Transition to Industry 4.0 and Addressing the Workforce Skills Gap

According to McKinsey, the new wave of automation and digitization brings its set of challenges, especially a great impact on the skills of the workforce. The new automation revolution will enormously affect employment and most organisations are not prepared to address the needs of their workforce to meet the needs of Industry 4.0. 

Hence, the TransIT project, co-funded by the Erasmus+ programme of the European Union, that the Knowledge, Innovation and Strategies Management Club is part of, is developing an innovative curricula, educational methods and training courses that guarantee an effective transition to Industry 4.0 standards. The project will provide a solution for company leaders, industry executives, HR professionals, SMEs and VET centers.

Partners in the project are: Trebag (Hungary), NUI Galway (Ireland), Chamber of Commerce and Industry of Slovenia - Institute for Business Education, Weople (Portugal), KISMC (Bulgaria), IDEC (Greece), ARTO (Hungary), Robot-X (Hungary).

The TransIT project will produce three main elements that together will form a complete training kit, whereas each element will offer strong capacity building and help to successful adjust to the forthcoming challenges of Industry 4.0 standards regarding the future of work.

The future of work will require two types of changes:

1. Upskilling
2. Reskilling

The analysis of McKinsey suggests that 39 to 58 percent of the worldwide work activities in operationally intensive sectors could be automated using currently demonstrated technologies.

Highlights from the McKinsey blog article "Building the vital skills for the future of work in operations"

• Operations-intensive sectors have 1.3 times the automation potential of other sectors.
• Automation will have a significant impact on skill requirements.
• Large-scale reskilling efforts must overcome significant barriers. 
• An end-to-end skill transformation follows a three-phase approach:
  1. Scout - analyse skill demand vs supply to deliver on strategic ambitions
  2. Shape - design programme architecture to close demand-supply gap
  3. Shift - stand up infrastructure and capabilities to reskill at scale
• Creating the right talent pool for a digital and analytics transformation combines in-house capability building and hiring for specific roles.

Overall, companies have a number of approaches to address the skills gap created by Industry 4.0:

• search for talent outside the organisation/ hire new staff with the right skills
• build skills internally
• retrain their existing workforce to prepare employees for the new role
• have a blended approach - have a skilled contract workforces to fill in short-term needs while developing the necessary skills internally. 

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