G20: Toward an innovation-based economy 2020

Robust accumulation of human capital while increasing skill deficit in computer programming

Human capital, either measured by the expected lifetime income of individuals or simple indicators such as education attainment or enrolment, accumulated rapidly, in particular in the past two or so decades. As the share of the working-age population falls, wages rise and the relative prices of capital and labour change, leading to substitution from labour to capital. More capital-intensive production, in turn, demands higher skills. According to OECD research using the MyCOS survey data of 800 000 tertiary graduates, the skills with the most acute shortage include computer programming and soft skills (Figure 2). Making up for the programming skills deficit is a prerequisite of widespread development of Internet-based industries and the whole Internet Plus initiative.

Figure 2. Programming skills are falling short

Percentage of graduates in the top ten skill categories with the greatest gap, 2013

University and vocational college graduates who had a job six months after graduation were asked whether the five skill categories out of 35 that are related to their job are necessary to perform their job (scale 1-7) and whether they had acquired the given skill by the time of graduation (scale 1-7). The difference between the weighted averages of the extent of necessity and the extent of acquired skills at school captures this skill gap. The ranking is based on the results for university graduates. Vocational college graduate skill shortages in the same skill categories are shown for comparison.[Photo/Source from OECD research based on MyCOS survey data.]