Future of work - Part 3 | Preparing for the green and digital economy

This article is part of a trilogy on employment and the future of work. You can find Part 1 on the global search of job quality here, and Part 2 on impact investment for transforming jobs here.

By 2030, the green transition could create 24 million new jobs worldwide, many of which will be in developing countries. Currently only 5% of employees in developing regions receive training in green skills compared to over 28% in developed regions. Meanwhile only 13% of youth in low-income countries globally have the necessary digital skills for future job markets. These regions face a pressing need to diversify labor force skills in order to meet the needs of the 21st century economy, as a large portion of workers are currently employed in low-skill agricultural labor. To achieve a smart and sustainable future with good jobs and better livelihoods, more efforts are needed to build a workforce with the green and digital skills required to remain competitive in a rapidly changing global economy.

The collaboration with industry experts, impact-driven investors, and academic institutions is essential to address urgent global challenges. Through our articles and trilogies, we aim to share the insights we have gained from these projects with our network.

Barriers to good jobs in developing countries

There are many barriers to good jobs that workers in developing countries face. One such problem is the reliance on the informal economy, which can prevent workers from accessing workplace protections, benefits, and other areas of employment regulation enforcement because of the lack of business registration or employment contracts. The World Economic Forum estimates that 35 % of GDP in low- and middle-income countries comes from the informal economy compared to about 15 % in high-income countries.

One of the strongest barriers to good jobs is the skills gap. Many workers have experience in low-skilled labor such as agriculture, which entrenches them into low-paying, and often economically volatile jobs. Advanced industrial and service-oriented jobs have higher associations of better pay, benefits, safety, and security standards. But in order to access these jobs, workers need pathways to develop the necessary skills that employers seek in these fields, such as digital, green, and advanced manufacturing. However, many developing countries struggle with the enabling infrastructure, skill development, and human capital accumulation to cultivate the skills that lead to quality jobs.  According to the World Bank, about 23 % of firms cite workforce skills as significant constraint to their operations. The statistic rises to 40 to 60 % in some African and Latin American countries.

Meanwhile, women often face additional barriers to good jobs including gender discrimination and lack of formal education – global labor force participation for women is roughly 25 percentage points lower than for men. According to Luca Etter, a Senior Policy Advisor at the Swiss Agency for Development and Cooperation (SDC), this gender disparity is also a risk in the green transition: “Gender impact is important when talking about green and inclusive development. We have to be careful that these initiatives are not adding inequalities to an unequal world. There’s a risk that support for the green transition will go primarily to men because they traditionally are overrepresented in these kinds of jobs.”

Reskilling and upskilling the workforce 

The World Bank’s STEP framework – Skills Toward Employment and Productivity – aims to guide policymakers for the preparation of skills diagnostics as well as the design of policies to develop skills across sectors that lead to productive employment and growth. The framework’s five ‘steps’ include: 1) getting children off to the right start through early child development, 2) building systems that ensure all students learn with clear learning standards, 3) developing job-relevant skills in pre-employment and on-the-job training 4) encouraging investments in knowledge and creativity, and 5) facilitating an environment of efficient job mobility and matching.

One of the growing ways to develop the skills needed for the 21st century economy is to invest in lifelong learning systems, which can empower individuals to seek better jobs, better pay, and better lives. These systems help to close the gap between labor market demands and workforce capabilities while also enabling better job quality. The ILO Strategy on Skills and Lifelong Learning 2030 outlines pathways to lifelong learning including developing foundational and core work skills, creating coherent and affordable incentives, improving vocational guidance and labor market data, recognising formal and informal skills learning, and ensuring equitable access to learning.

But formal education, vocational training, or learning courses are not the only way to upskill. According to Kehinde Banasko, founder of Skilladder and former leader at Andela, ALX, and Future Africa, the key to unlocking talent potential in places like Africa lies in skill portability. “In today’s rapidly evolving economy, we need to create a universal skills currency for Africa – one that helps people translate their existing capabilities into opportunities in high-growth industries. Someone’s experience, whether from formal work or life challenges, holds valuable transferable skills. Our mission at Skilladder is to help Africans recognise these skills and use them as building blocks for careers in emerging sectors,” says Banasko.

The prospects and pathways for good jobs in the green and digital economy

Evidence suggests that not all jobs created in green activities are quality jobs. The African continent could see as many as 3.3 million new green jobs by 2030 according to a report by FSD Africa. The largest sector within green jobs is forecasted to be solar, with estimates of 1.75 million new jobs. Yet 40 % of new solar jobs will be in the form of ‘unskilled’ jobs such as casual labourers setting up solar farms. It will not be enough to connect workers to ‘green’ jobs if the goal is to improve livelihoods through high quality jobs.

To ensure that the green and digital transitions provide higher quality jobs in developing countries, there will be a need for collaboration between public and private sector organisations. These will range between workforce planning and development strategies spearheaded by governments, as well as on the job skills development initiatives led by employers. These policies can help employees move up in the chain with respect to job quality and be prepared for future phases of the transition. But this will require worker voice.

As Delilah Rothenberg of the Predistribution Initiative (PDI) told us, worker power will be key: “the combination of having a say in governance, for instance through employees or even the workforce more broadly having representation on a board of directors, as well as equity ownership, where workers benefit from the profits and rising value of a company are key to ensuring a just transition, whether that transition is about climate, tech, or other evolutions.”

There will be opportunity for job creation in the green and digital transition. But for the transition to be successful and just, workers will need businesses, governments, and communities to commit to the necessary supports that foster high quality jobs, as good and green jobs are not a guarantee.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.