Facing the Digital Transformation: Are Digital Skills Enough?

Digitalisation presents great opportunities for economic growth and improvements in working conditions. At the same time, it brings challenges such as new skill requirements – with potentially important distributional implications in the absence of commensurate policy action. To facilitate the digital transition and reap its benefits, people will need a broad set of skills. The analysis in this paper suggests that both cognitive (numeracy, literacy and digital) and non-cognitive skills exhibit a strong and robust positive correlation with labour productivity. While cognitive skills remain very important, there are signs that non-cognitive skills are rapidly increasing in importance. In a world in which the task content of jobs is progressively de-routinised and changing faster than ever, adaptability, communication and collaboration skills, critical thinking, creativity, entrepreneurship, and readiness to learn become all the more important. The digital transformation calls for policies that foster strong foundation skills, promote life-long learning and strengthen the link between education, training and the world of work. Complementary structural policies that promote efficient resource allocation or that enhance investment in intangible assets can strengthen the link between skills and productivity. While education and training policies fall mostly under the responsibility of Member States, the EU can support human capital development by promoting cooperation and the exchange of best practices among Member States, and through targeted financial support.