Skills and Workforce Development

Skills development is increasingly central to education and labor market transformations driven by global megatrends such as automation, climate action, digitalization, and demographic shifts. These forces are reshaping the nature of work, requiring education and workforce systems to become more personalized, accessible, and continuous, with an emphasis on remote and hybrid learning and lifelong upskilling. Workers in low- and middle-income countries (LMICs) must adapt, as freelancing and informal or self-employment become more prevalent.

To thrive in the 21st-century labor market, individuals need a comprehensive skillset:

Foundational and higher-order cognitive skills (literacy, numeracy, problem-solving)

Socio-emotional skills (teamwork, leadership, grit)

Specialized technical and entrepreneurial skills

Cross-cutting Digital skills

These are critical for the green and digital transitions, boosting employability, productivity, and economic competitiveness.

Yet,large skills gaps persist, hindering jobs-rich economic growth, especially in LMICs.

Globally, 750 million aged 15+ lack basic literacy, with estimates being nearly twice as large if literacy is measured through direct assessments. Skills mismatches and disparities in returns to education are widespread.

Automation and other megatrends will transform over 1.1 billion jobs in the next decade.

About 450 million youth (7 out of 10) are currently economically disengaged.

Over 2.1 billion adults need remedial education.

Firms cite workforce skills as a significant constraint, particularly in Africa and Latin America, while most African and South Asian countries lack workforce skills data.

Closing these global skills gaps could boost the world economy by $6.5 trillion over seven years, yet most countries invest less than 0.5% of GDP in adult lifelong learning.

The COVID-19 pandemic underscored the urgency of reform, with 220 million post-secondary students losing educational opportunities. Key issues to address include:

Access and completion

Adaptability to changing job demands

Quality assurance in education and training, and

Relevance to labor market needs—particularly through employer engagement.

Efficiency can be constrained by challenges related to governance, financing, and quality assurance.

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The World Bank (WB) collaborates with countries and multilateral partners to ensure individuals can access quality education and training, while also supporting employers in finding the skills they need. It provides financial and analytical assistance to governments in areas ranging from system and institutional development to targeted training programs. The WB also engages in policy research and analysis to improve the effectiveness and measurement of skills interventions.

Currently, the World Bank is developing several global public goods to advance skills development:

ActiVaR: With support from the Government of Korea, and grant from the Korea World Bank Partnership Facility, the WB launched the ActiVaR program in Ecuador which leverages XR (extended reality) technologies for workforce training. It trains young Caribbean fishermen in sustainable, technology-driven blue economy practices. It also promotes virtual campuses for engaging hybrid learning, with potential to scale-up globally.

Digital Skills for Africa (DS4A): This initiative provides tools to assess both the demand and supply of digital skills, focusing on sectors such as AgroTech, education, and healthcare. It includes assessments of digital, literacy, numeracy, and socio-emotional skills. The team developed tools to evaluate digital skills demand across wage employment, small firms, informal and agricultural workers.

ETRI-VET: An adaptation of the EdTech Readiness Index, ETRI-VET assesses the preparedness of TVET and higher education institutions to deliver and support digital and hybrid learning for youth skills development in a time of digital transformation.

TEACH-VET: These class observation and pedagogical tools help formal TVET institutions collect data on teaching and training practices, aiming to improve quality systems.

To address skills development challenges and prioritize solutions, the WB also developed:

STEP (Skills Toward Employment and Productivity): A conceptual framework using surveys to collect data on cognitive, socio-emotional, and job-relevant skills, guiding policymakers in designing productivity-enhancing programs.

SABER Workforce Development (WfD): This tool benchmarks national policies and institutions affecting skill supply and demand, focusing on strategy, oversight, and service delivery.

Training Assessment Project (TAP): Building on SABER-WfD, TAP assesses training systems’ readiness to prepare workers for meaningful employment.

These initiatives help countries better understand challenges and advance effective development skills strategies.

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Recognizing the importance of skills in the global economy, the World Bank Group supports skills development through financing, policy advice, and partnerships. As the largest external financier, the Bank manages nearly $7 billion in active tertiary education and skills projects across 50+ developing countries.

Notable initiatives include the ActiVaR Program, launched with a grant from the Korea World Bank Partnership Facility. ActiVaR uses XR technologies for workforce training, helping six Latin American universities develop virtual labs and immersive training programs in auto-mechanics and industrial risk prevention. It is also pilots XR training for Caribbean fishermen and virtual campuses for hybrid learning. Evaluations show these approaches enhance student engagement and reduce training risks. Learn more in this short guide.

In digital skills, the WB’s Digital Economy for Africa (DE4A) Initiative developed resources to support Africa’s digital transformation prepared by the African Union (AU), including guidebooks for Digital Skills Country Action Plans and studies like “Digital Skills in Sub-Saharan Africa: Spotlight on Ghana.” From 2016-2020, the WB committed around $2 billion to this agenda.

Country-level impacts illustrate the breadth of the WB’s work.

Dominican Republic: A Youth Training and Employment Program benefited over 38,000 at-risk youth, increasing formal employment and incomes, especially for women, in an impact evaluation of the program.

Kenya: The Youth Employment and Opportunities Project supports 280,000 young people with in-demand skills, internships, and self-employment support.

Afghanistan: Alternative Learning Plan for TVET, supported under the Second Afghanistan Skills Development Project during COVID-19, ensured 60,000 students could access education through multiple modalities.

Bangladesh: The $190 million Skills and Training Enhancement Project improved training quality for over 700,000 trainees, doubling completion rates and boosting female enrollment.

Liberia: Youth Opportunities Project provided 10,000 rural youth with entrepreneurship, life skills, and agricultural training.

East Africa: A $293 million Skills for Transformation and Regional Integration Project (EASTRIP) project aims to benefit 60,000 students in Kenya, Tanzania, and Ethiopia, with a focus on regional integration and women’s vocational education and training enrollment.

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• International Association for the Evaluation of Educational Achievement
• International Labour Organization
• Mastercard Foundation
• Organisation for Economic Co-operation and Development
• Programme for the International Assessment of Adult Competencies (PIAAC)
• Solutions for Youth Employment
• STEP Skills Measurement Program
• The Tertiary Education and Skills (TES) Multi-Donor Trust Fund
• UNESCO Institute of Statistics
• UNESCO Institute for Lifelong Learning (UIL)
• UNICEF
• WorldSkills