A growing policy concern across both developed and developing economies is whether today’s education and training systems are adequately preparing young people for the rapidly changing world of work. Automation, artificial intelligence (AI), digital platforms and the green transition are reshaping labour demand at a pace that traditional institutions struggle to match. Policy-makers increasingly worry that without decisive action, large cohorts of young people, particularly in the Global South, will enter the labour market ill-equipped for productive and decent employment.

This concern is not new, but it has gained urgency. The World Bank estimates that nearly two-thirds of children in low- and middle-income countries risk failing to achieve minimum proficiency in reading and numeracy (World Bank, 2018). At the same time, employers consistently report difficulties in finding workers with the right mix of technical, digital and socio-emotional skills. This co-existence of youth unemployment, informality and skills shortages points to a structural failure rather than a cyclical one.

Some studies of the future of work focus on the risk of job displacement due to automation (Frey and Osborne, 2017). Other research has shifted attention toward task reallocation and skill transformation rather than outright job loss (Autor et al, 2003; Acemoglu et al, 2022).

The evidence indicates that jobs are not disappearing wholesale: rather, they are changing. Studies by the World Bank and the International Labour Organization consistently show that technological change is transforming the task content of jobs rather than eliminating entire occupations. Routine tasks, both cognitive and manual, are declining, while demand is rising for analytical skills, digital literacy, problem-solving, adaptability and interpersonal competences.

For young people, this shift creates both risks and opportunities. Those with access to quality education, digital infrastructure and lifelong learning pathways may benefit from new occupations and higher productivity. Others risk being locked into low-skill, low-productivity activities, often in the informal sector. The distributional consequences of this divide are particularly stark in developing countries, where education systems are already under strain and labour markets are segmented.

Evidence suggests that years of schooling alone are no longer a sufficient metric of preparedness. What matters increasingly is what students learn and how they learn. One study shows that cognitive skills, rather than schooling attainment per se, are strongly associated with economic growth (Hanushek and Woessmann, 2008). Similarly, OECD research highlights that socio-emotional skills, such as teamwork, resilience and communication, play a critical role in employability and earnings, especially in dynamic labour markets (OECD, 2019).

In recent years, digital skills have rapidly shifted from specialised to a basic requirement across all sectors. Beyond ICT-related occupations, agriculture, manufacturing and services are being transformed through digital platforms, data analytics and automation. Yet access to digital skills remains highly unequal. Gender gaps, rural-urban disparities, and discrepancies across income groups risk reproducing existing inequalities in new forms (UNESCO, 2023).

This transition is characterised by job polarisation. High skill technology intensive roles are expanding, while routine and mid-skill jobs face stagnation. As a result, traditional entry points into the labour market are narrowing for young people who lack digital competences. The risks are uneven: young people without advanced education or digital access face shrinking pathways into stable employment, while a smaller segment benefits disproportionately.

At the same time, the future of work also presents new opportunities. Geographical decoupling of work through remote work, digital platforms and global online labour markets creates new possibilities for youth in the Global South, allowing them to access international markets without physical migration. But these opportunities are conditional. They favour young people with reliable connectivity, language proficiency and digital fluency, raising concerns about types of inequality both within and across countries.

Against this backdrop, during the Egypt Development Dialogue held with the youth of the Faculty of Economics and Political Science at Cairo University, it was argued that enabling youth to compete in the workforce of the future requires a shift from fragmented interventions toward a systemic approach built on three pillars: transforming education systems; strengthening school-to-work transitions; and aligning skills policies with broader development strategies.

First, education systems must move beyond rigid curricula and rote learning toward competency-based models that emphasise critical thinking, digital literacy and adaptability. This does not imply abandoning foundational skills: on the contrary, strong literacy and numeracy are prerequisites for effective up-skilling. But curricula must be regularly updated, and teachers must be supported to adopt new pedagogical approaches.

Second, smoother school-to-work transitions are essential. Apprenticeships, internships and work-based learning can help young people to acquire practical skills while reducing information asymmetries between employers and job-seekers. Countries with strong vocational education and training (VET) systems, when well-designed and closely linked to employers, tend to exhibit lower youth unemployment and better job matching. But VET should not be seen as a second-best option: its effectiveness depends on quality, relevance and permeability with higher education pathways.

Third, skills policies must be embedded within a broader vision of structural transformation. Preparing youth for the future of work is inseparable from decisions about industrial policy, green transitions and digital development. Without sufficient labour demand in productive sectors, even well-trained youth will struggle to find decent jobs.

This is particularly relevant in countries pursuing ambitious climate and digital agendas, where new occupations will emerge alongside the decline of carbon-intensive and routine activities. In these circumstances, governance becomes central. Ethical, regulatory and governance frameworks for AI are not peripheral: they are central to protecting youth from algorithmic bias, surveillance and unequal access to opportunity.

Algorithms increasingly shape hiring, performance evaluation and access to work, yet young workers often have limited recourse when these systems disadvantage them. Public policy must therefore address not only the challenge of employability but also job quality, social protection and voice for young workers in digital and platform-based labour markets.

Research on labour markets and human capital in Egypt reinforces this point: skills mismatches are often symptoms of deeper coordination failures between education systems, labour markets and development strategies. Addressing them requires governance arrangements that bring together ministries of education, labour, planning and industry, as well as the private sector and civil society (Assaad et al, 2018; Assaad and Krafft, 2021; Krafft and Assaad, 2016).

In conclusion, enabling youth to compete in the workforce of the future is not primarily a question of predicting which jobs will exist tomorrow. It is about equipping young people with transferable skills, creating institutions that support lifelong learning, and ensuring that economic transformations generate inclusive employment opportunities.

The cost of inaction is high, not only in terms of wasted human potential, but also in social cohesion and long-term development prospects. The policy challenge is formidable, but the evidence is clear: investing wisely in youth skills today is one of the most powerful levers for shaping a more resilient and inclusive future of work.

Further reading

Acemoglu, D, D Autor, J Hazell and P Restrepo (2022) ‘Artificial intelligence and jobs: Evidence from online vacancies’, Journal of Labor Economics 40(S1), S293-340.

Assaad, R, and C Krafft (2021) ‘Excluded generation: The growing challenges of labor market insertion for Egyptian youth’, Journal of Youth Studies 24(2): 186-212.

Assaad, R, C Krafft, J Roemer and D Salehi-Isfahani (2018) ‘Inequality of opportunity in wages and consumption in Egypt’, Review of Income and Wealth 64: S26-54.

Autor, D, F Levy and R Murnane (2003) ‘The skill content of recent technological change’, Quarterly Journal of Economics 118(4): 1279-1333.

Frey, CB, and M Osborne (2017) ‘The future of employment: How susceptible are jobs to computerisation?’, Technological Forecasting and Social Change 114: 254-80.

Hanushek, EA (2011) ‘The economic value of higher teacher quality’, Economics of Education Review 30(3): 466-79.

Hanushek, EA, and L Woessmann (2008) ‘The role of cognitive skills in economic development’, Journal of Economic Literature 46(3): 607-68.

Krafft, C, and R Assaad (2016) ‘Inequality of opportunity in the labor market for higher education graduates in Egypt and Jordan’, in Diwan, I, and A Galal (eds) The Middle East Economies in Times of Transition, Palgrave Macmillan.

OECD (2019) OECD Skills Outlook 2019: Thriving in a Digital World, OECD Publishing.

UNESCO (2023) Global education monitoring report: Technology in education.

World Bank (2018) World Development Report 2018: Learning to Realize Education’s Promise.