McKinsey: Reskilling China for digitised economy by 2030

By Janet Brice
The largest workforce on the planet can be successfully reskilled for a post-industrial economy states a new McKinsey Global Institute report...

With China’s economy undergoing rapid change, increasingly driven by services and innovation and becoming ever more digitised and automated, some 30 per cent of the country’s workforce may need to retrain and change jobs by 2030. That’s according to a new report released in January 2021 by the McKinsey Global Institute (MGI). 

The report, entitled Reskilling China: Transforming the World’s Largest Taskforce Into Lifelong Learners , argues how China, which has the world’s largest workforce of 220 million workers, will need to transform its system of education and skills development to deliver the talent that is needed for “an innovative, digitised, post-industrial economy”. 

Without change, China faces skills shortages

In the last 30 years, China has achieved tenfold growth in incomes and labour productivity and a 13 x increase in GDP. However, with the country transitioning from being led by investment and manufacturing to being driven by consumption, services, and innovation, and with the global rise in automation and digitisation, rapidly accelerated by the pandemic, China must transform its education and skill-development system if is to “sustain its continuing increases in per capital GDP and wages”. 

The report reveals that up to 2030, some 220 million Chinese workers, or 30 per cent of the workforce, may need to transition between occupations and that demand for physical/manual and basic cognitive skills could fall by 18 per cent and 11 per cent, respectively, with demand for social and emotional, and technological skills rising by 18 per cent and 51 per cent, respectively. 

This poses particular challenges for China, which has an education system built on serving the industrial economy, and whose “rural-urban migrants, who numbered 291 million in 2019, especially as 22-40 per cent of their work is susceptible to automation”. 

China must embrace Everyone, Everything and Everywhere

In the report, MGI assesses China’s education and training system today with an economic lens and puts forward three keys to China’s education transformation: Everyone, Everything and Everywhere. 

  • Everyone – Move beyond schools to vocational training available in both urban and rural areas, and to everyone 24/7 by utilising digital technologies, covering three times as many people as are enrolled in the education system today by 2030. 
  • Everything – Change content to equip Chinese with high cognitive, social and emotional, and technical skills that are likely to be in demand by an additional 236 billion hours by 2030, or 40 days per average worker. 
  • Everywhere – Make education/training ubiquitous, available to all throughout their lives, and in all areas, rural and urban, including to migrant workers. 


Four levers to kickstart reskilling change

With such a transformation on the scale needed such a huge undertaking, the report suggests establishing best practice in China in smaller-scale pilots before scaling up to national level, and following a survey of best practice in China and worldwide, highlights four levers that China could use to kick-start such changes and that could lead to significant impact on education and skills development by 2030. 

  1. Adoption of Digital technologies – to enable more engaging, multichannel learning
  2. Expansion of public-private partnerships - to fill the gap between available skills and those demanded by employers, such as the bachelor’s degrees already being offered by the Alibaba Business School
  3. Enhanced vocational tracks – providing more attractive options to high school students and delivering multiple entry points giving workers flexibility to return
  4. Develop culture of lifelong learning – offer a ‘micro-credential system’ to promote a continuous learning culture and companies incentivised to invest in training and offer ‘corporate universities’

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