Which Business Skills are Most Valuable in 2019?
We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.
World Economic Forum, “The Future of Jobs”
Around the world, surprising changes in the skills workers will need for success suddenly loom on the horizon. And those contemplating enrolling in MBA degree programs would be wise to consider some of the ways these changes in critical skills will affect their futures.
Why? As we discuss in this report, certain skills that traditionally have not been taught by business schools are expected to skyrocket in value moving forward. Managers without these skills will need to rapidly develop them for reasons we present below—even if their business schools don’t now emphasize such skills in their curricula.
To begin, let’s examine a survey that has brought the significance of the changes in required skills to the attention of policymakers worldwide.
World Economic Forum Report: “The Future of Jobs”
The 2016 report, “The Future of Jobs,” presents the results of a comprehensive survey focusing on the skills needed by the global workforce before 2020. The author, the Geneva-based World Economic Forum (WEF), is the nonprofit best known for sponsoring their famous conference each January in Davos, Switzerland. This meeting assembles about 2,500 heads of state, business leaders, and economists for discussions of pressing global issues.
No statistician could ever accuse the WEF of drawing the alarming conclusions in this report from a sample size that’s too small. This report surveyed chief human resources officers (CHROs) along with senior strategy and talent executives from the 100 largest global employers in each of WEF’s nine target industry sectors spanning 15 economic regions. Respondents represent 371 individual companies who employ 13 million employees. Furthermore, one quarter of the surveyed firms employs more than 50,000 workers globally; another 40 percent employs between 5,000 to 50,000 employees.
The Fourth Industrial Revolution
The WEF report argues that the global economy has already experienced not merely a single industrial revolution, but three separate ones in rapid succession. It argues that the global economy will soon experience the leading edge of what WEF calls the Fourth Industrial Revolution, which was the theme of the 2017 Davos Annual Meeting that garnered widespread media coverage. The Forum defines the revolution in this way:
We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. . .The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
What are those technologies? “Developments in genetics, artificial intelligence, robotics, nanotechnology, 3D printing and biotechnology, to name just a few, are all building on and amplifying one another,” says the report.
And concurrent with this revolution in technology are broader socioeconomic, geopolitical, and demographic drivers of change, which are all intensifying. While entire industries adjust, a fundamental transformation now affects most occupations. The report claims that “while some jobs are threatened by redundancy and others grow rapidly, existing jobs are also going through a change in the skill sets required to do them.”
Ten Skills Workers Need to Thrive in the Fourth Industrial Revolution
The skills ranked by this survey pose a striking contrast with the skills ranked by a previous poll in 2015. In the table below, the right column presents the skills that the WEF report predicts will demonstrate the greatest gains in value by 2020:
|Demand Rank||Skills: 2015||Skills: 2020|
|1.||Complex Problem Solving||Complex Problem Solving|
|2.||Coordinating with Others||Critical Thinking|
|4.||Critical Thinking||People Management|
|5.||Negotiation||Coordinating with Others|
|6.||Quality Control||Emotional Intelligence|
|7.||Service Orientation||Judgment and Decision Making|
|8.||Judgement and Decision Making||Service Orientation|
At first, these two lists might not seem remarkable. Complex problem solving remains the most highly valued ability, and skills like coordinating with others, people management, and critical thinking retained their significance over the five-year interval.
But closer analysis reveals big surprises. For example, creativity appears dead last on the 2015 chart, but in 2020, it ranked third.
Now, why would creativity suddenly impress the chief human resource executives who made up most of the study’s respondents? “With the avalanche of new products, new technologies and new ways of working, workers are going to have to become more creative in order to benefit from these changes,” according to the WEF’s Alex Gray.
However, BSchool’s editors believe a more compelling rationale has actually driven the WEF’s creativity ranking beyond the ostensible one Gray presents. Is innovation possible without creativity?
Think about it: Innovation requires creativity. The most innovative firms such as Apple became wildly successful because leaders like Steve Jobs and Steve Wozniak valued creativity. Apple’s founders created a top-down culture that demanded creativity among functions related to product development, customer relations, sales, and marketing.
Indeed, the Fourth Industrial Revolution is a testament to the importance o0f creativity, without which the innovations driving this trend would never have been developed. For better or worse, in 2019, the success of many firms and even some economies are fueled by creativity leading to innovation. Although business schools are not known specifically for producing “creative business leaders,” business school faculties might assign a higher priority to developing creativity in their schools’ curricula, paying thought to this central connection with innovation.
Furthermore, another new skill absent from the 2015 chart debuts highly on the 2020 list. That skill is emotional intelligence, ranked in sixth place. “Overall, social skills—such as persuasion, emotional intelligence and teaching others—will be in higher demand across industries than narrow technical skills, such as programming or equipment operation and control,” says the report.
Besides emotional intelligence, notice how in the 2020 chart that people management, coordinating with others, a service orientation, and negotiation all provide examples of social resource management skills in high demand. In other words, half of the 2020 list—five of the ten skills—essentially amount to social resource management skills.
Moreover, cognitive flexibility, which enters the list for the first time in the tenth position, appears grouped along with creativity in the report within the general category of “cognitive abilities.” “Cognitive abilities (such as creativity and mathematical reasoning). . .will be a growing part of the core skills requirements for many industries,” notes the report.
Essentially, seventy percent of the list amounts to a combination of cognitive abilities with social resource management. Although the report falls flat at explaining this term, this is actually what the authors mean when they talk about cross-functional skills. These are social and analytical skill combinations that amount to the most desirable skill blends.
It’s also interesting to observe which skills have dropped in position since 2015. Gray notes that negotiation may still be high on the earlier list, but in in 2020 it begins to drop from the top ten. Why? Because computers, using massive volumes of data, will begin to make our decisions for us: “A survey done by the World Economic Forum’s Global Agenda Council on the Future of Software and Society shows people expect artificial intelligence machines to be part of a company’s board of directors by 2026,” notes Gray.
Viewed another way, only two skills which the WEF’s respondents consider critical for the 2020 labor force—complex problem solving, along with judgment and decision making—make up the predominant skills taught at many business schools with traditional, non-entrepreneurial, quantitative-focused programs.
Many candidates with backgrounds related to STEM (science, technology, engineering or mathematics) disciplines tend to favor such MBA programs. But in the context of this report’s analysis, with the Fourth Industrial Revolution looming, are those the kinds of programs that would serve those students well after graduation?
Why Should MBA Students Care About the WEF’s Findings?
That question brings us to an analysis of why MBA students should care about the survey’s results, which involves three reasons.
Upskilling for the Global Economy
First, the employees MBA graduates will soon supervise will require these new skills in order to effectively perform their jobs. The workforce will require leadership from MBAs who are themselves adept at skills like creativity and emotional intelligence, who value these capabilities in their employees, and who value the training and development required to rapidly “upskill” their workers who need to develop such abilities.
According to the Forum, the global economy urgently needs a tremendous amount of such upskilling. Consider this alarming and arguably shocking quote from the report: “On average, by 2020, more than a third of the desired core skill sets of most occupations will comprise skills that are not yet considered crucial to the job today, according to our respondents.”
In other words, those skills are now in the process of replacement or downgrading by skills that managers did not even consider critical even a few years ago.
Consider yet another remarkable quote:
As business leaders begin to consider proactive adaptation to a new talent landscape, they need to manage skills disruption as an urgent concern. They must understand that talent is no longer a long-term issue that can be solved with tried and tested approaches that were successful in the past or by instantly replacing existing workers.
The WEF’s report uses the term “urgent” repeatedly, and “The Future of Jobs” may be one of the few trend reports of its kind ever to do so. Do business leaders—including business school faculty and future business leaders like MBA students—realize that they will suddenly, in a matter of months, find themselves managing a workforce with urgent skill development and retraining needs but little or no time to adapt? And do these leaders realize that fire-and-replace strategies won’t be options because of protracted shortages among qualified candidates with skills like creativity and emotional intelligence on top of job-related capabilities and experience?
In the previous economic revolutions the WEF chronicles, decades were available to cope with drastic technological change. Yet this time around, the world’s economies do not have the luxury of the ultimate resource by which economies in previous decades adapted: time.
In Gray’s words, “The pace of change will be fast. Change won’t wait for us: business leaders, educators and governments all need to be proactive in upskilling and retraining people so everyone can benefit from the Fourth Industrial Revolution.”
Major Skill Shifts in Finance & Investment Banking
Here’s the second reason why MBA students should care. A key industry that traditionally has hired more MBAs than any other (besides management consulting) has not yet even begun to adapt to the coming shifts. Such lack of adaptation makes that industry—investment banking and financial services—a sitting duck for rapid, drastic and massive labor disruptions because of sudden changes in the skills required by that sector’s workforce.
Indeed, a broad consensus of the poll’s respondents—43 percent—expects that the largest amount of skills disruption will take place in the financial services and investment industry. The report suggests this effect may result in part because the administrative support and routine white-collar office functions upon which this industry has relied for decades now face the threat of decimation.
This result stands in stark contrast with industries like entertainment and media, which had previously weathered the skills disruption storm brought on by the global transition to the internet as a content delivery vehicle. MBA candidates and students would be wise to make their career decisions while fully aware that those who choose investment banking or finance will be entering a destabilizing sector potentially at risk from volatile skills disruptions.
Supporting Future Economic Growth
Third, MBA students and graduates need to care because, as responsible future business leaders, they have a role to play in supporting economic growth beyond the success of their own firm. The report argues that business leaders must without delay take steps that the WEF recommends to prevent an urgent situation from turning into the first “future shock” global economic crisis triggered by the workforce’s inability to quickly adapt their skills to rapid technological change. The report argues that the stakes are high from not taking these steps:
To prevent a worst-case scenario—technological change accompanied by talent shortages, mass unemployment and growing inequality—reskilling and upskilling of today’s workers will be critical. . . Without urgent and targeted action today to manage the near-term transition and build a workforce with future-proof skills, governments will have to cope with ever-growing unemployment and inequality, and businesses with a shrinking consumer base.
Steps Business Leaders Like MBAs Should Take
To prevent a global economic catastrophe comparable to or more severe than the 2009 Great Recession, the report argues that business leaders should take the following steps:
Overhaul the Human Resources Function
Manage skills disruption as an urgent concern, recognize that proactive and innovative skill-building and talent management is an urgent issue, and commit resources to align business, innovation, and talent management strategies to maximize available opportunities to capitalize on transformational trends—including the aggressive assimilation of women and older workers (see below).
Leverage “Big Data” Human Resources Analytics
Astonishingly, only 53 percent of the surveyed CHROs feel reasonably or highly confident with respect to the sufficiency of their organization’s future workforce strategy to plan for the coming shifts. In other words, only half of the respondents feel confident their firms have an adequate workforce planning strategy ready! That statistic implies most companies aren’t even close to accurately assessing changes in their firm’s supply and demand of skills, nor are they developing the talent repurposing strategies they’re going to need by 2020.
Adopt a Zero-Tolerance Policy Towards Barriers to Workforce Diversity
The WEF report summarizes this issue perfectly: “As study after study demonstrates the business benefits of workforce diversity and companies expect finding talent for many key specialist roles to become much more difficult by 2020, it is time for a fundamental change in how talent diversity issues—whether in the realm of gender, age, ethnicity or sexual orientation—are perceived, and well-known barriers tackled.”
Capitalize on Working Arrangement Flexibility
Because work is what people do but not where they do it, online talent platforms have driven the trend towards the gig economy during a time of increased blurring of organizational and physical boundaries. “Organizations are going to have to become significantly more agile in the way they think about managing people’s work and about the workforce as a whole,” says the report.
Provide Immediate Financial Incentives to Drive Ongoing Education
How in the world can anyone prepare for a future as uncertain as the Fourth Industrial Revolution while paying tens of thousands of dollars for an education?
Days ago a new report revealed that student loan debt has doubled since 2009. At a time when aging economies require wholesale and ongoing reskilling of their existing labor forces, workers need much more effective approaches to training that will keep pace with rapidly-changing skill demands in affordable ways.
For example, “Denmark allocates funding for two weeks’ certified skills training per year for adults, and the strong emphasis the country places on in-work training helps explain its very high degree of employment mobility, with 70 percent of workers considering mid-career transitions a ‘good thing,’ compared to 30 percent or less in most other European countries.”
Reimagine Education Systems
Finally, while 65 percent of children entering kindergarten today will eventually work in new job types and functions that do not currently exist, trends are driving job creation encompassing many new cross-functional roles requiring social and analytical as well as technical skills.
Criticizing the current organization of educational systems, the report asserts, “Most existing education systems at all levels provide highly siloed training and continue a number of 20th century practices that are hindering progress on today’s talent and labour market issues.” Online education, which is more adaptable, agile, and customizable than traditional brick-and-mortar formats, may be part of the solution.