Latin America has a challenging starting point regarding its skills gap. According to the World Bank Enterprise Surveys, 31.6% of companies in the region struggle to find adequately qualified workers. That’s significantly higher than the 21.2% global average and, in fact, represents the highest figure among any region in the 139-country study.
The urgency to reskill workers for the era of intelligent machines is especially acute for Latin America, because so many jobs are at risk. Our own research estimates that 27% of Latin Americans who are employed in the formal economy are in jobs where most of their time is spent on routine tasks. More than 40% are in jobs with a moderate amount of routine work.
In short, a greater proportion of Latin America’s workforce needs to “reskill” for the new or modified jobs that will be created by intelligent technologies. Without decisive action, workers displaced by automation could wind up in informal work, further depressing wage rates at the low end of the income ladder, and threatening the precious progress Latin America has made in reducing informality and inequality. A vicious cycle of informality, low skills, and low productivity could nullify the growth potential that intelligent technologies offer the region. But this bleak scenario is avoidable.
Creating Latin America’s superhuman workforce
Every economy is struggling with this dilemma – and nobody has all the answers. Based on our research on intelligent technologies and employment, we believe that the most effective responses will be rooted in understanding two ways in which intelligent technologies change work: endowing workers with ”superhuman” powers and unleashing human capabilities that machines can’t match.
First, by working with intelligent machines and systems, employees can gain unprecedented physical and mental powers: caregivers can lift heavy patients using smart exoskeletons, and executives can extract insights from hidden patterns in massive datasets.
The benefits are clear, but processes, behaviours and cultures must adapt. Many employees will need training to incorporate AI and robots into their daily routines. A smaller group will find work managing the technology. Intelligent machines need to be trained, maintained, and guided. It still takes a human to keep a computer from taking a logical leap that contravenes social or legal norms and rules. Such capabilities will increase in importance.
Secondly, when machines take on routine tasks, companies can unleash human talent. Future job descriptions will emphasise skills that truly set humans apart. These include creativity, empathy, flexibility, and judgement amid uncertainty – the ability to think on your feet. These social and behavioural skills are already prized by employers because they are critical to innovation. With machines doing the heavy technical and physical lifting to keep the lights on, agile, collaborative, multi-disciplinary teams of humans will push the business forward with imagination and entrepreneurial spirit.
Challenges and opportunities
Based on the makeup of the Latin American workforce – the region has half as many high-skilled workers as Europe and the United States, and 50% more low and middle-skill workers – the “upskilling” challenge seems daunting. But the advent of intelligent systems could also be an opportunity to narrow the gap with advanced economies. Indeed, the nature of the skills needed in the era of intelligent machines may actually favour Latin America.
How? If we think back to the emergence of the internet and the “knowledge economy”, we see that it triggered a surge in demand for technical skills and workers trained in science, technology, engineering and mathematics (STEM) disciplines. Asia, as a region, seized the opportunity to gear education and training toward those needs. Latin America fared less well.
This time, specific technical skills – which are ephemeral and need continual refreshing – are vulnerable to automation. In contrast, behavioural, cognitive and social skills take on new importance. One could argue that creativity, collaboration, resilience and risk-taking are all skills that Latin American cultures have cherished and nurtured; they have been essential to build agility in the face of volatile conditions. Plus, these “softer” skills are not restricted to the rich or the well-educated and well-connected, opening opportunities for a larger section of society.
Another potential advantage: in Latin America, consumers and workers have shown a world-leading appetite to engage with new digital tools. According to Statista, Brazil, Mexico and Argentina represent three of the world’s top four heaviest users of social media, measured by average hours per day.
With investments in retraining, these cultural traits and tendencies can be turned into the skills that employers will seek and prioritise for the future workforce. This could be a chance for Latin America to leapfrog in learning and skill development.
Business needs to step up
In a phrase, business needs to put its money where its mouth is. For many years, corporations in Latin America and across the world have talked about a growing skills gap. Even during periods of high unemployment, employers say they have trouble finding qualified applicants. In a recent survey, for example, more than 60% of C-suite executives in Brazil told us that a growing skills gap is their top workplace issue.
Yet companies have cut back on training. In a recent global survey by Accenture, when asked how they would adjust training budgets to meet the skill requirements of the intelligent enterprise, 40% of companies said they had no plans to increase spending, 57% planned small increases, and only 3% planned significant increases. In Brazil, the only Latin American country in the survey, only 1% said they would raise budgets significantly.
Of course, simply throwing money at the problem is not the solution. Workers also need time to train, for example. In a global survey, employees told us that the biggest obstacle to participating in training is getting time during the work day.
The good news is that employees are eager to get the training they need to remain employed as companies automate more tasks and processes. Accenture found that 67% of workers around the world (and 61% in Brazil) believe that learning to work with intelligent machines will be important or very important to them in the next three to five years.
Business needs to bring training out of the assembly-line era to meet the skills challenge. “Experiential” learning – learning by doing and observing – is more effective than lectures in teaching the required cognitive and social skills. Jorge Zárate, global operations director at Grupo Bimbo, the Mexican baking giant, says: “Where traditional classes aren’t effective, as often happens, we try to use learning approaches that focus on human interaction.”
Companies should look for hands-on learning opportunities and enlist experienced workers to help younger colleagues. When teaching technical skills – like how to work with an AI system – it pays to use “micro-modules” that are more convenient and can help employees absorb more.
Finally, companies should harness new technologies for teaching. From Airbus to Walmart, companies are using virtual reality and augmented reality to train workers. Headsets put employers in the scene – an aircraft fuselage, for example – and display relevant data, like how a particular component is properly installed. At Walmart, new associates prepare for the Black Friday shopping frenzy with a VR course. Companies are also using AI technology in computer-based training. The system follows the student’s progress and, based on proficiency tests, suggests customised drills to reinforce specific skills.
Rethinking skill strategies
Government support will play a critical role in helping workers transition to the “intelligent enterprise”. Government skills training – whether delivered through the educational system or in workforce development and retraining programmes – also needs to be updated for the age of intelligent machines.
Minimizing risk will improve the odds of success. By identifying sectors and regions that are most vulnerable to disruption, governments can target the most at-risk workers for retraining. In Latin America this includes workers in manufacturing, transport, and communications.
Every nation needs to craft skill-building strategies that are relevant to their economic realities and trends. This means understanding which industries (and related occupations and skills) will be growth leaders. It also means understanding the country’s plans to invest in technology infrastructure and capabilities. These factors will affect how quickly intelligent technologies take hold. Going fast demands a laser-focus on rapid reskilling. Going too slow means falling behind other countries in growth and competitiveness. The time to plan is now.
Latin America’s businesses and governments have a responsibility to turn this new skills imperative into an opportunity by making the investments in time, money, and energy to build on the region’s potential advantages. The employees are ready.