Business models need to radically adjust, innovate: ILO-IOE study

GENEVA, March 27 (Xinhua) -- A new study released Wednesday jointly by the International Labor Organization (ILO) and the International Organization of Employers (IOE) finds that global businesses need innovation and flexibility to face major changes as job providers.

The skills gap is a significant issue, with 78 percent of corporate executives saying schools are failing to meet future employers' needs, according to the research conducted by the ILO, IOE and the Bureau for Employers' Activities (ACT/EMP).

IOE Secretary-General Roberto Suarez Santos said, "The report confirms that companies, together with business and employer organizations, that embrace connectivity and digitalization will be the winners in this competitive landscape."

The report, Changing Business and Opportunities for Employer and Business Organizations, said that businesses cannot meet the challenges alone and should develop common solutions through Employer and Business Membership Organizations (EBMOs).

The report identifies trends radically altering global business models.

They are regardless of size, sector or location along with technological innovation, global economic integration, climate change and sustainability, demographic and generational shifts, and a global shortage of skilled labor.

"Technological innovation is by far the most influential trend, and is fundamentally changing the way companies add value to products and services," said ACT/EMP Director Deborah France-Massin.

"At the same time, we find that the greater penetration of technology increases the demand for 'human' skills such as creativity, problem-solving, communication and collaboration."

In the survey, 56 percent of respondents identified technological innovation as the global trend having the greatest overall impact on business.

Global economic integration is increasing the harmonization of global corporate governance, tax/regulatory and business environments, which is having an enormous impact on companies.

Some 37 percent of executives mentioned increasing exposure to global economic and political uncertainty as a significant trend.

In Europe, 62 percent of companies in Asia 58 percent, reported that a declining working-age population would have a large impact on their business.

For Latin America and the Caribbean 45 percent and in Africa 39 percent in Africa of businesses, indicated the youth bulge would have a considerable impact on them.

SMEs (small- and medium-sized enterprises) are the most active supporters of changes in the skills agenda, with 84 percent of small businesses supporting updating education systems to meet skills needs.

The role employers and business organizations will play in these coming changes is a crucial element of the debate around the future of work included in the report.