Future trend
Today Information technology has changed the way business is conducted. For example robots are replacing labor workers in factories, ATMs are replacing bank tellers, email is replacing post office mails etc. Many works today can be done virtually with internet connections, so instead of workers have to move to where the jobs are, with technology works can be moved to where skilled workers live.
To take advantage of this trend, technology education is important. However, many college students are not aware of the trend and continue to enroll in areas that are no longer in demand resulting in oversupply of certain skills and shortage of others. All over the world, it is clear that today most jobs will require a college education in specific technical skills. Workers without college education or even college graduates without specific technical skills will be at a disadvantage.
The difference between people with skills and without skills has created a dilemma for many countries. The U.S government predicts that by 2020, the U.S will be short of 1.5 million workers with college degrees in science, technology, engineering, and mathematics (STEM) but at the same time will have surplus of over 6 million labor workers who only have high school education. The situation is worst in Europe, with a shortage of 8.2 million highly skilled college workers and an oversupply of 23 million workers who do not have the skills. If this situation continues, many countries will face shortage of skilled workers needed for economy growth but a huge number of permanently unemployed people with no hope in the future.
The reason technical skills are in short supply because technology changes fast but schools are slow to adjust to meet the demand. Because technology impacts the way companies are operating, the demand for skilled workers will continue to increase all over the world. At the same time, the growing number of unemployed youth poses a serious long-term challenge. Young people who cannot find work suffer life-long poverty. For example, unemployment among Spanish and Greek youth has risen close to 45 percent, which have led to a crisis in Europe and could spread to many nearby countries. Creating employment for these unskilled people is difficult. It will require a lot of retraining which is expensive in a bad economic time. Fixing skills demand will take longer time and may not be enough to put all of today's unemployed back to work.
With globalization manufacturing works have been outsourced to lower cost countries so there are fewer labor jobs available. The application of automation and robots in factories require different kinds of skills which many people do not have. The financial crisis also forces older workers to stay on the job longer instead of retiring so there are fewer jobs for younger workers. In Europe the population is aging rapidly and without strong workforce, the economy cannot grow. As a result, most European countries will face a long-term jobs problem that they will not be able to solve adequately. As the demand slows down, there will be less consuming and less works to be outsourced which also impact developing countries. This situation creates a chain reaction in the economy of developing countries that rely on outsourcing works. We are beginning to see a slowdown in the economies of China and Asian countries with factories closing and huge number of unemployed workers. It will have more devastating impacts in years to come.
There is no easy solution for this situation as the whole world is interconnected and economic event in one country will have impacted others. However, there are countries that have prepared their citizens to make sure that they are ready for the jobs of tomorrow. For example, Singapore and S. Korea consider technology education as the fundamental importance for national competitiveness. They have improved primary and secondary education by adding more technology and math trainings into the curricula and overhauling their university education systems. Governments have funded technology research and trainings by shifting budget from general education to technology education. These countries have a national jobs database to allow students to see what jobs are in high demand and what degrees are needed. They also promote entrepreneurship and innovation, catalyzing investment in technology infrastructure, and streamlining regulatory approval processes. When I was in S. Korea, I was amazed at the high number of students enrolled in information technology and engineering. A professor told me: “We have been preparing for the past ten years. All of our schools, from elementary, high school, to college are completely connected to the internet. Science, Technology, Math and Engineering are required courses at all levels, and English language is strongly encouraged.”
In a global economy, companies will continue to seek skilled workers wherever they can find them. After seeing what happened in Singapore and S. Korea, I know where they can find them. In the past, companies are looking for low cost labors so India and China are the best places but the rule has changed. With automation technology and robots, low cost labor is no longer needed; the new demand is having technology skilled workers.
When the critical resource is technical skills, companies that can find a good supply of highly qualified workers with special skills will outperform competitors who cannot. This will require finding places that have the best education system with abundant of skilled workers. The future of outsourcing will move from low labor to skilled labor, especially in specific technology area. Having skilled workers will give the company a competitive advantage and helps enable its rapid growth. In the coming years, companies that can build up a workforce of the best trained and motivated workers will win and so will the economies in which these workers live.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
