2.4 Labour and skills Labour and skills FIGURE 8 The traditional focus on best-cost labour as a competitive advantage is diminishing. In its place, the availability and quality of skilled labour are becoming paramount. As automation and advanced manufacturing technologies evolve, the demand for a highly skilled workforce capable of working alongside these innovations is increasing. Competitive countries are therefore investing in education, vocational training and lifelong learning programmes to address growing skills gaps. The ability to attract and retain a skilled labour force will be a critical factor in a country’s attractiveness to global industrial companies. Using the indices described in the production readiness model (see Appendix 1), the top three strongest-performing markets for the availability of technologically skilled workers, labor costs, STEM (science, technology, engineering and mathematics) graduates, and trade union density were Australia (converger), Ireland (scaler) and Saudi Arabia (converger). Countries must focus on cultivating a workforce skilled in new manufacturing technologies such as AI and digitalization. As industries transition from electromechanical to digital systems, the competition for these highly sought-after skills intensifies, making it increasingly challenging not just to hire but to retain top talent. Thierry Mabru, Senior Vice-President, Integrated Supply Chain, Garrett MotionSub-factors Skill levels Availability of skilled workers Labour flexibility and retention Laws on temporary workers, power of unions and incentives to retain talent Workforce costs and availability Cost of labour and demographics of the labor force Indices Availability of technology-skilled workers Science, technology, engineering and mathematics graduates Trade union density Labour cost Environmental, social Geopolitical regulatory and skillsResourcesInfrastructure Technologyand governance landscape Fiscal and Labourand energy Source: World Economic Forum in collaboration with Kearney. Beyond Cost: Country Readiness for the Future of Manufacturing and Supply Chains 16

Beyond Cost 2024