Upgrading digital skills key to remaining relevant

Thirteenth out of 63.

That is where Singapore ranks in the latest World Talent Ranking, released recently by Swiss business school IMD.

The good news is that Singapore scores high (second) on its "readiness" for the new economy, which includes the quality of its education system, managerial competence and the international experience of its managers.

Were it not for its sluggish labour force growth (ranked 37th), it might have made the top spot for readiness.

Singapore ranks high (17th) on its "appeal", which encompasses its ability to attract talent, the quality of life and remuneration levels - although the ranking was dragged down by the high cost of living (59th).

The bad news is that it scores low (41st) on "investment and development", which includes public expenditure on education (59th) and female labour force participation (37th).

It also scores low on its effective personal income tax rate (45th) and so-so on employee training by companies (25th).

Although Singapore's public spending on education is the second-largest item in the Budget after defence, it is not generous enough compared with other advanced economies, particularly at the post-secondary level.

We spend about 3 per cent of gross domestic product on education. The Organisation for Economic Cooperation and Development average is close to 5 per cent and in some countries such as Denmark, it ranges from 6.5 per cent to 7 per cent.

The difference shows up in comparative education profiles.

While more than 52 per cent of Singaporeans aged 25 and above have post-secondary education, the corresponding figure for countries of the European Union is close to 80 per cent.

If we are to compete effectively in the digital age, we have some catching up to do. This will take years, but one way to speed up the process would be to make tertiary education free for all Singaporeans, at least up to a first degree.

Another recent survey released earlier this month by the Brookings Institution on trends in the US labour market had some startling findings.

First, jobs that need high digital skills jumped from 5 per cent in 2002 to 23 per cent last year; jobs needing medium digital skills rose from 40 per cent to 48 per cent; and jobs needing low skills dropped from 56 per cent to 30 per cent.

DIFFERENCE

Second, there are huge wage differences between workers depending on their digital skill levels. The mean wage for high-skilled workers last year was US$72,000 (S$97,000), compared with US$30,000 for low-skilled workers. In other words, digital literacy is now a key determinant of income inequality between workers.

Third, digital skills are a protection against automation.

The percentage of tasks susceptible to automation in low-digital occupations is nearly 60 per cent, compared with 30 per cent of tasks performed in high-digital occupations.

So if we are concerned about the impact of automation on jobs - which we should be - raising the level of digital skills must be a priority.

The Brookings study recommends that even workers without degrees need to have some knowledge of basic workplace software like Microsoft Office.

When it comes to developing skills and retraining, one problem in Singapore is that employers are not doing enough.

A survey by human resource company Hays earlier this year revealed that only 16 per cent of respondents from Singapore depend on employers to provide training and development.

At a time when jobs are being redefined or becoming redundant and the demand for new skills is rising, this must change.

An example of a company that is proactive in reskilling its staff is US telecom giant AT&T.

In 2013, AT&T identified a problem that should be familiar to other legacy companies: About 40 per cent of its 240,000 staff were doing jobs that in 10 years would be obsolete.

Instead of waiting to retrench workers and rehire people with the right skills, it chose to launch a retraining programme for its existing staff called Workforce 2020. It spent US$250 million on employee education and professional development and more than US$30 million a year on tuition assistance.

It developed a self-service platform that enabled workers to assess their own skills, identify gaps in their competencies and correct them.

By last year, the results began to show. Retrained staff were able to fill about half of all technology jobs and the product development cycle shortened.

Not many companies have the resources to do what AT&T did. But the core idea is to create a culture of perpetual learning, which has to go beyond the corporate world.

And we all must develop one vital quality: the passion to keep learning.

This article was published in The Business Times yesterday.