Asia’s major reskilling challenge

The Asia-Pacific (APAC) region faces a large skills gap in the age of AI, and a “common language and clear classification of skills” is necessary to start fixing the problem. That’s according to a new report called Bridging the Skills Gap: Fuelling Careers and the Economy in Asia-Pacific from Economist Impact, supported by Google.

The report, which examines reskilling and upskilling across 14 markets in the region, classifies the skills gap as an “increasingly critical” problem as industries across the region rapidly adopt new technologies. Some 60-80% of APAC organizations are affected, highlighting the urgent need for skilled professionals to meet emerging demands. 

‍Economist Impact surveyed 1,375 employees from 16 industries, working with a team of researchers and interviewees, including SkyHive CEO and Co-founder Sean Hinton, as well as SkyHive’s Muneaki Goto, who is also the Representative Director of the Japan Reskilling Initiative. In this article, we’re going to cover the report’s main findings. 

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86 million workers must be upskilled or reskilled

One of the most alarming findings of the report is that around 86 million workers in the APAC region need to be upskilled or reskilled. This shortage is more pronounced in areas such as data analytics, cybersecurity, artificial intelligence (AI), machine learning (ML), and cloud computing, mirroring the growth of digital skills demand in other parts of the world. 

The report also found that the aging of the population is adding to the skills shortage. “By 2050, one in four people in APAC will be aged 60 or older, signaling that the population is aging at a pace unmatched elsewhere in the world,” Economist Impact says. The impact is concentrated in certain professions. “Younger populations are not putting up their hand for the fundamental jobs that deliver the fabric of an economy such as nurses, teachers, and social workers,” Hinton says in the report.

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Highlighting the digital skills divide

Despite widespread internet access across the Asia-Pacific (APAC) region, a significant portion of the population remains digitally unskilled, creating a paradox where access to tech doesn’t equate to digital literacy. About 30% of the population lacks word processing, email, and Internet skills.  

Additionally, an Amazon Web Services (AWS) and Gallup study found that 72% of workers in APAC do not use computers at work, further highlighting the massive digital skills gap. This issue varies significantly across the region, with non-digital workers making up only 24% of the workforce in Australia but soaring to 83% in India. The economic implications of this gap are clear: workers who possess advanced digital skills contribute an estimated $934 billion annually to the region’s GDP, showcasing the significant role these skills play in national economies. 

The absence of digital skills has serious consequences. They reduce employability on a personal level, as more jobs require these skills to compete in a rapidly evolving market. This divide also fuels income inequality; workers with advanced digital skills earn 65% more than their non-digital counterparts, despite similar education levels. Without these skills, many people miss opportunities to access online learning and fully participate in the digital economy.

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Growing demand for green skills

Our report found that the APAC region also has a rising demand for green jobs, mirroring global trends toward sustainability. Youth in the region are particularly drawn to this sector, with 77% aspiring to work in the green economy within the next decade. Between 2016 and 2021, the region saw a 30% increase in green job hiring. This growth is supported by the broader market potential of green businesses in Asia, which is expected to reach between $4-5 trillion by 2030.

However, translating this demand into career paths is not without its challenges. There is a significant skills mismatch, as many potential workers lack the specific expertise required for green jobs. Hinton says in the Economics Impact paper that “green is going to represent a big part of the next five years in terms of job creation,” but that there’s uncertainty around how “green skills” will “translate into a career.”

Policy gaps will also present a challenge. Only three out of ten ASEAN countries have substantial policies focused on developing skills for green jobs, limiting opportunities for young people in the region.

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Organizational and talent leaders need skills intelligence

This uncertainty is true not just for green jobs, but for all jobs. Employees often don’t know what skills they need, and some employers don't keep track of what’s required in different roles. Hinton says in the report that this “underscores the need for a comprehensive skills taxonomy that provides a common language and clear classification of skills.” Only then can transformative skills-based workforce planning take place.

What Hinton means by this is that leaders need a structured, hierarchical classification system that categorizes and describes the full range of skills relevant to an organization or industry. That’s what a skills taxonomy is. It provides a standardized framework for identifying and organizing skills, serving as a common language that facilitates communication across different roles, departments, and even industries. Four important components are at play here:

• Hierarchy: Broad categories like "Technical Skills" are identified at the top level. As you move down, these categories become more specific. For instance, under "Technical Skills," a second level could include "Programming Languages," followed by "Object-Oriented Languages," and finally specific languages such as "Java."

• Standardization: A skills taxonomy provides consistent definitions and terminology. This minimizes ambiguity and misinterpretation and enables clear communication within and between organizations about job requirements, employee competencies, and training needs.

• Granularity: Skills taxonomies also provide granularity. This is a detailed description of skills, allowing for the precise identification of competencies. This level of detail ensures that skills can be matched accurately to roles, reducing the risk of misalignment between job descriptions and employee capabilities.

• Flexibility: Taxonomies must also be capable of evolving to accommodate emerging skills and changing job requirements. As industries and technologies change, the system can be updated to reflect new trends and remain relevant. 

Simply by establishing a shared vocabulary across an organization, a skills taxonomy facilitates clearer communication about job roles, employee development, and performance expectations. This common language makes it easier for employers and employees to understand each other’s needs and capabilities.

An organization’s skills inventory and taxonomy form a wider part of its overall skills intelligence: The process of learning who has which skills, analyzing how they are applying those skills on the job, and making decisions on how they can develop them through learning opportunities.

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Why skills intelligence matters

Skills intelligence matters because with nearly 83% of HR leaders struggling to find talent with the necessary skills, a clear, unambiguous understanding of current and future skill requirements is essential and has become a baseline requirement for talent teams. 

Why? Because this understanding enables smarter decisions about hiring, training, and development. It helps close skills gaps and allows talent teams to build and nurture an agile workforce that’s equipped not just to meet the needs of today but also the needs of tomorrow.

Considering that researchers have estimated that global talent shortages could lead to $8.5 trillion in unrealized revenue by 2030, talent teams prepared to put in the work needed to become a skills-based organization could see a huge payoff as the future of work continues to evolve.

If you want to learn more about the APAC skills gap and how skills intelligence solutions could help solve it, read the free white paper from Economist Impact.