The Rising Demand for New Skills

By George Waggott, founder and Roberto Fonseca-Velazquez, law student

George Waggott Law

A recent article published by the International Monetary Fund (IMF) highlights the way that technological change is driving a demand for new skills across the global economy. Technological change has long reshaped labour markets, but the benefits of related change have not always been evenly distributed. Today’s rapid advancement in artificial intelligence (AI) and other digital technologies is transforming workplaces at an unprecedented pace. Despite these disruptions, technological progress is also creating new roles, tasks, and occupations, signaling that while certain jobs may disappear, new opportunities continue to emerge alongside automation and technology adoption.

A central theme of the current transformation is the growing premium on worker skills. Indeed, workers’ ability to secure or maintain employment now hinges increasingly on learning new skills or updating existing ones. According to a recent analysis by the IMF, which reviewed millions of job postings, one in 10 vacancies in advanced economies and one in 20 in emerging market economies now require at least one new skill. Demand for these new skills is especially high in professional, technical, and managerial fields, with IT jobs alone accounting for more than half of these emerging-skill requirements. Sector‑specific needs are rising as well: healthcare employers, for example, now seek or required telecare and digital health capabilities, while marketing roles increasingly demand current social‑media expertise and related credentials, training and certifications.

These rapid shifts contribute to rising anxiety among workers. Nearly 40 percent of jobs globally are reported to be exposed to AI‑driven change, heightening fears of displacement and inequitable opportunities. This reinforces the need for governments to implement forward‑looking policies that provide workers with the necessary skills to remain competitive in this era of transition. All of this is occurring while organizations are pressured to ensure that productivity gains from AI are broadly shared.

There are obvious financial upsides for workers who acquire emerging skills. In the U.S. and the U.K., job postings listing new skill requirements are reported to tend to offer wage premiums of around 3 per cent to comparable roles which do not have the new skill requirements. Further,  roles requiring four or more new skills often offer even higher pay—up to 15 per cent in the U.K. and 8.5 per cent in the U.S. Such wage gains benefit local economies, too: U.S. regions with greater adoption of new skills have seen employment rise as increased worker earnings have boosted local business activity.

However, these gains are uneven. High‑skill and low‑skill workers tend to benefit the most, while middle‑skill, such as routine office roles, facing a squeeze. AI‑specific skills present an additional complication: although they command wage premiums, regions with positions which have high demand for AI-related skills are reported to have experienced lower employment growth, with employment in AI‑vulnerable roles falling 3.6 per cent after five years. Early‑career workers are among those particularly affected, as entry‑level jobs tend to involve young workers doing automatable tasks.

To help guide policymaking, the IMF has developed a Skill Imbalance Index, comparing countries’ demand and supply of emerging skills. Nations such as Brazil, Mexico, and Sweden face high demand for emerging skills, but face the challenge of limited supply. This creates a need to strengthen STEM education and training pipelines. Countries like Australia, Ireland, and Poland, which have abundant talent but lower demand, face a different set of issues, and generally must focus on stimulating innovation and helping firms utilize available skilled labour. Meanwhile, emerging and low‑income economies will need a mix of both approaches.

The IMF recommends that policymakers in all countries should prioritize worker mobility, accessible retraining, flexible work arrangements, and competitive markets. Education systems must also adapt to an AI‑driven world by emphasizing cognitive, creative, and technical skills that complement rather than compete with AI. Part of this focus is making sure that human skills are more effective at interacting with and utilizing technology.

Ultimately, the impact of AI and other new technologies on economic and social wellbeing will depend on whether governments and firms invest now in skills, innovation, and worker support systems. Preparing effectively will ensure that the benefits of technological change are shared across all sectors of society.

For more information about George Waggott Law, please see: www.georgewaggott.com, or contact: george@georgewaggott.com