Global supply chains – and the countries at their center – find themselves at a crossroad in a rapidly changing world as they face mounting geopolitical volatility, economic uncertainty, and high inflation and commodity prices.
At the same time, the confluence of the Fourth Industrial Revolution, shifting worker and consumer expectations, and the urgent need for a more sustainable economy are triggering significant changes in the labor market and propelling demand for novel occupations and skills.
Globally, around 23 percent of jobs are expected to change in the next five years, with 69 million new jobs created and 83 million eliminated. In the MENA region a slight net increase is expected in the same period, approximately 21 percent of jobs will undergo changes, with 11 percent experiencing growth and 10 percent facing decline.
While the world is at a critical juncture of disruptive change, this period also offers an opportunity for policymakers to shape these transformations and ensure that they translate into better jobs and opportunities for all. The World Economic Forum‘s Future of Jobs Report 2023 sheds light on the jobs and skills outlook. Its findings can help prepare leaders for the disruptions and opportunities to come, empowering them to navigate these geopolitical, environmental and technological transitions.
Read: Most in-demand jobs in Saudi Arabia
Shifting global supply chains
Geopolitical tensions are introducing uncertainty and volatility to global supply chains. Both the United Arab Emirates and Saudi Arabia are among the top 10 countries that expect supply shortages and related rising input costs to transform their economies. Some 80 percent and 85 percent of respondents in the two nations respectively expect these forces to drive business transformation – compared to 69 percent globally – and a net 25 percent and 10 percent expect these trends to drive job decline.
Nevertheless, the reconfiguration of global supply chains can present an opportunity. The UAE tops the global rankings of countries that expect the localization of supply chains to drive business transformation, with 77 percent of respondents expecting this to be the case compared to 60 percent globally, while a net 50 percent expect this to drive job creation.
The green transition
The urgent need to shift toward a carbon-neutral and more sustainable global economy paints a comparable picture of challenges and opportunities. Leading producers of fossil fuels may see their traditional industries disrupted and substantial investments will be needed to adapt to these changes and further diversify their economies.
At the same time, investments in the green transition, as well as increasing consumer interest in sustainability, will create new opportunities. Businesses expect roles from renewable energy to sustainability specialists and environmental protection professionals to be in high demand. A case in point is Saudi Arabia, the world’s second leading oil producer, where investments to facilitate the green transition are expected to increase jobs in the Kingdom, with a net 65 percent of businesses expecting it to have a positive impact on jobs. In the UAE, a broader application of ESG standards is expected to create jobs, with a net 52 percent of businesses expecting it will increase jobs.
The rise of new technologies
The rise of new technologies may be the most transformative driver of workforce change. Tech innovations are expected to create structural churn in the job market, with a quarter of companies globally expecting this to drive job decline and more than half expecting to see job growth. While expectations of the replacement of physical jobs by machines have slowed, tasks requiring traits with a comparative advantage for humans – such as reasoning, communication and coordination – now suddenly seem more automatable given the growth of artificial intelligence. In the future, interpersonal skills and life-long learning will become even more important.
In this rapidly evolving landscape, several Gulf Cooperation Council states are positioning themselves to harness the potential of AI and big data. Saudi Arabia leads the way, with 52 percent of businesses surveyed already focusing their reskilling on AI and big data, while the UAE and Bahrain also exceed the global average at 43 percent and 45 percent. In addition, all three countries anticipate that AI adoption will drive substantial job growth, surpassing the global average expectation.
Changing skills for a changing world
In this rapidly evolving global environment, acquiring new skills will be imperative for individuals to navigate the shifting job market. Globally, we found that on average almost half of an individual’s skills will have to change in the coming years.
Investing in comprehensive re-skilling or upskilling programs today will not only equip workers with the tools needed for emerging job opportunities but also enable these countries to thrive in the sustainable and diverse economies of tomorrow.
According to our findings, GCC countries rate skills gaps in the local labor market – UAE at 74 percent, Saudi Arabia at 68 percent and Bahrain at 66 percent – as the top barrier to industry transformation by a significantly higher proportion than the global average of 60 percent. All three countries rate funding for reskilling and upskilling as the top policy practice to increase talent availability.
Adapting to these changing demands will be crucial for individuals and economies alike. Countries that embrace the potential of emerging technologies and the green transition, while prioritizing continuous learning of their workforces, can position themselves at the forefront of the global workforce transformation, leading to sustained growth and prosperity in the uncertain years to come.
For more on the economy, click here.
Elselot Hasselaar is head of mission on work, wages and job creation at the World Economic Forum
