talent helps to link companies to sources of foreign innovation and research expertise, to the benefit of both. Workers who emigrate to another country may bring valuable knowledge of their home markets with them, which can subsequently help companies in the destination country to enter those markets more easily. Analysis of scientific journals suggests that international co-authorship is increasing, and there is some evidence thatcollaborative work has a greater impact than work carried out in one country. Skilled individuals also act as repositories of knowledge, training the next generation and passing on their accumulated wisdom.
But the picture is complicated by a number of concerns. In developed countries which have historically depended to a large extent on foreign talent (such as the United States), there is anxiety that it is becoming increasingly difficult to attract talent as new opportunities arise elsewhere. Compared with the situation a decade ago, Indian software engineers, for example, may be more inclined to set up a company in India, rather than moving to America to work for a software company there. In developed countries that have not historically relied on foreign talent (such as Germany), meanwhile, the ageing of the population as the birth rate falls and life expectancy increases means there is a need to widen the supply of talent, as skilled workers leave the workforce and young people show less interest than they used to in technical subjects. And in developing countries, where there is a huge supply of new talent (hundreds of thousands of engineers graduate from Indian and Chinese universities every year), the worry is that these graduates have a broad technical grounding but may lack the specialised skills demanded by particular industries.
Other shifts are also under way. The increasing sophistication of emerging economies (notably India and China) is overturning the old model of "create in the West, customise for the East". Indian and Chinese companies are now globally competitive in many industries. And although the mobility of talent is increasing, workers who move to another country are less likely to stay for the long-term, and are more likely to return to their country of origin. The number of Chinese students studying abroad increased from 125,000 in 2002 to 134,000 in 2006, for example, but the proportion who stayed in the country where they studied after graduating fell from 85% to 69% over the same period, according to figures from the OECD (see page 10).
What is clear is that the emergence of a global market for talent means gifted innovators are more likely to be able to succeed, and new and unexpected opportunities are being exploited, as this year's Technology Pioneers demonstrate. They highlight three important aspects of the global market for talent: the benefits of mobility, the significant role of diasporas, and the importance of network effects in catalysing innovation.
Brain drain, or gain?
Perhaps the most familiar aspect of the debate about flows of talent is the widely expressed concern about the "brain drain" from countries that supply talented workers. If a country educates workers at the taxpayers' expense, does it not have a claim on their talent? There are also worries that the loss of skilled workers can hamper institutional development and drive up the cost of technical services. But such concerns must be weighed against the benefits of greater mobility.
There are not always opportunities for skilled individuals in their country of birth. The prospect of emigration can encourage the development of skills by individuals who may not in fact decide to emigrate. Workers who emigrate may send remittances back to their families at home, which can be a significant source of income and can help to alleviate poverty. And skilled workers may return to their home countries after a period working abroad, further stimulating knowledge transfer and improving the prospects for domestic growth, since they will maintain contacts with researchers overseas. As a result, argues a recent report from the OECD, it makes more sense to talk of a complex process of "brain circulation" rather than a one-way "brain drain". The movement of talent is not simply a zero-sum gain in which sending countries lose, and receiving countries benefit. Greater availability and mobility of talent opens up new possibilities and can benefit everyone.
Consider, for example, BioMedica Diagnostics of Windsor, Nova Scotia. The company makes medical diagnostic systems, some of them battery-operated, that can be used to provide health care in remote regions to people who would otherwise lack access to it. It was founded by Abdullah Kirumira, a Ugandan biochemist who moved to Canada in 1990 and became a professor at Acadia University. There he developed a rapid test for HIV in conjunction with one of his students, Hermes Chan (a native of Hong Kong who had moved to Canada to study). According to the United States Centers for Disease Control, around one-third of people tested for HIV do not return to get the result when it takes days or weeks to determine. Dr Kirumira and Dr Chan developed a new test that provides the result in three minutes, so that a diagnosis can be made on the spot. Dr Kirumira is a prolific inventor who went on to found several companies, and has been described as "the pioneer of Nova Scotia's biotechnology sector".
Today BioMedica makes a range of diagnostic products that are portable, affordable and robust, making them ideally suited for use in developing countries. They allow people to be rapidly screened for a range of conditions, including HIV, hepatitis, malaria, rubella, typhoid and cholera. The firm's customers include the World Health Organisation. Providing such tests to patients in the developing world is a personal mission of Dr Kirumira's, but it also makes sound business sense: the market for invitro diagnostics in the developing world is growing by over 25% a year, the company notes, compared with growth of only 5% a year in developed nations.
Moving to Canada gave Dr Kirumira research opportunities and access to venture funding that were not available in Uganda. His innovations now provide an affordable way for hospitals in his native continent of Africa to perform vital tests. A similar example is provided by mPedigree, a start-up that has developed a mobile-phone-based system that allows people to verify the authenticity of medicines. Counterfeit drugs are widespread in the developing world: they are estimated to account for 10-25% of all drugs sold, and over 80% in some countries. The World Health Organisation estimates that a fake vaccine for meningitis, distributed in Niger in 1995, killed over 2,500 people. mPedigree was established by Bright Simons, a Ghanaian social entrepreneur, in conjunction with Ashifi Gogo, a fellow Ghanaian. The two were more than just acquaintances having met at Secondary School. There are many high-tech authentication systems available in the developed world for drug packaging, involving radio-frequency identification (RFID) chips, DNA tags, and so forth.
The mPedigree system developed my Mr Gogo, an engineering student, is much cheaper and simpler and only requires the use of a mobile phone — an item that is now spreading more quickly in Africa than in any other region of the world. Once the drugs have been purchased, a panel on the label is scratched off to reveal a special code. The patient then sends this code, by text message, to a particular number. The code is looked up in a database and a message is sent back specifying whether the drugs are genuine. The system is free to use because the drug companies cover the cost of the text messages. It was launched in Ghana in 2007, and mPedigree's founders hope to extend it to all 48 sub-Saharan African countries within a decade, and to other parts of in the developing world.
The effort is being supported by Ghana's Food and Drug Board, and by local telecoms operators and drug manufacturers. Mr Gogo has now been admitted into a special progamme at Dartmouth College in the United States that develops entrepreneurial skills, in addition to technical skills, in engineers. Like Dr Kirumira, he is benefiting from opportunities that did not exist in his home country, and his country is benefiting too. This case of mPedigree shows that it is wrong to assume that the movement of talent is one-way (from poor to rich countries) and permanent. As it has become easier to travel and communications technology has improved, skilled workers have become more likely to spend brief spells in other countries that provide opportunities, rather than emigrating permanently.
And many entrepreneurs and innovators shuttle between two or more places — between Tel Aviv and Silicon Valley, for example, or Silicon Valley and Hsinchu in Taiwan — in a pattern of "circular" migration, in which it is no longer meaningful to distinguish between "sending" and "receiving" countries.
The benefits of a diaspora
Migration (whether temporary, permanent or circular) to a foreign country can be facilitated by the existence of a diaspora, since it can be easier to adjust to a new culture when you are surrounded by compatriots who have already done so. Some observers worry that diasporas make migration too easy, in the sense that they may encourage a larger number of talented individuals to leave their home country than would otherwise be the case, to the detriment of that country.
But as with the broader debate about migration, this turns out to be only part of the story. Diasporas can have a powerful positive effect in promoting innovation and benefiting the home country. Large American technology firms, for example, have set up research centres in India in part because they have been impressed by the calibre of the migrant Indian engineers they have employed in America. Diasporas also provide a channel for knowledge and skills to pass back to the home country.
James Nakagawa, a Canadian of Japanese origin and the founder of Mobile Healthcare, is a case in point. A third-generation immigrant, he grew up in Canada but decided in 1994 to move to Japan, where he worked for a number of technology firms and set up his own financial-services consultancy. In 2000 he had the idea that led him to found Mobile Healthcare, when a friend was diagnosed with diabetes and lamented that he found it difficult to determine which foods to eat, and which to avoid.
The rapid spread of advanced mobile phones in Japan, a world leader in mobile telecoms, prompted Mr Nakagawa to devise Lifewatcher, Mobile Healthcare's main product. It is a "disease selfmanagement system" used in conjunction with a doctor, based around a secure online database that can be accessed via a mobile phone. Patients record what medicines they are taking and what food they are eating, taking a picture of each meal. A database of common foodstuffs, including menu items from restaurants and fast-food chains, helps users work out what they can safely eat. Patients can also call up their medical records to follow the progress of key health indicators, such as blood sugar, blood pressure, cholesterol levels and calorie intake.
All of this information can also be accessed online by the patient's doctor or nutritionist. The system allows people with diabetes or obesity (both of which are rapidly becoming more prevalent in Japan and elsewhere) to take an active role in managing their conditions. Mr Nakagawa did three months of research in the United States and Canada while developing Lifewatcher, which was created with support from Apple (which helped with hardware and software), the Japanese Red Cross and Japan's Ministry of Health and Welfare (which provided full access to its nutritional database).
Japanese patients who are enrolled in the system have 70% of the cost covered by their health insurance. Mr Nakagawa is now working to introduce Lifewatcher in the United States and Canada, where obesity and diabetes are also becoming more widespread — along advanced mobile phones of the kind once only found in Japan. Mr Nakagawa's ability to move freely between Japanese and North American cultures, combining the telecoms expertise of the former with the entrepreneurial approach of the latter, has resulted in a system that can benefit both.
The story of Calvin Chin, the Chinese-American founder of Qifang, is similar. Mr Chin was born and educated in America, and worked in the financial services and technology industries for several years before moving to China. Expatriate Chinese who return to the country, enticed by opportunities in its fast-growing economy, are known as "returning turtles". Qifang is a "peer to peer" (P2P) lending site that enables students to borrow money to finance their education from other users of the site. P2P lending has been pioneered in other countries by sites such as Zopa and Prosper in other countries.
Such sites require would-be borrowers to provide a range of personal details about themselves to reassure lenders, and perform credit checks on them. Borrowers pay above-market rates, which is what attracts lenders. Qifang adds several twists to this formula. It is concentrating solely on student loans, which means that regulators are more likely to look favourably on the company's unusual business model. It allows payments to be made directly to educational institutions, to make sure the money goes to the right place. Qifang also requires borrowers to give their parents' names when taking out a loan, which increases the social pressure on them not to default, since that would cause the family to lose face.
Mr Chin has thus tuned an existing business model to take account of the cultural and regulatory environment in China, where P2P lending could be particularly attractive, given the relatively undeveloped state of China's financial-services market. In a sense, Qifang is just an updated, online version of the community group-lending schemes that are commonly used to finance education in China. The company's motto is that "everyone should be able to get an education, no matter their financial means".
Just as Mr Chin is trying to use knowledge acquired in the developed world to help people in his mother country of China, Sachin Duggal hopes his company, Nivio, will do something similar for people in India. Mr Duggal was born in Britain and is of Indian extraction. He worked in financial services, including a stint as a technologist at Deutsche Bank, before setting up Nivio, which essentially provides a PC desktop, personalised with a user's software and documents, that can be accessed from any web browser.
This approach makes it possible to centralise the management of PCs in a large company, and is already popular in the business world. But Mr Duggal hopes that it will also make computing more accessible to people who find the prospect of owning and managing their own PCs (and dealing with spam and viruses) too daunting, or simply cannot afford a PC at all. Nivio's software was developed in India, where Mr Duggal teamed up with Iqbal Gandham, the founder of Net4India, one of India's first internet service providers. Mr Duggal believes that the "virtual webtop" model could have great potential in extending access to computers to rural parts of India, and thus spreading the opportunities associated with the country's high-tech boom. A survey of the bosses of Indian software firms clearly shows how diasporas can promote innovation.
It found that those bosses who had lived abroad and returned to India made far more use of diaspora links upon their return than entrepreneurs who had never lived abroad, which gave them access to capital and skills in other countries. Diasporas can, in other words, help to ensure that "brain drain" does indeed turn into "brain gain", provided the government of the country in question puts appropriate policies in place to facilitate the movement of people, technology and capital.
Making the connection
Multinational companies can also play an important role in providing new opportunities for talented individuals, and facilitating the transfer of skills. In recent years many technology companies have set up large operations in India, for example, in order to benefit from the availability of talented engineers and the services provided by local companies. Is this simply exploitation of low-paid workers by Western companies?
The example of JiGrahak Mobility Solutions, a start-up based in Bangalore, illustrates why it is not. The company was founded by Sourabh Jain, an engineering graduate from the Delhi Institute of Technology. After completing his studies he went to work for the Indian research arm of Lucent Technologies, an American telecoms-equipment firm. This gave him a solid grounding in mobile-phone technology, which subsequently enabled him to set up JiGrahak, a company that provides a mobile-commerce service called Ngpay.
In India, where many people first experience the internet on a mobile phone, rather than a PC, and where mobile phones are far more widespread than PCs, there is much potential for phone-based shopping and payment services. Ngpay lets users buy tickets, pay bills and transfer money using their handsets. Such is its popularity that with months of its launch in 2008, Ngpay accounted for 4% of ticket sales at Fame, an Indian cinema chain.
The role of large companies in nurturing talented individuals, who then leave to set up their own companies, is widely understood in Silicon Valley. Start-ups are often founded by alumni from Sun, HP, Oracle and other big names. Rather than worrying that they could be raising their own future competitors, large companies understand that the resulting dynamic, innovative environment benefits everyone, as large firms spawn, compete with and acquire smaller ones.
As large firms establish outposts in developing countries, such catalysis of innovation is becoming more widespread. Companies with large numbers of employees and former employees spread around the world can function rather like a corporate diaspora, in short, providing another form of network along which skills and technology can diffuse. The network that has had the greatest impact on spreading ideas, promoting innovation and allowing potential partners to find out about each other's research is, of course, the internet. As access to the internet becomes more widespread, it can allow developing countries to link up more closely with developed countries, as the rise of India's software industry illustrates. But it can also promote links between developing countries.
The Cows to Kilowatts Partnership, based in Nigeria, provides an unusual example. It was founded by Joseph Adelagan, a Nigerian engineer, who was concerned about the impact on local rivers of effluent from the Bodija Market abattoir in Ibadan. As well as the polluting the water supply of several nearby villages, the effluent carried animal diseases that could be passed to humans. Dr Adelagan proposed setting up an effluent-treatment plant.
He discovered, however, that although treating the effluent would reduce water pollution, the process would produce carbon-dioxide and methane emissions that contribute to climate change. So he began to look for ways to capture these gases and make use of them. Researching the subject online, he found that a research institution in Thailand, the Centre for Waste Utilisation and Management at King Mongkut University of Technology Thonburi, had developed anaerobic reactors that could transform agro-industrial waste into biogas. He made contact with the Thai researchers, and together they developed a version of the technology
suitable for use in Nigeria that turns the abattoir waste into clean household cooking gas and organic fertiliser, thus reducing the need for expensive chemical fertiliser. The same approach could be applied across Africa, Dr Adelagan believes. The Cows to Kilowatts project illustrates the global nature of modern innovation, facilitated by the free movement of both ideas and people. Thanks to the internet, people in one part of the world can easily make contact with people trying to solve similar problems elsewhere.
Lessons learned
What policies should governments adopt in order to develop and attract innovation talent, encourage its movement and benefit from its circulation? At the most basic level, investment in education is vital. Perhaps surprisingly, however, Amar Bhidé of Columbia University suggests that promoting innovation does not mean pushing as many students as possible into technical subjects.
Although researchers and technologists provide the raw material for innovation, he points out, a crucial role in orchestrating innovation is also played by entrepreneurs who may not have a technical background. So it is important to promote a mixture of skills. A strong education system also has the potential to attract skilled foreign students, academics and researchers, and gives foreign companies an incentive to establish nearby research and development operations.
Many countries already offer research grants, scholarships and tax benefits to attract talented immigrants. In many cases immigration procedures are "fast tracked" for individuals working in science and technology. But there is still scope to remove barriers to the mobility of talent. Mobility of skilled workers increasingly involves short stays, rather than permanent moves, but this is not yet widely reflected in immigration policy. Removing barriers to short-term stays can increase "brain circulation" and promote diaspora links.
Another problem for many skilled workers is that their qualifications are not always recognised in other countries. Greater harmonisation of standards for qualifications is one way to tackle this problem; some countries also have formal systems to evaluate foreign qualifications and determine their local equivalents. Countries must also provide an open and flexible business environment to ensure that promising innovations can be brought to market. If market access or financial backing are not available, after all, today's global-trotting innovators increasingly have the option of going elsewhere.
The most important point is that the global competition for talent is not a zero-sum game in which some countries win, and others lose. As the Technology Pioneers described here demonstrate, the nature of innovation, and the global movement of talent and ideas, is far more complicated that the simplistic notion of a "talent war" between developed and developing nations would suggest. Innovation is a global activity, and granting the greatest possible freedom to innovators can help to ensure that the ideas they generate will benefit the greatest possible number of people.
Integrated Transformation: How rising customer expectations are turning com...
Modern customers have it good. Spoilt for choice and convenience, today’s empowered consumers have come to expect more from the businesses they interact with. This doesn’t just apply to their wanting a quality product at a fair price, but also tailored goods, swift and effective customer service across different channels, and a connected experience across their online shopping and in-store experience, with easy access to information they need when they want it.
Meeting these expectations is a significant challenge for organisations. For many, it requires restructuring long-standing operating models, re-engineering business processes and adopting a fundamental shift in mindset to put customer experience at the heart of business decision- making. Download our report to learn more.
Getting personal: The future of education post Covid-19
Schools on both sides of the Atlantic underwent unprecedented upheaval during Covid-19, which sparked wider questions about what teaching should look like. There was a rapid expansion in home-schooling and increased political tension over curricula, but perhaps most significant of all, was the renewed interest in personalised learning – in particular the way technology can help deliver a personalised learning experience more effectively and efficiently.
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Education is widely seen as the main driver of long-term social impact in Asia, and educational philanthropists are increasingly targeting innovative projects that help marginalised and deprived communities.
How to contribute wisely to education in Asia? Read the report >>Sparking economic progress through education
Through Q&As with luminaries in a number of sectors across the world, interviews aim to surface insights for policy makers, business leaders and other stakeholders as they consider actions to improve the quality of, and access to, education, to fortify their country’s economic, social and geopolitical fabric.
The series is supported by The International Commission on Financing Global Education Opportunity, which just presented a report urging governments to expand access to education to the UN Secretary-General, Mr Ban Ki-moon, and the Commission Co-Convenors during the UN General Assembly in New York.
The report, entitled "The Learning Generation: Investing in Education for a Changing World,” underscores the importance of quality education to address the social, economic, and security challenges of our time. For more on the report please go to educationcommission.org
Education: Trade challenges and opportunities post pandemic
The Covid-19 pandemic has posed unprecedented disruptions to education systems; however it has also accelerated many of the structural changes undergoing in the sector and opened up new opportunities. The emergence online and hybrid learning models, the take-up of Massive Online Open Courses (MOOCs) and augmented and virtual reality (AR/VR) have the potential to reshape the sector and pose serious threats to current incumbents, if investment in supporting connectivity infrastructure and training is not embraced.
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Financial and Professional Services: Trade challenges and opportunities pos...
Alongside professional services, it plays a pivotal role in the modern economy and international trade flows. The Covid-19 pandemic significantly disrupted the industry that was already being reshaped by the effects of the global financial crisis, sustainability drive and digital innovation. Digital transformation, changing customer preferences and regulatory pressures, are also challenging existing business models in financial and related professional services.
Despite entering the pandemic more resilient than it has been prior to the previous crisis, and stronger than expected performance in 2021, the global banking sector may register losses as a result of the pandemic over the next years. These will show in the form of credit losses, with defaults expected to soar as state support is withdrawn. One estimate forecast the industry’s loss in revenue at US$3.7trn over the next five years.1 Moreover, the uneven nature of the post-pandemic recovery will hit some regions and sectors harder than others. There is limited scope for wider margins in developed markets, with interest rates low and financial services utilisation high. In developed economies there is much greater space to reach new customers, despite the increase in credit risks.2 Digital technologies are restructuring the way financial services are provided, the competition dynamics and how the customers interact with the industry. The rise of financial technology (fintech), blockchain and artificial intelligence companies, are threatening traditional providers of financial services through increased competition. Challenger neobanks (digital-only providers) and telecom providers are gradually increasing their share in the market, both in terms of processes and services offered to customers. Traditional providers that struggle to shift activities to digital channels risk losing market share and the ability to reach new customers. In 2018 fintech companies already accounted for 38% of unsecured personal lending in the US, while they are “economically relevant” in SME financing in China, the US and the UK, according the Bank for International Settlements (BIS).3
Fintech boom: Number of UK Fintech companies (rebased at year 2000), 2000-2020Digital currencies have increasingly become the focus in central banks around the world amid growing government, business and consumer interest. A Central Bank Digital Currency (CBDC) would allow central banks to issue electronic money available to all households and businesses, allowing them to make payments in CBDC. A report from the Bank for International Settlements highlighted that 28% of 50 central banks surveyed were looking into CBDC interoperability.4 Of the major world economies, China is thought to be the most advanced CBDC testing, with the e-CNY digital yuan expected to launch in 2022.5 CBDCs could bring wider access, stronger governance and privacy standards to digital payments systems, currently dominated by cryptocurrencies such as Bitcoin.
Going digital: Willingness of central Banks to adopt range of approaches to interoperabilty of Central Bank Digital Currency (CBDCs) (%), 2021There is also growing consensus that financial services actors need to upgrade their agenda towards climate finance, as net zero cannot be achieved without the funding needed to mitigate the physical risks of the impact of climate change. Global climate financing was estimated to have reached up to US$620 in 2019, the bulk of which through debt issuance. Financing a transition to a climate-resilient economy will require much greater investment than is currently being committed, and failure to provide it will result in even more investment for climate adaptation and mitigation in the longer term. Estimates suggest that US$100-150trn will be needed to reach the 1.5-degree target by 2050.6
Climate finance growth: Total global climate finance flows (US$bn), 2012-2019The growing prominence of institutional and private investment in climate financing has prompted regulatory efforts to drive climate related activities. Regulation is responding to market developments with new tools, such as green bonds, and shaping the disclosure requirements through the launch of the Taskforce on Climate-related Financial Disclosures. However, more needs to be done to incentivise climate financing and the financial services industry has a vital role in facilitating the tools and mechanisms that will help address climate change.
1 McKinsey. ‘Interim Results 2021’. 2021. https://www.mckinsey.com/industries/financial-services/our-insights/global-banking-annual-review 2 The Economist Intelligence Unit (EIU).’Financial Services Global Outlook. 2021 3 Frost, J. ‘The economic forces driving fintech adoption across countries’. Bank for International settlements. https://www.bis.org/publ/work838.pdf, p.2 4 Auer, R et al. ‘CBDCs beyond borders: results from a survey of central banks’. Bank for International Settlements. 2021.https://www.bis.org/publ/bppdf/bispap116.htm 5 Lim, M. ‘What lies ahead for CBDCs, Bitcoin and other digital currencies?’. Fintech News. 2021.https://www.fintechnews.org/what-lies-ahead-for-cbdcs-bitcoin-and-other-digital-currencies/ 6 GFMA. ‘GFMA and BCG Report on Climate Finance Markets and the Real Economy‘. Global Financial Markets Association. 2020.https://www.gfma.org/policies-resources/gfma-and-bcg-report-on-climate-finance-markets-and-the-real-economy/
The Global Investment Landscape: Trade challenges and opportunities post pa...
Whilst the immediate effects have been severe, the pandemic has further accelerated trends that are reshaping the global investment landscape, such as the push for digital, sustainable and resilient solutions in a world that has turned more fragmented. Estimates suggest that in 2020 global trade in goods fell by 8%, while foreign direct investment (FDI) flows fell by a record 35% to US£1trn, the lowest figure since 2005.1 2 The retraction in global cross-border investments was more severe in developed economies, where FDI inflows and outflows fell by almost 60%. On the other hand, developing economies saw FDI inflows and outflows fall by only 10% largely due to resilient flows in Asia, particularly in China and India.3
During the pandemic the internationalisation of major multinational enterprises (MNEs) stagnated, although the degree of this effect varied considerably across industries. The value of announced greenfield investment fell by 33% to a record low of US$564bn, cross border M&A investment fell by 6% to US$475bn while project finance deals registered a 42% decline to US$367bn in 2020.4 The UNCTAD forecasts suggest global FDI flows have recover some ground in 2021 and return to pre-pandemic levels (2019) in 2022. Developed economies are expected to drive the growth in FDI, particularly in M&A activity and public investment support. These measures will have a positive effect on infrastructure, green, and digital economy sectors.5
Over the past two decades, the increasing investment in services, enlarged pool of cross border investors and the focus on emerging technologies have shaped the global investment landscape. The gradual servicification of manufacturing and the rapid rise of global digital technology companies have driven an upwards trajectory for investment in services. Services accounted for 60% of announced greenfield projects and 71% of announced cross border M&A deals in 2020.6 The sources of the investment flows are also becoming more diversified, with the emerging markets accounting for almost one fifth of global M&A deals by value and almost half the total value of global greenfield and international project investment in 2020.7 State-owned investors (SOIs), including largely emerging-market-located sovereign wealth funds (SWFs) have also become prevalent in the investment landscape with a growing appetite for alternative asset classes and active investment strategies.
Changing guards: Top host economies by FDI inflows (2019-20)As the global economy recovers from the pandemic, major forces ranging from emerging technologies, investment policy sustainability and geopolitics will reshape the pattern of the global investment landscape. FDI regulations and policies, already gaining traction prior to the pandemic, have been deployed by national governments to address supply chain vulnerabilities and the risk of predatory takeovers of strategic sectors. The number of investment policy measures adopted in 2020 rose by 40% compared to 2019, with the ratio of restrictive policy measures to liberalisation measures increasing by 41%.8
GVCs will also adopt new modes of business operation to enhance resilience, flexibility and uncertainty of considering the current global business environment. This could involve elements of reshoring or regionalisation for businesses, while governments are expected to gear up efforts to increase sustainability of business operations through integration of environmental, social and governance standards into regulatory frameworks for foreign investments and capital markets. Geopolitics and the changing geography of global demand will impact the international investment as developing countries continue to deepen their participation in global investment flows and tension remains high in the rivalry between the US-China.9
Policies matter: Number of investment policy measures adopted globally between 2008-20201 “World trade primed for strong but uneven recovery after COVID-19 pandemic shock”; World Trade Organisation, press release (March 2021) 2 “World Investment Report 2021: Investing in Sustainable Recovery”; UNCTAD (June 2021). 3 Ibid. 4 Ibid. 5 Ibid. 6 “World Investment Report 2020: International Production Beyond the Pandemic”; UNCTAD (June 2020). 7 “World Investment Report 2021: Investing in Sustainable Recovery”; UNCTAD (June 2021) 8 Ibid. 9 “Globalization in transition: The future of trade and value chains”; McKinsey Global Institute (2019)
Clean Growth: Trade challenges and opportunities post pandemic
Clean growth means facilitating economic development and improving standards of living, while protecting natural resources and ecosystems on which our well-being relies. The transition to a low-carbon economy requires mobilising investment and innovation to develop opportunities for inclusive and sustainable growth.
Achieving global net zero greenhouse gas (GHG) emissions by 2050 requires investment of US$1–2trn per year, which equates to roughly 1–1.5% of global GDP according to the Energy Transitions Commission (ETC) – funding to facilitate a green industrial revolution.1 After years of underperformance and “boom–bust” cycles, several clean tech sectors are thriving, fuelled by consumer demand and private and public investment. The global market for low-carbon goods and services has been estimated at US$4.2trn, spanning everything from recycling and the circular economy to environmental performance analytics and labelling.2
Electric growth: Electric car stocks in selected countries, 2013-2018Rapidly increased demand and investment in innovation has made several clean technologies, such as the renewable energy, electric vehicles (EVs), and energy-efficiency systems cost-competitive and ready for broader deployment. Wind energy costs in the US, for instance, have fallen from over 55 cents per kilowatt-hour in 1980 to under 3 cents today.3 Globally, solar photovoltaic costs have fallen 82% over the last decade, according to the International Renewable Energy Agency (IRENA).4 However, the net zero transition requires further innovation in technologies and services, such as carbon capture and storage, synthetic biology, carbon accounting, and others to reduce emissions from hard to abate sectors and activities.
Global renewable energy employment by techology, 2019Given the scale and the global nature of the challenge, international trade and investment is critical to the necessary innovation, development and diffusion of green goods and services. It also presents significant opportunities for business and countries that are able to develop innovative and productive capabilities and capacities in key clean growth sectors. The “Build Back Better” vision of recovery programmes following the Covid-19 pandemic – in which the fiscal demands of crisis recovery are seen as an opportunity to grapple with longstanding economic and social problems – has diverted significant funding towards the clean growth transition.5 It is crucial that this “green industrial policy” aims to make the clean transition “just”, by alleviating the social and economic costs by diversifying economic activity and helping people adapt in a changing labour market, without resorting to unwarranted protectionism.
[1] https://www.energy-transitions.org/wp-content/uploads/2020/09/Making-Mission-Possible-Full-Report.pdf [2] https://ec.europa.eu/environment/eussd/smgp/facts_and_figures_en.htm [3] https://www.energy.gov/eere/next-generation-wind-technology [4] https://www.irena.org/publications/2020/Jun/Renewable-Power-Costs-in-2019 [5] https://www.oecd.org/coronavirus/en/themes/green-recovery
Spotlight on human capital: How health, education and income can drive economic prosperity
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The Hinrich Foundation Sustainable Trade Index 2018
Yet the enthusiasm in Asia for trade does not appear to have waned. This broad societal consensus behind international trade has enabled Asian countries to continue broadening and deepening existing trading relationships, for example, by quickly hammering out a deal for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in early 2018 following the US’s withdrawal from its predecessor in 2017.
Asia, then, finds itself in the unique position of helping lead and sustain the global economy’s commitment to free and fair trade. It is in this context that the need for sustainability in trade is ever more crucial.
The Hinrich Foundation Sustainable Trade Index was created for the purpose of stimulating meaningful discussion of the full range of considerations that policymakers, business executives, and civil society leaders must take into account when managing and advancing international trade.
The index was commissioned by the Hinrich Foundation, a non-profit organisation focused on promoting sustainable trade. This, the second edition of the study, seeks to measure the capacity of 20 economies—19 in Asia along with the US—to participate in the international trading system in a manner that supports the long-term domestic and global goals of economic growth, environmental protection, and strengthened social capital. The index’s key findings include:
Countries in Asia, especially the richer ones, have broadly regressed in terms of trade sustainability. Hong Kong is developed Asia’s bright spot, recording a slight increase in its score and topping the 2018 index. Several middle-income countries perform admirably, led by Sri Lanka. For the economic pillar, countries generally performed well in terms of growing their labour forces as well as their per-head GDPs. For the social pillar, sharp drops for some countries in certain social pillar indicators contribute to an overall decline. For the environmental pillar, with deteriorating environmental sustainability in many rich countries, China, Laos and Pakistan are the only countries to record increases in scores. Sustainability is an ever more important determinant of FDI and vendor selection in choosing supply-chain partners. Companies are improving the sustainability of their supply chains by restructuring and broadening relationships with competitors and vendors.The Global Illicit Trade Environment Index 2018
To measure how nations are addressing the issue of illicit trade, the Transnational Alliance to Combat Illicit Trade (TRACIT) has commissioned The Economist Intelligence Unit to produce the Global Illicit Trade Environment Index, which evaluates 84 economies around the world on their structural capability to protect against illicit trade. The global index expands upon an Asia-specific version originally created by The Economist Intelligence Unit in 2016 to score 17 economies in Asia.
View the Interactive Index >> Download workbook
Breaking Barriers: Agricultural trade between GCC and Latin America
The GCC-LAC agricultural trading relationship has thus far been dominated by the GCC’s reliance on food imports, specifically meat, sugar, and cereals. Over the past two years, however, there has been a notable decline in the share of sugar imported from LAC, and 2017 saw the biggest importers in the GCC—Saudi Arabia and the UAE—impose a ban on Brazilian meat.
Market players on both sides of the aisle are keen to grow the relationship further, but there are hurdles to overcome. In this report, we explore in greater depth the challenges that agricultural exporters and importers in LAC and the GCC face. We consider both tariff and non-tariff barriers and assess key facets of the trading relationship including transport links, customs and certification, market information, and trade finance.
Key findings of the report:
GCC will need to continue to build partnerships to ensure a secure supply of food. Concerns over food security have meant that the GCC countries are exploring ways to produce more food locally. However, given the region’s climate and geology, food imports will remain an important component of the food supply. Strengthening partnerships with key partners such as those in LAC, from which it sourced 9% of its total agricultural imports in 2016, will be vital to food security in the region.
There is a wider range of products that the LAC countries can offer the GCC beyond meat, sugar and cereals. Providing more direct air links and driving efficiencies in shipping can reduce the time and cost of transporting food products. This will, in turn, create opportunities for LAC exporters to supply agricultural goods with a shorter shelf life or those that are currently too expensive to transport. Exporters cite examples such as berries and avocados.
The GCC can engage small and medium-sized producers that dominate the LAC agricultural sector by offering better trade financing options and connectivity. More direct air and sea links can reduce the cost of transporting food products, making it viable for smaller players to participate in agricultural trade. The existing trade financing options make it prohibitive for small and medium-sized players too. Exporters in LAC suggest that local governments and private companies in the GCC can offer distribution services with immediate payments to smaller suppliers at a discount.
Blockchain technology is poised to address key challenges market players face in agricultural trade. Through a combination of smart contracts and data captured through devices, blockchain technology can help to reduce paperwork, processing times and human error in import and export processes. It can improve transparency, as stakeholders can receive information on the state of goods and status of shipments in real time. Finally, it can help with food safety and quality management—monitoring humidity and temperature, for instance, along the supply chain can help to pinpoint batches that may be contaminated, minimising the need for a blanket ban on a product.
Corporations should use the pandemic to showcase science careers
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How to contribute wisely to education in Asia? Read the report >>Sparking economic progress through education
Through Q&As with luminaries in a number of sectors across the world, interviews aim to surface insights for policy makers, business leaders and other stakeholders as they consider actions to improve the quality of, and access to, education, to fortify their country’s economic, social and geopolitical fabric.
The series is supported by The International Commission on Financing Global Education Opportunity, which just presented a report urging governments to expand access to education to the UN Secretary-General, Mr Ban Ki-moon, and the Commission Co-Convenors during the UN General Assembly in New York.
The report, entitled "The Learning Generation: Investing in Education for a Changing World,” underscores the importance of quality education to address the social, economic, and security challenges of our time. For more on the report please go to educationcommission.org
Bridging the Digital Divide to Engage Students in Higher Education
While video-conferencing apps and other social platforms have thrown various higher education institutions a lifeline in the wake of covid-19, research shows that many faculty professors are struggling to maintain the same depth of engagement with students they used to have in a physical classroom setting.
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Accelerating urban intelligence: People, business and the cities of tomorro...
About the research
Accelerating urban intelligence: People, business and the cities of tomorrow is an Economist Intelligence Unit report, sponsored by Nutanix. It explores expectations of citizens and businesses for smart-city development in some of the world’s major urban centres. The analysis is based on two parallel surveys conducted in 19 cities: one of 6,746 residents and another of 969 business executives. The cities included are Amsterdam, Copenhagen, Dubai, Frankfurt, Hong Kong, Johannesburg, London, Los Angeles, Mumbai, New York, Paris, Riyadh, San Francisco, São Paulo, Singapore, Stockholm, Sydney, Tokyo and Zurich.
Respondents to the citizen survey were evenly balanced by age (roughly one-third in each of the 18-38, 39-54 and 55 years and older age groups) and gender. A majority (56%) had household incomes above the median level in their city, with 44% below it. Respondents to the business survey were mainly senior executives (65% at C-suite or director level) working in a range of different functions. They work in large, midsize and small firms in over a dozen industries. See the report appendix for full survey results and demographics.
Additional insights were obtained from indepth interviews with city officials, smart-city experts at NGOs and other institutions, and business executives. We would like to thank the following individuals for their time and insights.
Pascual Berrone, academic co-director, Cities in Motion, and professor, strategic management, IESE Business School (Barcelona) Lawrence Boya, director, Smart City Programme, city of Johannesburg Amanda Daflos, chief innovation officer, city of Los Angeles Linda Gerull, chief information officer, city of San Francisco Praveen Pardeshi, municipal commissioner, Brihanmumbai Municipal Corporation (Mumbai) • Brian Roberts, policy analyst, city of San Francisco Sameer Sharma, global general manager, Internet of Things (IoT), Intel • Marius Sylvestersen, programme director, Copenhagen Solutions Lab Tan Kok Yam, deputy secretary of the Smart Nation and Digital Government, Prime Minister’s Office, SingaporeThe report was written by Denis McCauley and edited by Michael Gold.
Talent for innovation
Talent for innovation: Getting noticed in a global market incorporates case studies of the 34 companies selected as Technology Pioneers in biotechnology/health, energy/environmental technology, and information technology.
Leonardo Da Vinci unquestionably had it in the 15th century; so did Thomas Edison in the 19th century. But today, "talent for innovation" means something rather different. Innovation is no longer the work of one individual toiling in a workshop. In today's globalised, interconnected world, innovation is the work of teams, often based in particular innovation hotspots, and often collaborating with partners, suppliers and customers both nearby and in other countries.
Innovation has become a global activity as it has become easier for ideas and talented people to move from one country to another. This has both quickened the pace of technological development and presented many new opportunities, as creative individuals have become increasingly prized and there has been greater recognition of new sources of talent, beyond the traditional innovation hotspots of the developed world.
The result is a global exchange of ideas, and a global market for innovation talent. Along with growth in international trade and foreign direct investment, the mobility of talent is one of the hallmarks of modern globalisation. Talented innovators are regarded by companies, universities and governments as a vital resource, as precious as oil or water. They are sought after for the simple reason that innovation in products and services is generally agreed to be a large component, if not the largest component, in driving economic growth. It should be noted that "innovation" in this context does not simply mean the development of new, cutting-edge technologies by researchers.
It also includes the creative ways in which other people then refine, repackage and combine those technologies and bring them to market. Indeed, in his recent book, "The Venturesome Economy", Amar Bhidé, professor of business at Columbia University, argues that such "orchestration" of innovation can actually be more important in driving economic activity than pure research. "In a world where breakthrough ideas easily cross national borders, the origin of ideas is inconsequential," he writes. Ideas cross borders not just in the form of research papers, e-mails and web pages, but also inside the heads of talented people. This movement of talent is not simply driven by financial incentives. Individuals may also be motivated by a desire for greater academic freedom, better access to research facilities and funding, or the opportunity to work with key researchers in a particular field.
Countries that can attract talented individuals can benefit from more rapid economic growth, closer collaboration with the countries where those individuals originated, and the likelihood that immigrant entrepreneurs will set up new companies and create jobs. Mobility of talent helps to link companies to sources of foreign innovation and research expertise, to the benefit of both. Workers who emigrate to another country may bring valuable knowledge of their home markets with them, which can subsequently help companies in the destination country to enter those markets more easily. Analysis of scientific journals suggests that international co-authorship is increasing, and there is some evidence thatcollaborative work has a greater impact than work carried out in one country. Skilled individuals also act as repositories of knowledge, training the next generation and passing on their accumulated wisdom.
But the picture is complicated by a number of concerns. In developed countries which have historically depended to a large extent on foreign talent (such as the United States), there is anxiety that it is becoming increasingly difficult to attract talent as new opportunities arise elsewhere. Compared with the situation a decade ago, Indian software engineers, for example, may be more inclined to set up a company in India, rather than moving to America to work for a software company there. In developed countries that have not historically relied on foreign talent (such as Germany), meanwhile, the ageing of the population as the birth rate falls and life expectancy increases means there is a need to widen the supply of talent, as skilled workers leave the workforce and young people show less interest than they used to in technical subjects. And in developing countries, where there is a huge supply of new talent (hundreds of thousands of engineers graduate from Indian and Chinese universities every year), the worry is that these graduates have a broad technical grounding but may lack the specialised skills demanded by particular industries.
Other shifts are also under way. The increasing sophistication of emerging economies (notably India and China) is overturning the old model of "create in the West, customise for the East". Indian and Chinese companies are now globally competitive in many industries. And although the mobility of talent is increasing, workers who move to another country are less likely to stay for the long-term, and are more likely to return to their country of origin. The number of Chinese students studying abroad increased from 125,000 in 2002 to 134,000 in 2006, for example, but the proportion who stayed in the country where they studied after graduating fell from 85% to 69% over the same period, according to figures from the OECD (see page 10).
What is clear is that the emergence of a global market for talent means gifted innovators are more likely to be able to succeed, and new and unexpected opportunities are being exploited, as this year's Technology Pioneers demonstrate. They highlight three important aspects of the global market for talent: the benefits of mobility, the significant role of diasporas, and the importance of network effects in catalysing innovation.
Brain drain, or gain?
Perhaps the most familiar aspect of the debate about flows of talent is the widely expressed concern about the "brain drain" from countries that supply talented workers. If a country educates workers at the taxpayers' expense, does it not have a claim on their talent? There are also worries that the loss of skilled workers can hamper institutional development and drive up the cost of technical services. But such concerns must be weighed against the benefits of greater mobility.
There are not always opportunities for skilled individuals in their country of birth. The prospect of emigration can encourage the development of skills by individuals who may not in fact decide to emigrate. Workers who emigrate may send remittances back to their families at home, which can be a significant source of income and can help to alleviate poverty. And skilled workers may return to their home countries after a period working abroad, further stimulating knowledge transfer and improving the prospects for domestic growth, since they will maintain contacts with researchers overseas. As a result, argues a recent report from the OECD, it makes more sense to talk of a complex process of "brain circulation" rather than a one-way "brain drain". The movement of talent is not simply a zero-sum gain in which sending countries lose, and receiving countries benefit. Greater availability and mobility of talent opens up new possibilities and can benefit everyone.
Consider, for example, BioMedica Diagnostics of Windsor, Nova Scotia. The company makes medical diagnostic systems, some of them battery-operated, that can be used to provide health care in remote regions to people who would otherwise lack access to it. It was founded by Abdullah Kirumira, a Ugandan biochemist who moved to Canada in 1990 and became a professor at Acadia University. There he developed a rapid test for HIV in conjunction with one of his students, Hermes Chan (a native of Hong Kong who had moved to Canada to study). According to the United States Centers for Disease Control, around one-third of people tested for HIV do not return to get the result when it takes days or weeks to determine. Dr Kirumira and Dr Chan developed a new test that provides the result in three minutes, so that a diagnosis can be made on the spot. Dr Kirumira is a prolific inventor who went on to found several companies, and has been described as "the pioneer of Nova Scotia's biotechnology sector".
Today BioMedica makes a range of diagnostic products that are portable, affordable and robust, making them ideally suited for use in developing countries. They allow people to be rapidly screened for a range of conditions, including HIV, hepatitis, malaria, rubella, typhoid and cholera. The firm's customers include the World Health Organisation. Providing such tests to patients in the developing world is a personal mission of Dr Kirumira's, but it also makes sound business sense: the market for invitro diagnostics in the developing world is growing by over 25% a year, the company notes, compared with growth of only 5% a year in developed nations.
Moving to Canada gave Dr Kirumira research opportunities and access to venture funding that were not available in Uganda. His innovations now provide an affordable way for hospitals in his native continent of Africa to perform vital tests. A similar example is provided by mPedigree, a start-up that has developed a mobile-phone-based system that allows people to verify the authenticity of medicines. Counterfeit drugs are widespread in the developing world: they are estimated to account for 10-25% of all drugs sold, and over 80% in some countries. The World Health Organisation estimates that a fake vaccine for meningitis, distributed in Niger in 1995, killed over 2,500 people. mPedigree was established by Bright Simons, a Ghanaian social entrepreneur, in conjunction with Ashifi Gogo, a fellow Ghanaian. The two were more than just acquaintances having met at Secondary School. There are many high-tech authentication systems available in the developed world for drug packaging, involving radio-frequency identification (RFID) chips, DNA tags, and so forth.
The mPedigree system developed my Mr Gogo, an engineering student, is much cheaper and simpler and only requires the use of a mobile phone — an item that is now spreading more quickly in Africa than in any other region of the world. Once the drugs have been purchased, a panel on the label is scratched off to reveal a special code. The patient then sends this code, by text message, to a particular number. The code is looked up in a database and a message is sent back specifying whether the drugs are genuine. The system is free to use because the drug companies cover the cost of the text messages. It was launched in Ghana in 2007, and mPedigree's founders hope to extend it to all 48 sub-Saharan African countries within a decade, and to other parts of in the developing world.
The effort is being supported by Ghana's Food and Drug Board, and by local telecoms operators and drug manufacturers. Mr Gogo has now been admitted into a special progamme at Dartmouth College in the United States that develops entrepreneurial skills, in addition to technical skills, in engineers. Like Dr Kirumira, he is benefiting from opportunities that did not exist in his home country, and his country is benefiting too. This case of mPedigree shows that it is wrong to assume that the movement of talent is one-way (from poor to rich countries) and permanent. As it has become easier to travel and communications technology has improved, skilled workers have become more likely to spend brief spells in other countries that provide opportunities, rather than emigrating permanently.
And many entrepreneurs and innovators shuttle between two or more places — between Tel Aviv and Silicon Valley, for example, or Silicon Valley and Hsinchu in Taiwan — in a pattern of "circular" migration, in which it is no longer meaningful to distinguish between "sending" and "receiving" countries.
The benefits of a diaspora
Migration (whether temporary, permanent or circular) to a foreign country can be facilitated by the existence of a diaspora, since it can be easier to adjust to a new culture when you are surrounded by compatriots who have already done so. Some observers worry that diasporas make migration too easy, in the sense that they may encourage a larger number of talented individuals to leave their home country than would otherwise be the case, to the detriment of that country.
But as with the broader debate about migration, this turns out to be only part of the story. Diasporas can have a powerful positive effect in promoting innovation and benefiting the home country. Large American technology firms, for example, have set up research centres in India in part because they have been impressed by the calibre of the migrant Indian engineers they have employed in America. Diasporas also provide a channel for knowledge and skills to pass back to the home country.
James Nakagawa, a Canadian of Japanese origin and the founder of Mobile Healthcare, is a case in point. A third-generation immigrant, he grew up in Canada but decided in 1994 to move to Japan, where he worked for a number of technology firms and set up his own financial-services consultancy. In 2000 he had the idea that led him to found Mobile Healthcare, when a friend was diagnosed with diabetes and lamented that he found it difficult to determine which foods to eat, and which to avoid.
The rapid spread of advanced mobile phones in Japan, a world leader in mobile telecoms, prompted Mr Nakagawa to devise Lifewatcher, Mobile Healthcare's main product. It is a "disease selfmanagement system" used in conjunction with a doctor, based around a secure online database that can be accessed via a mobile phone. Patients record what medicines they are taking and what food they are eating, taking a picture of each meal. A database of common foodstuffs, including menu items from restaurants and fast-food chains, helps users work out what they can safely eat. Patients can also call up their medical records to follow the progress of key health indicators, such as blood sugar, blood pressure, cholesterol levels and calorie intake.
All of this information can also be accessed online by the patient's doctor or nutritionist. The system allows people with diabetes or obesity (both of which are rapidly becoming more prevalent in Japan and elsewhere) to take an active role in managing their conditions. Mr Nakagawa did three months of research in the United States and Canada while developing Lifewatcher, which was created with support from Apple (which helped with hardware and software), the Japanese Red Cross and Japan's Ministry of Health and Welfare (which provided full access to its nutritional database).
Japanese patients who are enrolled in the system have 70% of the cost covered by their health insurance. Mr Nakagawa is now working to introduce Lifewatcher in the United States and Canada, where obesity and diabetes are also becoming more widespread — along advanced mobile phones of the kind once only found in Japan. Mr Nakagawa's ability to move freely between Japanese and North American cultures, combining the telecoms expertise of the former with the entrepreneurial approach of the latter, has resulted in a system that can benefit both.
The story of Calvin Chin, the Chinese-American founder of Qifang, is similar. Mr Chin was born and educated in America, and worked in the financial services and technology industries for several years before moving to China. Expatriate Chinese who return to the country, enticed by opportunities in its fast-growing economy, are known as "returning turtles". Qifang is a "peer to peer" (P2P) lending site that enables students to borrow money to finance their education from other users of the site. P2P lending has been pioneered in other countries by sites such as Zopa and Prosper in other countries.
Such sites require would-be borrowers to provide a range of personal details about themselves to reassure lenders, and perform credit checks on them. Borrowers pay above-market rates, which is what attracts lenders. Qifang adds several twists to this formula. It is concentrating solely on student loans, which means that regulators are more likely to look favourably on the company's unusual business model. It allows payments to be made directly to educational institutions, to make sure the money goes to the right place. Qifang also requires borrowers to give their parents' names when taking out a loan, which increases the social pressure on them not to default, since that would cause the family to lose face.
Mr Chin has thus tuned an existing business model to take account of the cultural and regulatory environment in China, where P2P lending could be particularly attractive, given the relatively undeveloped state of China's financial-services market. In a sense, Qifang is just an updated, online version of the community group-lending schemes that are commonly used to finance education in China. The company's motto is that "everyone should be able to get an education, no matter their financial means".
Just as Mr Chin is trying to use knowledge acquired in the developed world to help people in his mother country of China, Sachin Duggal hopes his company, Nivio, will do something similar for people in India. Mr Duggal was born in Britain and is of Indian extraction. He worked in financial services, including a stint as a technologist at Deutsche Bank, before setting up Nivio, which essentially provides a PC desktop, personalised with a user's software and documents, that can be accessed from any web browser.
This approach makes it possible to centralise the management of PCs in a large company, and is already popular in the business world. But Mr Duggal hopes that it will also make computing more accessible to people who find the prospect of owning and managing their own PCs (and dealing with spam and viruses) too daunting, or simply cannot afford a PC at all. Nivio's software was developed in India, where Mr Duggal teamed up with Iqbal Gandham, the founder of Net4India, one of India's first internet service providers. Mr Duggal believes that the "virtual webtop" model could have great potential in extending access to computers to rural parts of India, and thus spreading the opportunities associated with the country's high-tech boom. A survey of the bosses of Indian software firms clearly shows how diasporas can promote innovation.
It found that those bosses who had lived abroad and returned to India made far more use of diaspora links upon their return than entrepreneurs who had never lived abroad, which gave them access to capital and skills in other countries. Diasporas can, in other words, help to ensure that "brain drain" does indeed turn into "brain gain", provided the government of the country in question puts appropriate policies in place to facilitate the movement of people, technology and capital.
Making the connection
Multinational companies can also play an important role in providing new opportunities for talented individuals, and facilitating the transfer of skills. In recent years many technology companies have set up large operations in India, for example, in order to benefit from the availability of talented engineers and the services provided by local companies. Is this simply exploitation of low-paid workers by Western companies?
The example of JiGrahak Mobility Solutions, a start-up based in Bangalore, illustrates why it is not. The company was founded by Sourabh Jain, an engineering graduate from the Delhi Institute of Technology. After completing his studies he went to work for the Indian research arm of Lucent Technologies, an American telecoms-equipment firm. This gave him a solid grounding in mobile-phone technology, which subsequently enabled him to set up JiGrahak, a company that provides a mobile-commerce service called Ngpay.
In India, where many people first experience the internet on a mobile phone, rather than a PC, and where mobile phones are far more widespread than PCs, there is much potential for phone-based shopping and payment services. Ngpay lets users buy tickets, pay bills and transfer money using their handsets. Such is its popularity that with months of its launch in 2008, Ngpay accounted for 4% of ticket sales at Fame, an Indian cinema chain.
The role of large companies in nurturing talented individuals, who then leave to set up their own companies, is widely understood in Silicon Valley. Start-ups are often founded by alumni from Sun, HP, Oracle and other big names. Rather than worrying that they could be raising their own future competitors, large companies understand that the resulting dynamic, innovative environment benefits everyone, as large firms spawn, compete with and acquire smaller ones.
As large firms establish outposts in developing countries, such catalysis of innovation is becoming more widespread. Companies with large numbers of employees and former employees spread around the world can function rather like a corporate diaspora, in short, providing another form of network along which skills and technology can diffuse. The network that has had the greatest impact on spreading ideas, promoting innovation and allowing potential partners to find out about each other's research is, of course, the internet. As access to the internet becomes more widespread, it can allow developing countries to link up more closely with developed countries, as the rise of India's software industry illustrates. But it can also promote links between developing countries.
The Cows to Kilowatts Partnership, based in Nigeria, provides an unusual example. It was founded by Joseph Adelagan, a Nigerian engineer, who was concerned about the impact on local rivers of effluent from the Bodija Market abattoir in Ibadan. As well as the polluting the water supply of several nearby villages, the effluent carried animal diseases that could be passed to humans. Dr Adelagan proposed setting up an effluent-treatment plant.
He discovered, however, that although treating the effluent would reduce water pollution, the process would produce carbon-dioxide and methane emissions that contribute to climate change. So he began to look for ways to capture these gases and make use of them. Researching the subject online, he found that a research institution in Thailand, the Centre for Waste Utilisation and Management at King Mongkut University of Technology Thonburi, had developed anaerobic reactors that could transform agro-industrial waste into biogas. He made contact with the Thai researchers, and together they developed a version of the technology
suitable for use in Nigeria that turns the abattoir waste into clean household cooking gas and organic fertiliser, thus reducing the need for expensive chemical fertiliser. The same approach could be applied across Africa, Dr Adelagan believes. The Cows to Kilowatts project illustrates the global nature of modern innovation, facilitated by the free movement of both ideas and people. Thanks to the internet, people in one part of the world can easily make contact with people trying to solve similar problems elsewhere.
Lessons learned
What policies should governments adopt in order to develop and attract innovation talent, encourage its movement and benefit from its circulation? At the most basic level, investment in education is vital. Perhaps surprisingly, however, Amar Bhidé of Columbia University suggests that promoting innovation does not mean pushing as many students as possible into technical subjects.
Although researchers and technologists provide the raw material for innovation, he points out, a crucial role in orchestrating innovation is also played by entrepreneurs who may not have a technical background. So it is important to promote a mixture of skills. A strong education system also has the potential to attract skilled foreign students, academics and researchers, and gives foreign companies an incentive to establish nearby research and development operations.
Many countries already offer research grants, scholarships and tax benefits to attract talented immigrants. In many cases immigration procedures are "fast tracked" for individuals working in science and technology. But there is still scope to remove barriers to the mobility of talent. Mobility of skilled workers increasingly involves short stays, rather than permanent moves, but this is not yet widely reflected in immigration policy. Removing barriers to short-term stays can increase "brain circulation" and promote diaspora links.
Another problem for many skilled workers is that their qualifications are not always recognised in other countries. Greater harmonisation of standards for qualifications is one way to tackle this problem; some countries also have formal systems to evaluate foreign qualifications and determine their local equivalents. Countries must also provide an open and flexible business environment to ensure that promising innovations can be brought to market. If market access or financial backing are not available, after all, today's global-trotting innovators increasingly have the option of going elsewhere.
The most important point is that the global competition for talent is not a zero-sum game in which some countries win, and others lose. As the Technology Pioneers described here demonstrate, the nature of innovation, and the global movement of talent and ideas, is far more complicated that the simplistic notion of a "talent war" between developed and developing nations would suggest. Innovation is a global activity, and granting the greatest possible freedom to innovators can help to ensure that the ideas they generate will benefit the greatest possible number of people.
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Education | How will covid-19 reshape key Australian industries?
A recent report by the Mitchell Institute at Victoria University titled Australian Investment in Education: Higher Education shows that 40% of Australia’s annual university student revenue is derived from international students. This demographic provides almost A$9bn (US$5.9bn) to universities and injects another A$10bn (US$6.5bn) into the broader economy. The report also notes that most universities had limited surpluses to steer them through the covid-19 contraction.
Figure 1: University domestic and international student revenue (actual and forecast)
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