In this opinion series, part of our FutureWork campaign, we are asking key figures from the IZA World of Labor community to speculate on the future of the global labor economic landscape. Our Associate Editor for Education and Human Capital, Colm Harmon, gives his responses.
1. What do you see as the most significant trends for the world of work in the next five years?
The continuing growth in the service sector and the consequential decline in the manufacturing sector will remain the major trends in developed countries over the next five to ten years. This will require adaptable workers, and that will stress the education sector in terms of what a graduate is defined as. Education will not be training graduates for one career, but many. My forecast is that we will see a greater emphasis on humanities and creative arts in educational programs; not in isolation, but as part of more conventional disciplinary training in business and engineering.
2. What is the biggest policy challenge facing decision makers in your field and in your region?
In my view, the biggest challenge remains the persistence of high rates of school drop-out against the evidence of continued high rates of education. The workforce dynamic over the next five years needs highly skilled, highly adaptable workers, but that means workers without those skills will become ever more marginalized.
3. Why is more evidence-based debate and policy making needed?
Without the evidence base, policy gets hijacked by political imperatives—policy-based evidence instead of evidence-based policy! But above all else, policy is complex: the rise in behavioral economics demonstrates how solving problems (such as low educational participation) may mean dealing with how individuals value their future over their present. That is a very complex issue for policymakers to address without clear evidence on what might deliver results. We didn’t think of these issues five or ten years ago—we now do.
4. What are the biggest barriers to policymakers adopting evidence-based decision making and how can they be overcome?
Without sounding patronizing, the biggest issue is understanding. Behind a simple message—early investment in children works—lies a series of highly technical, highly complex research questions and equally complex analysis. If the policy community do not see that, they get the message but not the intuition. That said, the academic community has to deliver the material. Our colleagues in science and medicine have long understood translational issues, but in social sciences and economics there is nowhere near that level of acceptance that it is our job to translate.
5. What are the biggest opportunities of wider adoption of evidence-based policy making?
For me the rate of return is simple: policymakers get the very best people in a field working for them explicitly or implicitly (because we want the data, and we also kinda like the sense of impact!), and academics get access to new problems and new “labs” to trial and test our theories. This alignment of interests is powerful: we get to produce better work; we get that work used in practice; and we in turn get to see what happens and how we can improve matters. That brings us close to having real impact that changes real lives. Despite what we think as academic economists, it does not happen all that often!
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We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.