Demographic shifts, technological advances, and an unprepared workforce put economies at risk if the skills gap isn't closed.

Report: The skills gap needs urgent attention


Demographic shifts, technological advances, and an unprepared workforce put economies at risk of a "skills chasm"

Key points:

Inefficient career transitions and related learning gaps are costing the U.S. economy $1.1 trillion annually–a staggering 5 percent of GDP, according to new research from Pearson.

The report, “Lost in Transition: Fixing the Skills Gap,” released at the World Economic Forum Annual Meeting, warns of a potential global “skills chasm” between employer needs and employee capabilities, and urgently calls for a fundamental shift in approaches to learning and skills development.

The full report details the economic and personal impact of learning gaps during major career transitions–from school to work, layoffs or business shifts, and disruptions caused by AI automation. It also highlights two critical imperatives for immediate, collaborative action across the education and business sectors: the need to learn more effectively and the development of modern skilling pathways that evolve with the future of work.

Prioritize “learning to learn”
Improving the way people learn is stressed as vital for an adaptive workforce ready for continual upskilling, career pivots and personal career fulfillment. The report advocates for “learning to learn” becoming a core focus across education and corporate training, emphasizing metacognitive skills such as goal setting, critical thinking and self-regulated learning. A cited study found that these approaches can accelerate yearly learning progress by seven months.

Develop clear modern skilling pathways
Moving beyond outdated linear career paths, the report encourages reimagined dynamic and efficient skilling pathways that flex to future workforce needs. It promotes work-based learning like apprenticeships to align skills with real-world demands, tailored support, and mentorships. It estimates the U.S. could gain $40 billion annually just by shortening transition times from formal education to work by six weeks.

Implementing such approaches could unlock trillions for economies while creating life-changing opportunities for millions worldwide.

“There’s real potential for the skills gap to become a chasm if we don’t act. The traditional education that slingshots people into their careers is no longer enough. Learning how to learn will become the focus for students, workers and employers to help people adapt and re-skill throughout their careers and their learning journey,” said Pearson CEO Omar Abbosh. “We can help prevent the skills gap from becoming a skills chasm when employers, educators, workers and government partner to find solutions.” 

The full report and its findings are based on quantitative analysis including data from Pearson’s Faethm, literature reviews and interviews with leading experts. Among other topics explored:

  • Virtual reality for career exploration
  • Lifelong learning financing
  • Digital wallets for robust skills tracking
  • AI-powered career mapping
  • The creation of a common skills language
  • Assessments for career progression and wage growth

This press release originally appeared online.

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