The future of learning is working: How to boost skill development in the workplace

We’re living through one of the most profound shifts in the nature of work and business in human history. In 1975, over 80% of the market value of S&P 500 companies was tangible assets such as factories. Today that has flipped – and more than 80% is represented by non-physical assets such as data or software.

That’s driven by an exponential acceleration in technology development. The rapid rise of generative AI tools that are transforming the way we work; the shift to prioritize green energy and carbon neutral development; advances in the collection and analysis of data using machine learning.

These advances can potentially create a productivity surge and even solve huge global and societal challenges. But they also can potentially push millions out of the working world. Many workers now face the real risk of displacement with the rise of generative AI, and as many as 400 million jobs are in danger, according to an analysis by McKinsey. This threat is not distributed equally: Research by Multiverse and the Burning Glass Institute shows that high-churn, low-wage occupations are far more susceptible to automation.

This is putting pressure on an already creaking traditional education system. There has always been a substantial gap between what is taught in school and college and what is needed in the working world. We hear that from employers regularly. Business leaders increasingly say that graduates are qualified in theory but not in practice: They need an average of 11 months of on-the-job training before they become fully effective in their role.

Now, that gap is becoming a chasm. The workplace is demanding skills fit for the 2020s and beyond – like the ability to use AI, develop software and manage databases. But schools and universities are stuck teaching curricula that focus more on knowledge than skill in a style that has evolved little since the 1990s.

This disconnect between education and work creates the impression that education is the journey, and work is the destination. The system tries to deliver 21 years of learning, followed by 45 years of working with few opportunities to further that learning. Indeed, 47% of workers have done no workplace training in the last five years.

In this age of digital transformation, learning needs to be ongoing. Education and working can sit together: working in tandem to continuously guide people’s careers while taking companies and society with them towards economic growth. This is work-based learning: training grounded in practice, not in theory and taught in an applied setting. Done well, this learning style emphasizes the most relevant skills for jobs, thereby enabling economic mobility.

And most importantly of all, it creates equitable opportunity by ensuring that education isn’t just available to those who can pay for it or take time out of work. When you learn on the job, access to education isn’t reserved only for those with the economic means to pay for it. Work-based learning, unlike classroom learning, can be continuous and delivered throughout a career, as and when needed.

Making work-based learning accessible to everyone will be transformative for individuals, businesses and societies. But it will also be challenging and requires the combined might and will of policy-makers, business leaders and educators.

Here, there are strong examples to learn from. Where governments incentivize work-based learning, businesses will follow: In the US, you can see a strong correlation between the states with tax credits for apprenticeships, and where apprenticeship uptake is greatest. In the UK, the levy has created more apprenticeships in professional sectors and IT, where the need for skills is greatest.

Corporate leaders can take action by keeping skill development at the heart of their digital transformation strategy. Buying top-of-the-range data analytics software or investing in AI tooling has limited benefits if the people within a business do not have the skill set to capitalize on those investments. Businesses should ensure they fund their workforce's skills as much as they invest in technology.

Businesses should, in particular, look to reskilling for those in their workforces who are at risk of displacement by automation. Reskilling can put people in control of emerging technologies rather than at their mercy. For businesses, it means building in-house a generation of technology leaders with institutional knowledge and dedication rather than the expense of bringing that talent in from the outside.

Finally, traditional educational organizations have a role to play by better integrating workplace scenarios into their teaching. Schools and universities are under renewed pressure to ensure the things they teach are relevant to the world outside of the classroom walls. Harvard’s Project on Workforce recently published recommendations for educators to strengthen the link between degrees and jobs, including a greater emphasis on team-based exercises and recognition of paid work placements.

As long as we view education and work as two separate entities, the gap between people's skills and society's needs will only widen.

Businesses can’t keep leaving learning in the hands of educational institutions, and educators can’t keep ignoring the reality of work. By bringing together learning and work, we can build a cohort of individuals with the skills to thrive and lead as technology develops, an economy that is fit for the future and adaptable to changing tech needs, and a society with the right businesses and people to take on some of its biggest challenges and opportunities.