Digital economy investments have traditionally focused on infrastructure such as broadband and telecoms. This is important, but not enough due to two major trends. First, living standards are rising across the globe, and the internet is raising worker aspirations. Today, a majority of the world’s population regularly use the internet1. Both living standards and internet usage continue to rise rapidly. Being connected, especially with social media platforms, has increased worker aspirations. But when these rising aspirations are not met with opportunity, it creates frustration - especially for the most vulnerable groups2. Second, jobs - and most notably skill requirements – are changing due to new technologies. These circumstances mean countries must invest to build human capital and prepare their workforce for a digital future that requires more frequent reskilling.
Our research using LinkedIn data reveals a number of additional insights that could help policymakers better prepare for the future. First, countries may be able to benefit from the digital economy sooner than they think. For example, countries across the development spectrum and geographic locations are seeing strong employment growth in digital industries like Internet, Computer and Network Security, and Computer Software industries in the last years. These industries are no longer constrained to high income countries.
Second, education and workforce training should focus on building soft skills (also known as socioemotional skills) along with technical competences in a digitally connected world. Out of the top 10 skills that rose the most in penetration globally across all industries and occupations on LinkedIn, 4 were technical, 3 business-oriented, and 3 were soft skills. These trends indicate that a variety of skills are likely to remain important and create opportunities for workers of varied backgrounds.
Finally, developing countries should develop strategies that tap into global diaspora networks. According to LinkedIn data, a majority of developing countries net lost talent to High Income countries in the last three years. Out of the top 20 countries gaining the most talent, only 6 out of 20 were middle or low income countries; but 19 of the bottom 20 countries losing the most talent in tradable sectors were middle or low income countries. But not all of this is bad news - across all years that LinkedIn has data, 11% of workers that leave eventually return to their home country - and bring back new knowledge and expertise.
of the target (or selected) country during the time period, multiplied by 10,000.& Source: LinkedIn Data
The same LinkedIn data also shows developing countries were most likely to lose frontier digital economy skills to High Income countries, like Cloud Computing, Artificial Intelligence, Software Testing, and Data-Driven Decision Making but are able to retain foundational skills like Research, Digital Literacy, and Business Management. Given the digital economy space is borderless and the physical location of employees is increasingly less relevant, regional programs that promote talent exchange and collaboration should be considered to partially offset any challenges associated with talent loss while continuing to invest in transversal foundational skills.
As part of its vision to bring economic opportunity to every member of the global workforce, LinkedIn has partnered with the World Bank Group to share Digital Data for Development for over 100 countries to help governments around the world invest in their people and prepare for the jobs of the future. The LinkedIn and World Bank Group collaboration is a prime example of how technology companies can work with development institutions to bring new data and insights to developing countries to address some of the most pressing challenges together. The opportunities and challenges presented by the digital economy requires the public and private sectors to join forces, share information, share resources, and work towards a common vision to make meaningful, positive and scalable impact.
1 Over 5.5B people - live in middle-income countries, and nearly 46% of individuals regularly use the internet. Some studies estimate that by 2025, all 8 billion people around the world could have access to broadband.
2 shows that if an individual’s reference income goes up 10 percent, on average, their income has to go up at least 5 percent just to maintain the same level of satisfaction. The trade-off is even larger for poorer people – for the bottom 40 percent, if their reference income goes up 10 percent, their actual income has to go up 20 percent just to maintain the same level of satisfaction