Illustration for digital skills: a computer screen with code on it

The new global race is for digital skills

“An investment in knowledge always pays the best interest”

said Benjamin Franklin, to whom we owe the invention of the lightning rod and bifocals, among other things.

More than two centuries later, the American mathematician’s observation could not be more relevant. While digital technologies have triggered the greatest wave of automation in human history, they are also increasing the need for new skills, not just for workers and companies but also for citizens. In a context in which information is increasingly distributed by algorithms and social networks and fake news can influence a political election, the digital literacy of civil society is becoming a democratic necessity.

At the same time, big data and artificial intelligence systems are driving a digital transformation of the world of work at all levels, from manufacturing, where numbers are larger, to services, where the impact is likely to be devastating (more than 7% of the GDP of the Philippines is generated by call centres where AI systems will cut many jobs).

Replacing workers with machines (which are nothing but a form of capital) is nothing new, but this time, unlike in other industrial revolutions, it is also hitting white-collar workers as lawyers, doctors, and managers, for whom the ability to collaborate with and possible even train machines is already becoming a competitive factor. Automation is therefore also severely hitting the middle class with an extremely rapid effect.

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Economists are very familiar with this development and there is no lack of alarm signals regarding the “digital mismatch” – the asymmetry between the skills required and the actual skills of workers. In fact, a recent study by the European Commission shows that nine out of ten jobs will require digital skills over the next decade, but that 44% of Europeans aged between 16 and 74 do not have the skills to tackle this transition. The most dramatic figure concerns women above all, because in 2016 there were three times as many male students as female students in the ICT field at European universities.

All this is happening in a context of increasingly global digital ecosystems increasingly dominated by US or Chinese multinationals. In fact, not even a single one of the top 15 companies in the world in terms of capitalisation is European, and out of the top 200 online platforms in the world, only eight (4%) are European. This gap is likely to widen because America’s domination in terms of technical scientific skills is being undermined by China, which has engaged in a real competition with the West that also aims to attract brains from abroad. Although internet penetration is barely 44%, there are already 632 million Chinese people online: more than double the figure for the United States and Europe, as the McKinsey Global Institute observed. Its digital economy represents 4.4% of GDP, placing the People’s Republic ahead of the USA, France, the UK, Germany, and Italy. It must be said that labour productivity in China still fluctuates around a tenth of that in America and Europe, but Beijing is investing heavily in training and infrastructure with the aim of gaining 7 points of GDP by 2025.

Europe is reacting on various levels to this race for digital transformation. The Commission has recently fielded the Digital Europe Programme, a €9 billion package of measures to promote five areas: high-performance computing, artificial intelligence, cybersecurity and trust, and, above all, skills and adoption of digital technologies in society through the Digital Skills and Jobs Coalition programme, which has planned budget of 700 million for the period 2021-2027.

Digital skills, however, do not only represent a challenge for the public; many private companies are making efforts on this front in Europe and even multinationals such as Facebook and Microsoft are investing to support skills in several EU countries such as Spain, Italy, and Poland, which suffer from most severe digital mismatch, as well as in the UK.

In fact, Europe is presenting a far from united front in the global race for digital skills. The Economist‘s Automation readiness index, which ranks countries on three parameters (innovation ecosystem, labour policies, and training policies) indicates that while Germany is a world-leader, often on a par with Japan and South Korea, Estonia is in the lead on the training front, ahead of South Korea, while Germany comes fourth and France and the UK come sixth and eighth respectively in the band of developed countries. Italy, meanwhile, is still in the group of “emerging” countries behind the Arab Emirates and Argentina.

This article is part of REIsearch, a citizen and media engagement campaign aimed at assessing and improving the digital competences of European citizens. It follows in the steps of the 2016 endeavour on chronic diseases which engaged more than 60,000 people.

You can exchange on iNerd and the REIsearch campaign with the hashtag #HowNerdyAreYou. Follow us on Twitter too!

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