Upskilling, Reskilling and Finding Talent: The Role of SME Ecosystems

26 May 2023

The OECD Centre for Entrepreneurship, jointly with SMEs, Regions and Cities (CFE) and the Statistics and Data Directorate (SDD), have issued the OECD SME and Entrepreneurship Outlook 2023, a crucial document, in particular the fifth chapter, titled “Upskilling, reskilling and finding talent: the Role of SME Ecosystems”, which focuses on the skills needs and mismatch for SMEs against ongoing transformation trends and long-standing challenges.

According to the report, accessing and using skills is essential for businesses to pursue their economic goals, which is increasingly based on the production of information, knowledge, data and technologies.

Developing skills are relevant for the competitiveness and resilience of SMEs, that have more limited ability to leverage other sources of capital and productivity, compared to large companies.

The increasing demand for technical skills has increased pressure to adapt to digital and green transitions. As adoptive intensive technologies, these bundles need to encompass “transversal skills”, which are not specifically related to a particular job, task, academic discipline or area of knowledge but can be used in a wide variety of situations and work settings. These skills include digital, financial and management competencies as well as soft skills related to behavioural aspects and entrepreneurial mindset, representing key features of entrepreneurial mindsets.

The COVID-19 pandemic also accelerated the necessity of upskilling. The job advertisements posted in 2020 showed, indeed, that the digital skills cluster is the most pronounced shift compared to 2019, growing from 20% to 23% of total skills demand. The OECD analysis of the skills bundles demanded in artificial intelligence-related job postings demonstrates there is a growing demand for transversal skills including written communication, problem-solving skills, teamwork skills, and creativity.

Another driver of change is represented by the green transition, which had a significant impact on energy, transport, manufacturing, construction, agriculture, and waste management. Businesses need to adjust their production and processes to more sustainable regulations. It generated an increased demand for skills requirements in a broader range of jobs throughout the economy: from construction to fashion to scientific research. However, skills demand differs across regions within countries, so upskilling and retraining policies should be joined up with wider local development efforts to address the specific challenges and opportunities that different regions and communities.

SMEs face short-and long-term challenges to access the talent they need to compete in a digital and greener economy. The way SMEs and entrepreneurs identify and act on rapidly evolving skills needs is the key to their adaptation to major transformations trends, but also to their long-term resilience and competitiveness, capacity to drive change, contribution to societal needs and well-being.

In summary, the fifth chapter of the OECD SME and Entrepreneurship Outlook brings forward a narrative concerning the skills needs of SMEs, which does not focus merely on technical competencies, but also on bundles and transversal skills, related to the way SMEs and entrepreneurs develop their businesses, cope with digital innovations, and connect to partners and customers. The way SMEs can access such skills should be addressed to local community and network activities. By doing it, SMEs and entrepreneurs can be effective to improve their overall capacity to cope with the digital and green transitions.

Source: INSME Secretariat

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