Increased investments to reduce carbon emissions and adapt to climate change are driving business transformation and dictating global skills demand.
This is according to The Future of Jobs 2025 report from the World Economic Forum (WEF), which published its findings amidst a cost of living crisis, easing inflation, and extensive geopolitical conflict. As part of its methodology, the report analysed global unemployment rates and surveyed over 1,000 global employers representing over 14 million workers and 22 industries to assess the jobs market.
Despite trying economic and social conditions, the global unemployment rate sits at just 4.9 per cent, the lowest level since 1991. Within this figure, significant disparities can be explored since low income countries are experiencing an increase in unemployment levels while middle-income countries are seeing this figure decline.
Global unemployment rates can be interpreted as something of a socio-economic barometer, highlighting progress and attitudes both globally and for specific countries. For example, this year’s report has shown that the global unemployment rate for both sexes peaked at 6.6 per cent but has since declined to 4.8 per cent for men while the rate for women saw a fall and subsequent rise to 5.2 per cent. Lower-middle income countries are driving this trend, with higher rates of female unemployment.
Youth unemployment has also elevated to 13 per cent, rising to 21.7 per cent when assessing youths not in employment, education or training (NEETs). The NEET rate is highest for lower income countries, most likely a result of inadequate education systems or access to skills growth and training programmes.
Finally, a breakdown of the macrotrends within the unemployment statistics paints a clear image of the industries and investments shaping our future, in this instance technological change, the green transition, economic uncertainty, demographic shifts, and geoeconomic fragmentation.
Responding to the WEF’s survey, over 60 per cent expect broadening digital access to transform their business. When asked which primary technologies are having an impact on business, 80 per cent cited AI and information processing, 58 per cent robots and autonomous systems, and 41 per cent energy generation, storage and distribution.
This highlights two key factors: Firstly, that businesses are becoming increasingly reliant on AI technology. Given the rate at which AI tech has developed, there are some concerns as to whether these systems, and particularly their energy and water-intensive data centres, are not yet being managed efficiently. Businesses will need to analyse their use of AI, ensure its application is necessary, and understand its impact before running away with its concepts.
Secondly, that a growing number of businesses are switching their focus to on-site energy generation and storage in a bid to achieve energy independence and slash their energy costs. As demand for these increase, so to will the demand for organisations and workers who are able to service these requests. In the UK alone, there are over 2,134 solar panel installation businesses as of 2024, a number which increases each year.
In spite of ever-present climate gloom and underwhelming governmental climate agreements, 47 per cent of surveyed employers see efforts and investments to reduce their carbon emissions as a key driver of organisational transformation, falling to 41 per cent when discussing climate change measures in general.
The industrial sector, including automotive and aerospace, mining and metals, sees the most companies making efforts to decarbonise, with 71 per cent of employers in automotive and aerospace industries and 69 per cent in mining and metals expecting carbon emissions reductions to transform their business.
A key question emerging from this is whether or not we have the necessary workforce to service current and anticipated demand for climate change and decarbonisation products and services. Demand consistently outpaces supply in these areas, with a global 12 per cent increase in workers acquiring green skills between 2022 and 2023 coinciding with a rise in demand for these skills of just over 22 per cent.
Overall, while the skills needed in the labour market appear to be evolving at rapid rates, demand for technological and green skills is high and most likely to remain. Future-proofing yourself as a worker or your staff as a business leader means focussing on these skills for growth.
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23 December 2024
