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NATIONAL PRIORITIES
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Figure 5.7 The types of skills needed in a modern economy
Cognitive
Literacy, numeracy, and
higher-order cognitive skills
(for example, reasoning
and creative thinking)
Raw problem-solving ability
versus knowledge to
solve problems
Verbal ability, numeracy,
problem solving, memory,
and mental speed
Social and behavioral
Socioemotional skills and
personality traits
Openness to experience,
conscientiousness,
extraversion, agreeability,
and emotional stability
Self-regulation, grit, mind-set,
decision making, and
interpersonal skills
Technical
Manual dexterity and the use
of methods, materials, tools,
and instruments
Technical skills developed through
postsecondary schooling or
training or acquired on the job
Skills related to specific
occupations (for example,
engineer, economist, IT specialist)
Source: WDR 2016 team, adapted from Pierre, Sanchez Puerta, and Valerio 2014.
Note: IT = information technology.
Digital technologies accelerate the pace of labor
market changes, opening new opportunities but also
making skills obsolete more quickly. This calls for
more adaptability from individuals and institutions,
a stronger link between educational and training
institutions and the private sector, and policies that
promote lifelong learning. Since skill development
starts at birth and is lifelong, a life-cycle approach to
learning is necessary. 14
These two labor market transformations—changing
skill mix and rapid skill obsolescence—have profound
implications for the skill development agenda.
While digital technologies affect the whole skill formation
process by changing the role of teachers, how
students learn, and the mechanisms to strengthen
accountability in education and training (see sector
focus 2), priorities for skill development in the 21st
century hinge on three questions:
• What are the policies and interventions needed to
provide current and future workers with skills for
a digital economy?
• How do these priorities vary by each country’s
labor market challenges and skill base?
• How can digital technologies complement this
“analog” policy agenda?
Priorities for a skill development agenda in
the 21st century
Countries with strong skill development systems
are best prepared to leverage digital technologies, to
manage some of the labor market disruptions that
technology creates, and to ensure that the benefits
of digital technologies are widely shared. In emerging
digital countries, such as Nepal or Senegal, the
skill base remains weak, with gaps in foundational
cognitive and socioemotional skills, as well as in
basic digital literacy. Transitioning countries, including
Armenia, Sri Lanka, and Ukraine, have done
fairly well on foundational skills, but they face the
challenge of keeping up with some of the new skill
demands arising from digital technologies, especially
higher-order skills. Transforming countries, such as
the Czech Republic and the Republic of Korea, are
best positioned to think about more advanced technical
skills (both in ICT and in STEM), and, since many
of their citizens are also rapidly aging, also need to
prioritize lifelong learning (figure 5.8).
Every country has multiple skill development
systems. As international tests make clear, individuals
who perform best in less advanced economies
are often at par with peers in more advanced countries,
and there is a lot of inequality in outcomes
within countries. 15 So a simple sequencing of policy
reforms oversimplifies what is needed in any country.
Even transforming countries need to strengthen
foundational skills, and emerging countries need to
strengthen their provision of more advanced skills.
But skill development is a cumulative process: it is
hard to develop technical and high-order cognitive
skills without basic literacy or a strong foundation
of socioemotional skills. Similarly, foundational and
more complex cognitive and socioemotional skills