Introduction

In today's rapidly evolving global economy, skills have become the new currency. Gone are the days when a traditional education and a stable job were enough to guarantee economic success. The digital revolution, coupled with the rise of automation and artificial intelligence, has transformed the labour market, and placed a premium on skills.
In this the 5th article in the Currency of Skills series, Barry McAuley, Ryan Dempsey and James Harty examine the economic value of skills. How the real currency of skills helps the learner to have a skills savings account that they can use to increase their employability and impact.

Economic Impact of Skills

The economic impact of skills cannot be overstated. According to a report by the World Economic Forum, by 2022, more than half of all employees will require significant reskilling to keep up with the changing demands of the labour market. This reskilling revolution has the potential to boost global GDP by €6.5 trillion and create 5.3 million new jobs.

What is the price of a skill?

Stephany (2014) asks the question “What is the price of a skill?”. Skills have economic value both at the individual and societal levels. For individuals, acquiring and honing/refining valuable skills can lead to higher income potential and better job prospects. Skilled workers tend to command higher wages and have greater bargaining power in the labour market. Moreover, at the societal level, a skilled workforce is a driver of economic growth and competitiveness. Countries that invest in developing the skills of their population can benefit from increased productivity, innovation, and overall economic development. In Malta, for example, a key training policy measure was introduced focusing on the investment of skills to increase the productivity and adaptability of people currently working within the Maltese Labour Market. This initiative offered private companies’ financial incentives to use trainers and create training courses based on their profession, and teaching employee’s new skills to increase productivity and adaptability. While the cost of training is often a barrier to why companies do not engage with upskilling activities, a financial incentive at national level could be a possible solution to bridge the gap of skills shortages in the current climate.

The role of skills in entrepreneurship and innovation

Skills not only play a crucial role in securing employment but also in driving entrepreneurship and innovation. In today's competitive and dynamic business environment, successful entrepreneurs are those who can identify market gaps and leverage their skills to create innovative solutions. Skills such as creativity, problem-solving, and adaptability are essential for entrepreneurs to thrive in an ever-changing landscape.

To adequately exploit these gaps, entrepreneurs require an elective selection of skills that can embrace potential market opportunities and build relationships with suppliers. This includes staff with the ability to demonstrate critical thinking, creativity, problem-solving, and adaptability. Further to this entrepreneur must be able to react to the evolving digital landscape which bring further opportunities to streamline work processes and increase efficiency.

The importance of upskilling and reskilling in a rapidly changing economy

The world is changing at an unprecedented pace, and with it, the economy is rapidly evolving. This transformation is driven by advances in technology, globalization, and changing consumer preferences. This requires learning new skills to self-promote one’s worth to an organisation or reskilling in order to explore alternative ventures. Those who are willing to learn new skills and adapt to new roles will be better equipped to succeed in a world of constant change. In addition, organisation that invest in their staff are more likely to retain their employees

Within this rapidly changing economy, upskilling and reskilling are no longer optional; they are essential for career growth and survival. As technology continues to advance, certain jobs become obsolete while new ones emerge. To remain relevant and future-proof their careers, individuals must continuously upgrade their skills and adapt to the evolving demands of the labour market. In addition, organisation that invest in their staff are more likely to retain their employees and embrace opportunities to respond to new opportunities.

Skills investment

Investing in skills development is not only beneficial for individuals but also for businesses and the economy. Companies that prioritise employee training and development are more likely to attract and retain top talent. Moreover, individuals who invest in their skills enjoy higher earning potential, increased job security, and greater job satisfaction. From a macroeconomic perspective, a highly skilled workforce drives productivity and innovation, leading to overall economic growth.

Recognising the importance of skills in driving economic growth, governments around the world have implemented various initiatives and policies to promote skill development. From tax incentives for businesses that invest in employee training to funding programs for individuals to acquire new skills, governments are actively encouraging the development of a highly skilled workforce. These initiatives not only benefit individuals but also contribute to reducing unemployment rates and closing the skills gap.

Measuring the economic value of skills

Economic value skills are the specific abilities and competencies that have a direct impact on an individual's economic potential and value in the job market. These skills are highly sought after by employers and are often associated with higher earning potential and increased career opportunities.  From an employer’s perspective, companies who actively engage and encourage skills development can see benefits such as improved job performance, increased employee satisfaction and retention, enhanced innovation and improved organisational agility.

Specific economic value skills required may vary depending on the industry, job role, and the specific needs of employers. However, focusing on developing a combination of technical, analytical, interpersonal, and business-related skills can enhance an individual's economic value and increase their competitiveness in the job market.

Today, the concept of the skills economy has been proposed to recognise being highly skilled as a valuable currency while acknowledging technical skills for economic growth. This has caused a transformational shift in how professional value and success is perceived by businesses and individuals alike. By placing more emphasis on the individual skill set in the workforce, the traditional methods of credentials and job titles are challenged. Therefore, it is important that workers and students have the right learning tools and material available to enhance their prospects of thriving in a skills economy and being equipped with skills that are financially recognised. ARISE proposes to facilitate this concept by providing learning pathways in BIM and energy efficiency skills that will be recognised technically as well as economically valued.

With the ARISE platform, the learning pathway is built on the foundation of a qualification framework consisting of specialised areas of unit of learning outcomes (ULO’s) focusing on three main components: competence, skills and knowledge. With the learning pathway, the developed learning modules are suited to the skill set needs of the user. By completing learning pathways and earning micro-credentials in the form of digital badges, users are not only developing skills with associated monetary value (CERT-coin), but they are also contributing to the skills economy and are future prospects for their respective industries.

Conclusion

In conclusion, skills have become the new currency in the modern economy. They have the power to unlock economic opportunities, drive innovation, and shape the future of industries. To thrive in this skills-based economy, individuals must prioritise upskilling and reskilling, while businesses and governments must invest in skill development. By embracing skills as the new currency, we can unleash the full economic potential of individuals, industries, and nations.

In order to assist the economy in transition we must all embrace the power of skills and invest in our personal and professional development. We must stay ahead of the curve by continuously upgrading our skills and adapting to the changing demands of the modern economy. Remember, skills are the new currency for economic success.

References

• Skills supply and demand in Europe: Medium-term forecast up to 2020, Feb. (Thessaloniki). European Commission (EC). 2010. New skills for new jobs: Action now, report by the Expert Group, Feb. (Brussels).

• Women in the Workplace: McKinsey & Company: 2022, Ellen MacArthur Foundation, What is Circular Economy? Available online: https://ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview (accessed on 30, 6th, 2023)

• European Commission, Internal Market, Industry, Entrepreneurship and SMEs. Available online: https://single-market-economy.ec.europa.eu/industry/sustainability/buildings-and-construction_en (accessed on 30, 6th, 2023) 

• World Energy Outlook  https://iea.blob.core.windows.net/assets/830fe099-5530-48f2-a7c1-11f35d510983/WorldEnergyOutlook2022.pdf

• Skills Matter – up-skilling across construction stakeholders for emerging roles: 2022:  Behan, Cormack and McAuley