Microsoft is launching a global skills initiative aimed at bringing more digital skills to 25 million people worldwide by the end of the year. This initiative will bring together every part of the company, combining existing and new resources from LinkedIn, GitHub, and Microsoft.1
To understand why Microsoft is doing this, we first need to understand capitalism, the pandemic and the need for new skills.
Capitalism has caused massive inequalities, the pandemic has only deepened them
To set up a factory, a hundred years back, you needed land, a big building and machinery. Further huge investments were required in storing the goods you made and then shipping them off to buyers. This meant large investments in capital. Capitalism as a system therefore prioritised and incentivised the creation of capital. Investor returns took precedence over everything else, making money was the role of business. Today, almost the entire world operates according to this philosophy, where private capital is used to generate goods and services for profit.
This system has worked well for the last century, but things are different now as the world is becoming digital.
In the digital world, everything moves faster and enables many new connections. Information travels from one end of the world, enabling both extraordinary collaboration and consumption. Teams can now work with each other irrespective of location. Unlike the past, products many times are available as a seemingly endless flow; digital music, kindle books, shared cars and more. We have at one level, moved from an acquisition-led system to a need-led system where we consume when the urge strikes because several product and service categories now are so readily and perpetually available. Even in the pandemic, while the flow of physical goods stopped, the digital world accelerated. Netflix viewing reached stratospheric levels, Zoom calls zoomed multiple times over and this trend was seen across digital platforms.
With increasing digitization and rapid technological enhancement, we are already in the post industrialisation era – a part of the massive digital revolution impacting almost everything around us. The World Economic Forum calls this phase the Fourth Industrial Revolution.
Compared to industrial economies, digital enterprises are markedly more asset-light. To create more services technology companies don’t need more people, or land or machinery because software is endlessly replicable. Hence they can continuously focus on better technology to reduce input cost and labour and maximise returns for themselves. So, while new-age companies need capital, it takes much less to generate equivalent cash flow. Capital is therefore no longer the scarcest ingredient in their economic success formula and accumulating large amounts of capital becomes possible.
Moreover, the benefits of technology are not leading to equitable growth in incomes. Rapid technological progress, may or may not lead to lead to productivity growth for many reasons. The simplest way of explaining this without getting into economic models is that, unless the surplus generated through automation is ploughed back into the economy for human welfare, the surplus simply resides with the owner of the technology. As a person gets more affluent, there is a limit to how many cars and clothes one can buy, the outcome of this is huge economic inequalities and concentration of power; and, this is precisely what is happening. New age automation is not having a uniform effect on employment and the global trends of falling growth, a shrinking middle class, reducing jobs and an huge increase in inequality are just the beginning.
The wealth of the world’s billionaires increased by twelve per cent or $2.5 billion a day in 2018. A new billionaire was created every two days between 2017 and 2018. Meanwhile, the poorest half of humanity, 3.8 billion people, saw their wealth shrink by eleven per cent. Just under half the world’s population subsists on less than $5.50 a day – one school fee or medical bill away from falling into extreme poverty. While women’s work is the bedrock of our economies, they do not see the benefits. Globally men earn 23 per cent more than women and own 50 per cent more wealth.2 India is no stranger to income inequality, but the gap is widening further. The richest 10 per cent of Indians own 77.4 per cent of the country’s wealth, says Credit Suisse in their 2018 Global Wealth Report. The bottom 60 per cent, the majority of the population, own 4.7 per cent. The richest 1 per cent own 51.5 per cent.3
The pandemic has further accelerated inequalities as it has resulted in widespread recession, job losses and people falling back into the quagmire of hunger and poverty from which they had emerged. Advanced economies are projected to shrink 7 percent. That weakness will spill over to the outlook for emerging market and developing economies, who are forecast to contract by 2.5 percent as they cope with their own domestic outbreaks of the virus. This would represent the weakest showing by this group of economies in at least sixty years.4 Every region is subject to substantial growth downgrades. East Asia and the Pacific will grow by a scant 0.5%. South Asia will contract by 2.7%, Sub-Saharan Africa by 2.8%, Middle East and North Africa by 4.2%, Europe and Central Asia by 4.7%, and Latin America by 7.2%. These downturns are expected to reverse years of progress toward development goals and tip tens of millions of people back into extreme poverty.
In such a scenario, the questions that everyone is asking are, When will jobs return? Will there be an economic recovery?
To answer this we need to look at the large employers and the skills they need for the post pandemic recovery. Top most amongst these is the need for digital skills.
Digital has accelerated and so has the need for new digital skills
The pandemic has devastated the world of work, causing massive human suffering and laying bare the extreme vulnerability of many millions of workers and enterprises. The latest ILO estimates are that the large scale workplace closures around the world in response to COVID-19 have led to a reduction in hours worked of 10.7 per cent worldwide in the second quarter of this year. That translates into the loss of 305 million jobs –calculated on the basis of a 48hour working week.5
Pushed by the new realities, businesses are going digital at an unprecedented rate. They are also prioritizing safety, remote monitoring and digital knowledge. The nature of jobs is therefore changing. The pandemic and resulting shocks have caused years of progress in moving towards digital technologies to happen within months. This has also meant that for people to get back to work, new skills are needed. While countries have launched skills initiatives and companies have spoken about the need for new skills, nothing quite matches up to the scale of actual requirements. For instance, the construction sectors won’t just need electricians, masons and plumbers; they will need operators who can fly a drone to monitor the project site. Project managers will need staff who can take the temperature of the workers and add it to the health and safety mobile app. Basic knowledge of data entry, scanning, digital photography, remote maintenance will be necessary in construction. Hence, with unemployment at an all time high and industry wanting workers with different or enhanced capabilities this is the time to scale skilling infrastructure across the world and rapidly match it to industry needs.
Over the next five years, Microsoft estimates that the global workforce can absorb around 149 million new technology-oriented jobs. Software development accounts for the largest single share of this forecast, but roles in related fields like data analysis, cybersecurity, and privacy protection are also poised to grow substantially. Microsoft’s skilling project will be grounded in three areas of activity:
- The use of data to identify in-demand jobs and the skills needed to fill them;
- Free access to learning paths and content to help people develop the skills these positions require;
- Low-cost certifications and free job-seeking tools to help people who develop these skills pursue new jobs.
Navigating these challenges requires a collaborative approach across the public, private, and non-profit sectors which the Microsoft initiative seeks to address by giving grants to various non-profits and involving other stakeholders. In these dark times, the Microsoft initiative offers a ray of hope to people across the world who are seeing jobs disappear and don’t have the funds to adapt to the rapidly changing, digitizing work environment.
This is how responsibility is done at scale.
But the world needs more than just one company teaching digital skills. The ways of imparting knowledge need to scale and adapt to new realities.
We need a transformation that involves, learners, teachers, new content and new institutions.
- Learners (young and old) and even corporate teams need a new set of skills and new courseware that is relevant
- Teachers themselves need to be reskilled even as they deliver something very different for a new world
- Content is needed for a new way of learning and discovery for the new world of jobs. This also includes content and processes that are cloud-first. Further, all this needs to be done keeping in mind the new technologies that are emerging and the new types of content that can be created using them.
- New / Redesigned Institutions are needed where new journeys need to be mapped and studied.
These efforts however need to be supplemented with new opportunities such as green jobs.
New technologies such as AI, Machine Learning, Augmented Reality (AR), Virtual Reality (VR), Internet of things can help scale and maybe even solve some of the energy, biodiversity and climate challenges facing us today. New Greenpeace research shows that a green recovery plan could create 1.8 million new green jobs in UK6. These new jobs would put people to work making the UK’s energy, transport and housing greener. They’d also provide a crucial lifeline for young people, workers moving away from polluting industries, and the people facing unemployment after coronavirus. Another recent report from WEF and the New Nature Economy project says that tackling the global nature crisis could create 400m jobs and $10tn (£8tn) in business value each year by 20307. The report says, a nature-first approach from business and political leaders will be a jobs-first solution.
Green jobs linked to digital skills could benefit both the economy and the environment, and include everything from alternative fuels to tasty foods. Further, significant work needs to be done at the policy level to enable new kinds of jobs that are good for people and the planet.