New ways to teach highly demanded skills more effectively

Learnings on this Thesis

• Employers cannot find enough talent to perform certain skills due to changing demands from employers and economic changes.

• There are two mainly two skill gaps: digital skills and the manual high-skill gap.

• 1/2 Digital Skills Gap (~1M jobs) – supply of talent with technical skills (engineering, data, IT, tech) is limited due to fast technological change. Many of these are suitable for vocational training:

  • Software developers
  • Cloud computing operators
  • Data analysis
  • Digital marketing
  • Tech sales
  • IT operators

  The digital skills gap is widening fast. Here's how to bridge it

  • In 2020, UK tech employment grew by 40% over the last 2 years, representing 9% of the national workforce with 2.93m jobs created (Edge Foundation)

• Bootcamps: bootcamps have become the main model to rapidly train technical talent to bridge this skills gap. There are a few innovations to their model when compared to traditional higher education or traditional vocational pathways

  • Finacing through outcome-based methods (like Income-Sharing Agreements)
  • Short-term programs with no academic certification
  • Strong self-paced and peer learning components

• "Last-Mile Training" to train graduates in high-demand skills and tools is on the rise

"Employers are seeking skills like Pardot (marketing), Marketo (digital marketing), Google Adwords (digital marketing), ZenDesk Plus (customer service), NetSuite (finance), Financial Force (finance), Workday (HR), and the CRM platform Salesforce – the most popular SaaS platform in American businesses.

According to Burning Glass, jobs demanding Salesforce experience have quadrupled in the past five years; in 2017, more than 300,000 open positions called for Salesforce skills" Ryan Craig, 2019

• 2/2 Middle-skill gap (~5M jobs) – supply of talent for key vocations is limited due to demographic, cultural and economic changes. A fraction of these are suitable for vocational training (BLS, 2019)

• Advanced manufacturing
• Nursing assistants
• Highly-skilled manual laborer (wielders, painters, plumbers)
• Personal care aides
• Restaurant cooks
• Education & training is the lever that can be altered to bridge the skills gap most effectively
• Increasing demand for vocational training: led by new job opportunities and students that will move away from college education (as 40% of graduates are underemployed and student loans balloon to $1.6T), the demand for this training is poised to grow massively in the next 10 years. Almost half (48%) of new job openings in the next years will require middle-skill training

• Not enough training opportunities: current vocational training funnels are not supplying enough talent to employers, and are not covering many of the skills that employers need. This training is mostly done through Community Colleges (associate degrees, diplomas, certificates), career colleges (national certificates provided by for-profit colleges), trade schools (public schools) and Job Corps (free training for vocations).

  

• Outcome-based financing are solving a current incentive misalignment issue by providing training that is aligned with the desired results for students

  • ISAs (the more common outcome-based financing method) work in a context of high demand for talent that is not matched by supply of candidates from training pipelines: they serve fundamentally as a mechanism to better align the economic incentives of those providing the training and those of the students, a promise long awaited by many in education.
    • An Assessment Framework for ISAs
  • Thus, education/training providers can be held accountable to the student outcomes and will be incentivized to improve these to maximize their gains, as opposed to maximizing for enrollment and student spending.
  • We think of new schools preparing students for technical positions in a bootcamp-like structure as “new vocational training” - they combine some of the elements of vocational schools with others of universities: however, the main focus is on employability. We believe these will continue to grow in size, forms and applications.

• COVID has increased interest in self-driven learning and shorter-term industry certificates

  • "The pandemic lockdown has resulted in an increase in self-directed learning, with one in three (35%) having taken action and boosted their digital skills..." (Edge Foundation)

• A recent RCT into workforce training program YearUp showed 30-40% income gains five years after the bootcamp, which create a similar treatment effect to the student than a college degree.