With the unprecedented economic developments in Asia and the dramatic changes rattling through many industries, companies need to ensure that they are ready to embrace the disruptions and fend off potential skills gaps and talent shortages.
The driving forces behind these changes are a series of global megatrends, to include demographic change, climate change, technological progress, urbanisation, globalisation as well as the digitisation of the economy and the convergence of industries.
A new paper released today from The Economist Corporate Network (ECN), Skills 4.0: How CEOs shape the future of work in Asia, reveals that majority of CEOs believe megatrends matter, but most of the skills required for their businesses to respond to global megatrends are new skills that they neither appreciate nor use today.
The survey, based on ECN’s more than 500 clients, was conducted across Asia Pacific in September and October 2016. It examines how business leaders in Asia perceive their own strategic role in shaping the future of work and the types of skills required.
The report states that skills are an essential resource in the knowledge economy of the 21st century. Some are seen as opportunities and others as threats (Charts 1 and 2).
“Megatrends matter,” said Florian Kohlbacher, Director of the Economist Corporate Network North Asia and author of the report. “Executives are increasingly gearing up to face the challenge of strategically managing business responses to these mega changes.” But according to the survey, only a small number of CEOs are confident that their company is completely prepared to deal with these trends (Chart 3).
It has also become obvious that the key skills required in the future are soft skills, including problem solving, coordinating with others and people management, with 71.9 percent of the surveyed CEOs believing that soft skills are more important than hard skills for their business (Charts 5 and 6).
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Hard skills include computer programming and machinery operations. The key challenges that CEOs face when trying to shape the future of work are: communication of skills management strategy, getting the right structures in place, and time constraints.
The survey findings also show that 90 percent of CEOs claim to be personally involved in making sure their company has the right skills, however only 4 percent said that this was not the case. More involvement is seen as crucial.
“CEOs will have to reconsider the priorities to make sure their businesses are staying ahead of the curve. Time constraints are obviously a classic conundrum for executives. But given the rising importance of megatrends, mega changes and skill development, it’s about time that CEOs break these time constraints and become more actively involved in these strategically important decisions,” added Kohlbacher.
Managing the business responses to these trends and developing the organisation’s human capital to equip them with the skills needed in this environment is a key challenge for businesses.
Communication of the skills management strategy, getting the right structure for skills development in place and CEO’s time constraints are the key challenges, with almost 50 percent of CEOs feeling time constraints keep them from becoming as involved in skills and skills development decisions as they would like to be.
More than 80 percent of CEOs believe that megatrends affect their companies. Technological progress is seen as the most important trend, with almost 60 percent of CEOs stating that it strongly affects their company.
Climate change (23 percent) and industry convergence (26 percent) are the trends that are the most often viewed as a threat by CEOs. The skills required are likely to comprise of both soft and hard skills, including people, technological and business skills. While hard skills can be more easily acquired, and often conveyed through in-house training, soft skills are much more difficult to build.
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