In the last decade, companies everywhere have begun to understand that sustainability is no longer just an optional extra. Now that we have truly woken up to how our actions will affect future generations, we know that neither our businesses nor our society will have much of a future without sustainable thinking.

Increasingly, however, sustainability is also good for business in the here and now. Good ESG (Environmental, Social and Governance) performance is known to create higher return on investment, encourage resilience in crises, and attract preferential attention from investors – particularly asset managers who need to report on their investment decisions in a clear way.

Today, one of the biggest sustainability question marks is how our global economy will adjust to the ongoing automation of traditional manufacturing and industrial practices, otherwise known as the Fourth Industrial Revolution. Clearly, the viability and health of our societies will soon depend on equipping large numbers of workers with the skills to fill roles in a new digital economy. We believe that skill-based initiatives being reflected in ESG reporting is invaluable because companies that digitally upskill their employees are a key part of social sustainability. This accountability is critical for our economic future because it ensures that the world has a steady workforce instead of a declining one.

The future of work

The disruption of COVID-19 has also made this a more urgent matter. In the US, there are now 10 million fewer jobs than before the pandemic, and unemployment is still well above its pre-COVID rate. At the same time, the proportion of lower-skilled manual jobs has been shrinking for years. One-quarter of US jobs are at risk of automation, and McKinsey estimates that 4.9 million US workers will need new skills to remain employed in a digital economy. Never mind the fact that many people who left their lower-skilled jobs during the pandemic simply do not want to return, especially in the hospitality sector where one-third of former hospitality employees in a poll said they would not be returning to the sector due to poor pay and lack of benefits.

In the rest of the world, the picture is similar. The global number of digital jobs is set to grow from 51 million this year to 190 million in 2025. In India, the world’s biggest labour market, only 12% of the workforce has digital skills – yet demand for skilled tech workers is expected to increase nine-fold by 2025. Recently, a World Economic Forum panel highlighted that 3.7 billion people around the world still lack internet access – a problem that needs to be solved before we can make any progress on digital skills globally. So, it is of no surprise that, in India where companies have been reaching unicorn status at an unprecedented rate this year, many of those companies are focusing on upskilling and reskilling the workforce.

Without a major boost to digital skills, economies are not going to be able to fill their digital needs, create new opportunities in developing economies, or reduce unemployment and underemployment rates in the long term. Because the cost of higher education makes it an unaffordable route for so many, employers need to fill the gap themselves. But in the US, investment in training by employers hasn’t grown quickly enough to match the economic needs of the last decade, especially in the area of digital training. Despite it becoming more and more available, companies have yet to really latch on to the idea of upskilling their employees digitally, instead of the less accessible, more antiquated in-person training.

The benefits of upskilling

In fact, there are huge advantages for companies that digitally upskill their staff. Those that do can expect to create a lot of value, not just for communities and the wider economy, but for their own businesses too. A PwC study from 2020 found that companies with the most advanced upskilling programmes saw three times the improvement in innovation.

Upskilling may even have wider environmental benefits. The more digitally literate we are, the more we are able to create efficiencies that contribute to environmental sustainability. For example, in the UK, self-starting student Elliott Lancaster has been nominated for the Chegg.org Global Student Prize for his Utter Rubbish app that improves recycling and waste dumping in his local area by connecting citizens to local government services. Likewise, giving both graduate and non-graduate workers access to the latest digital knowledge may also empower them to drive efforts that will either make their communities more sustainable or create unprecedented economic opportunities, addressing the inequities that prevent societies from being stable.

As our economies become more digital, employers have an increasing duty to give employees the chance to boost their skills. So when companies accept this responsibility and take action to upskill, we must also ensure this is recognized and applauded as a contribution to sustainability. Encouraging companies to do the right thing will benefit everyone – and help us meet the challenges of the digital age without leaving anyone behind.

Marex Media