Upskilling necessary to fix skills mismatch
Recent research has shown that the IT industry is already facing a talent gap
The rapid evolution of technology has meant that technical skills in the workforce become obsolete at an alarmingly fast rate, forcing organisations and workers across the UAE to ensure that they are constantly upskilling to a costly drop in productivity, experts noted.
In its most recent report, the Boston Consulting Group (BCG) found that a skills mismatch is the key barrier to human capital development. This same skills mismatch affects roughly 1.3 billion people worldwide, and is imposing a six per cent annual tax on the global economy in the form of lost labor productivity. In addition, the report also noted that skills are becoming obsolete at an increasingly fast rate; technical skills, in particular, are outdated in two to five years, and it is expected that by 2022, 27 per cent of available jobs will be in roles that do not yet exist - heightening the need for reskilling and upskilling.
"The system for building human capital needs to be updated," said Dr. Leila Hoteit, senior partner at BCG. "Not only does the future economy demand a human-centric approach, education systems need to adapt to new and more sophisticated market requirements."
Research by Korn Ferry found that by 2030, the demand for skilled workers will outstrip supply, resulting in a global talent shortage of more than 85.2 million people. Left unchecked, the financial impact of this talent shortage could reach $8.452 trillion in unrealised annual revenue by 2030, equivalent to the combined GDP of Germany and Japan. In the Middle East, major markets such as the UAE and Saudi Arabia could miss out on $50.55 billion and $206.77 billion respectively in unrealised output by 2030.
Korn Ferry's research showed that the core of the problem lies in the fact that technology cannot deliver the promised productivity gains if there are not enough human workers with the right skills. This is especially true in the case of technologies such as Artificial Intelligence (AI), Virtual reality (VR), and augmented reality (AR) that are already being deployed in sectors across the UAE. The IT industry is already facing a talent gap, and according to a Cisco survey of the 600 IT and business decision makers, 93 per cent believe that it is serious enough to be slowing their business' transformation.
According to a recent survey by Oracle, AI is becoming more prominent with 50 per cent of workers currently using some form of AI at work compared to only 32 per cent last year. However, 88 per cent of UAE workers surveyed, and 84 per cent of HR leaders, find it challenging to keep up with the pace of technological changes in the workplace. UAE workers want a simplified experience with AI at work, asking for a better user interface, best practice training, and an experience that is personalised to their behavior.
A recent study by Microsoft and EY revealed that the UAE is the second highest regional investor in AI over the past 10 years, investing $2.15 billion in total. In addition, the report also found that 18 per cent of businesses in the country consider AI as their most important digital priority. Towards this end, 94 per cent of UAE companies have an 'AI Strategy' as an important topic at C-suite level, and 35 per cent of companies say AI discussions are filtering down from top management to non-managerial levels.
Similarly, a new report by PwC Middle East forecast VR and AR technologies to contribute $4.1 billion to the UAE economy, a one per cent boost to GDP by 2030. The majority of the contribution to the UAE economy will come from AR at $2.8 billion, with VR providing $1.3 billion. VR and AR will also have a significant impact on employment in the country, with PwC estimating that 0.6 per cent of jobs - upward of 40,000 people - will be enhanced by 2030.
"The Middle East is at a crossroads today as it undergoes a once-in-a-lifetime transformation," said Ali Al Hosseini, chief digital officer at PwC Middle East. "Choosing the path of early technology adoption will have tremendous implications for business, society and the region's economy as a whole. No place exemplifies this drive for innovation and openness to change better than the UAE. As AR and VR technology finally comes of age, we expect both to help boost the UAE's economy in a significant way."
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