1、Citi is one of the worlds largest financial institutions,operating in all major established and emerging markets.Across these world markets,our employees conduct an ongoing multi-disciplinary conversation accessing information,analyzing data,developing insights,and formulating advice.As our premier

2、thought leadership product,Citi GPS is designed to help our readers navigate the global economys most demanding challenges and to anticipate future themes and trends in a fast-changing and interconnected world.Citi GPS accesses the best elements of our global conversation and harvests the thought le

3、adership of a wide range of senior professionals across our firm.This is not a research report and does not constitute advice on investments or a solicitations to buy or sell any financial instruments.For more information on Citi GPS,please visit our website at GPS:Global Perspectives&Solutions Octo

4、ber 2023SKILLS THAT PAYThe Returns from Specific Skills as Demanded in Job Advertisements Citi GPS:Citi GPS:Global Perspectives&Solutions September 2023 Primary Authors Helen H Krause,CFA Helen is a Managing Director and Head of Data Science Insights at Citi Global Data Insights.Previous to Citi,Hel

5、en was an Executive Director in Alternative Investment at Morgan Stanley and a Senior Portfolio Manager at BlackRock.She has an MSc in Economics and Finance from University of Warwick and an MSc in Mathematical Trading and Finance from Cass Business School.+44-20-7986-8653| Brian Yeung Brian is a Vi

6、ce President and a founding Data Scientist at Citi Global Data Insights.Brians work focuses on developing data science-driven investment insights by leveraging alternative data,and he has led various projects including employment and workforce dynamics,supply chain resilience,and consumer credit car

7、d spend analysis.He holds an MSc in Data Science from University College London and a BSc in Mathematics from Imperial College London.+44-20-7986-8692| Cecily Josten Cecily is a Fellow at The Inclusion Initiative at the London School of Economics.Cecily holds a PhD in Behavioural Science with a focu

8、s on labour markets and labour economics.Her research expertise centres around the future of work and skills,personality traits and inclusion at work.Grace Lordan Dr Lordan is the Founding Director of The Inclusion Initiative and an Associate Professor at the London School of Economics and Political

9、 Science.Grace is an economist and a labour market skills expert.Graces research focuses on inclusive leadership,womens progress in the workplace,the future of work,productivity through diversity and individual success.Pantelis Koutroumpis Pantelis is the Director of the Programme on Technological a

10、nd Economic Change at the Oxford Martin School.Pantelis main research interests are industrial economics,innovation,telecommunications economics,and regulation.He is a member of the editorial board of Telecommunications Policy and has published in several journals including the Journal of Economic L

11、iterature,Journal of the European Economic Association,and Economic Policy,among others.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 3 SKILLS THAT PAY The Returns from Specific Skills as Demanded in Job Adverts What did you want to be when you grew up?As a kid,you prob

12、ably chose occupations you saw in the local community or one that followed in your parents footsteps.Maybe a teacher,doctor,nurse,or fireman.Television opened a whole new list of possibilities leading to visions of being an astronaut or a movie star.But in the 1970s,very few kids would have said the

13、y wanted to be a data scientist.The Citi GPS“Technology at Work”report series launched with the statistic that 47%of jobs in the United States were at risk of automation over the forthcoming decades and similar shares were estimated for other countries.In subsequent reports,we looked at how the rise

14、 of e-commerce was affecting employment;the trends in the workforce from the COVID-19 pandemic;and the potential for outsourcing not only manufacturing jobs,but service jobs as well.While we focused on how technology and automation could negatively affect jobs,we struggled to predict jobs yet to be

15、invented.In the 2019 Citi GPS report Technology at Work v4.0:Navigating the Future of Work,we noted we were on the brink of a technological revolution with the advent of artificial intelligence.Although AI-enabled automation could affect low-income jobs typically performed by workers with no more th

16、an a high school degree,jobs less likely to be replaced would require at least a college degree and consist of tasks centered on complex social interactions and creative skills.With AI now upon us and leading us into the“Fourth Industrial Revolution,”this new report notes hiring has evolved from req

17、uiring specific education and experience criteria to looking more at detailed skills requirements.The report that follows looks at the changing demand for specific skills in this rapidly changing job market.It discusses the skills that are rising and falling in demand and explores how the wages for

18、these skills are changing.Looking at professional occupations,the authors identify two“soft”skills groups and seven“cognitive”skills groups that are increasingly relevant for the future of work and deemed important based on the frequency in which they appear in job advertisements.Overall,the soft sk

19、ill collaborative leadership increased in importance over time in terms of demand and hourly wages.The study also found that cognitive skills in data science are constantly evolving,causing certain data science skills to attract a wage premium in one period,then lose it in the next.Looking specifica

20、lly at AI,demand for AI skills has increased globally by 9 times for“Tech-AI”jobs and 11.3 times for“Broad-AI”ones since 2015.Constantly evolving technology leads to shifting changes in skill set demand.Because of this,continuous learning will be critical in the future,particularly in data science,f

21、or employees to stay relevant.For corporates,this means workforce upskilling will be increasingly important.For investors,analyzing the skills being demanded by a company can determine if that company is seeking the skills most relevant in todays economy.Dreaming about being a data scientist as a ki

22、d would have been a great choice;collecting the skills to meet the roles changing requirements as an adult is an even better one.Kathleen Boyle,CFA Managing Editor,Citi GPS 2023 CitigroupSkills That PayGlobal labor markets are in transition,with automation increasingly replacing workers for routine

23、tasks.This shift is reflected in a rise in demand for workers with interactive and analytical skills in non-routine work.Skills Demand 1950 vs.2020(Number of Mentions per 1,000 Job Ad Words)Using data from job advertisements,we examine the specific skills that are rising and falling in demand across

24、 two time periods.Collaborative leadership registers the steepest increase in demand,reflecting its importance in fostering inclusive environments for innovation.WHICH SKILLS ARE IN DEMAND?RISE OF THE MACHINESSource:Atalay et al.(2020),Citi Global Data Insights Source:LinkUp,London School of Economi

25、cs,Citi Global Data Insights 83567421019502020Non-Routine Interactive Tasks5.07.1Non-Routine Analytical Tasks2.95.5Routine Cognitive Tasks2.00.9Share of Job Adverts Requesting Each of the Nine Skills Groups(2014-15 vs.2018-1Q 2020)Soft SkillsCognitive SkillsCollaborative LeadershipInterpersonal&Orga

26、nizedBig DataProgrammingMachine LearningCloud ComputingResearchMathAnalytical2014-2015%50.14%24.70%1.63%13.60%N/M1.76%16.19%0.19%31.19%#71,718 35,335 2,325 19,448 N/M 2,524 23,152 273 44,607 2018-1Q 2020%61.07%30.85%2.49%13.03%0.19%4.88%18.94%0.21%35.83%#374,087 188,981 15,246 79,827 1,155 29,911 11

27、5,996 1,288 219,461 2%4%5%6%3%1%0%-1%-2%$0.00-$0.16$0.83$1.47-$0.42$0.20$0.40-$0.06CollaborativeLeaderInterpersonal&OrganizedBigDataCloudComputingProgrammingMachineLearningResearchMathAnalytical2014-2015$0.15-$0.36-$0.60-$0.18-$0.54$2.89$0.29$1.25$0.012018-1Q 2020Collaborative Leadership x ResearchB

28、ig Data x Cloud ComputingBig Data x ProgrammingCloud Computing x Programming-1Q 2020$13.66$0.88-$4.81$0.54$4.30$5.16+2ppt-40ppt+1ppt+1ppt0%20%30%10%-10%Occupational-Level Wage Response to a 10-Percentage Point Increase in Demand(%,$per Hour)Occupational Level Wage Response of a 10-Perce

29、ntage Point Increase in Demand for Select Interactions Between Skills Groups(Bars Represent%,$per Hour Embedded)Source:LinkUp,London School of Economics,Citi Global Data InsightsSource:LinkUp,London School of Economics,Citi Global Data InsightsWhen we look at the wage impact of a 10-percentage point

30、 increase in demand,certain data science skills(i.e.,big data and cloud computing)attract a wage premium in the first period,then lose it in the second as those skills became more abundant in the marketplace.Machine learning a more recent technology is an exception,reflecting constant evolution in d

31、ata science.There is a positive interaction between collaborative leadership and research skills in terms of wages.This aligns with literature indicating that automation increases the need for social skills alongside advanced cognitive skills like logical reasoning.DATA SCIENCE EVOLUTION CHANGES SKI

32、LLS PRIORITIESCOMPLEMENTARY SKILLS Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 6 Contents Background 7 Labor Markets Are Shifting and Require Investments in Skills.7 Defining Soft Skills and Cognitive Skills.10 Automation and the Type of Work We Do.11 What Skills Pay

33、More?14 Skills Requirement Evolution.14 The Context of Our Skills Analysis.17 The Rise of the Collaborative Leader.23 Can Collaborative Leadership Be Taught?.25 Interactions Between Skills.25 Data Science Is Not a Fixed Skill.27 Sector Analysis:Jobs vs.Wage Premiums 29 Energy.31 Materials.32 Industr

34、ials.32 Consumer Discretionary.33 Consumer Staples.34 Healthcare.34 Financials.35 Information Technology.36 Communication Services.37 Utilities.37 Real Estate.38 Industry Analysis Summary.39 What Do Other Data Sources Tell Us About Skills Demand Evolution?40 Innovation by Sector.42 Talent Tenure.44

35、Tenure by Sector.45 Recent Data Science Skills:Large Language Models.46 In-Depth:Competition for AI Talent 48 Why Are AI Skills Important?.48 The Rise of Demand for AI Skills.48 Supply of AI Professionals.55 Recruiting Difficulties.56 Cognitive Skills:Implications for Corporates and Investors 62 Con

36、clusion and Policy Recommendations 65 Appendix 68 October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 7 Background Over the past three decades,the global population has registered an increase of 45%,growing from 5.5 billion to close to 8 billion,according to data from the Wor

37、ld Bank.At the same time,the labor market has grown 46%pretty much in line with population growth with the number of employees worldwide increasing from 2.3 billion to 3.3 billion.Masked beneath these growth numbers is the effect of the Third Industrial Revolution,which dramatically changed the dema

38、nd for skills.With the onset of the Fourth Industrial Revolution upon us,the demand for skills is likely to be altered again.1 Figure 1.Number of Employees Worldwide(Billions,Over 15 Years Old)Source:International Labour Organization Labor Markets Are Shifting and Require Investments in Skills Globa

39、l labor markets are currently in transition,with rising automation and technological innovation increasingly leading to the replacement of humans in the workplace by machines.The Third Industrial Revolution,which started in the second half of the 20th century,brought forth the rise of electronics,te

40、lecommunications,and computers.It also resulted in the replacement of humans in jobs that were easily codified because they largely consisted of routine tasks,e.g.,tasks that are repetitive in nature,and caused a large reduction in jobs in the middle of the income distribution,mainly in the manufact

41、uring sector.2 1 See Figure 2 for definitions of the different industrial revolutions.2 David H.Autor and David Dorn,“The Growth of Low-Skill Service Jobs and the Polarization of the U.S.Labor Market,”American Economic Review,Vol.103,No.5,August 2013;Grace Lordan and David Neumark,”People Versus Mac

42、hines:The Impact of Minimum Wages on Automatable Jobs,”Labour Economics,Vol.52,June 2018.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 8 Figure 2.Industrial Revolution Timelines Source:Shutterstock The Fourth Industrial Revolution,which started in 2015,is bringing with

43、it artificial intelligence(AI),robotics,quantum computing,genetic engineering,and the Internet-of-Things(IoT).Together,these new technologies promise to further shape the nature of work.In particular,we expect significant changes to the skills being demanded in the workplace.In their 2022 study,Ceci

44、ly Josten and Grace Lordan analyzed patents in detail to determine the skills of the future and concluded that“people”skills and abstract thinking skills were the most future-proof skills in terms of getting and keeping a job.3 The COVID-19 pandemic accelerated the Fourth Industrial Revolution throu

45、gh the development of technologies with the power to greatly shape the day-to-day work experience.4 One example is remote working,which was driven by an increase in technology adoption across industries and an improvement in technological equipment that enabled virtual transactions and exchanges.As

46、Figure 3 shows,the Online Labour Index 2020 provides an indication of how standard employment is increasingly being supplemented and substituted by temporary gig work mediated by digital platforms.5 3 Cecily Josten and Grace Lordan,“Automation and the Changing Nature of Work,”PLoS ONE,Vol.17,No.5,20

47、22.4 Jonathan Dingel and Brent Neiman,“How Many Jobs Can Be Done at Home?”Journal of Public Economics,Vol.189,No.104235,September 2020.5 The Online Labour Index 2020 is part of the Online Labour Conservatory at the Oxford Internet Institute.See Fabian Stephany et al.,“Online Labour Index 2020:New Wa

48、ys to October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 9 Figure 3.Online Labour Index,2020 Figure 4.Average Number of Work from Home Days per Week That Employees Desire Source:Online Labour Index 2020 Source:Cevat Giray Aksoy et al.(2022)According to a recent survey on wor

49、king arrangements in 27 countries conducted between mid-2021 and early 2022,working from home has become a global norm with employees wanting 1.7 work-from-home days,while employers plan an average of 0.7 work-from-home days per week.6 These tensions remain to be worked out with senior leaders of fi

50、rms across different sectors disagreeing about whether or to what extent remote working should stay in place.By mid-2023,levels of remote work,measured by share of days worked from home,seem to have converged around 25%.7 Overall,the dynamics of the labor market owed to the Fourth Industrial Revolut

51、ion have ramifications for the skills being demanded by employers.The technologies available have the potential to be a powerful complement to professional workers.For example,video communication through software such as Zoom or Microsoft Teams has made remote working possible,and thereby allows com

52、panies to hire the best global talent.Machines,such as medical AI tools,complement doctors in making the right decisions by providing large amounts of data and calculating risks(e.g.,different kinds of clinical decision support software).Technology is also advancing as a powerful substitute for jobs

53、 done by low-skilled workers.For example,modern translating tools such as DeepL could effectively make human translators redundant as it claims to be able to translate even the most complex texts.For many occupations,technology is improving to the point of at least partly substituting for employees.

54、An example is Construction Automations patented bricklaying robot,which built its first house in 2020.Measure the Worlds Remote Freelancing Market,”Big Data&Society,Vol.8,No.2,September 15,2021.6 Cevat Giray Aksoy et al.,Working from Home Around the World,Becker Friedman Institute for Economics at U

55、Chicago,Working Paper No.2022-124,September 2022.7 Jose Maria Barrero,Nicholas Bloom,and Steven J Davis,“The Evolution of Working from Home,”Stanford Institute for Economic Policy Research,June 2023.809000180Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-221.921.32.31.91.81.21.52.11.1

56、1.81.91.91.81.91.71.41.51.71.71.51.61.31.52.12.22.31.70123AustraliaEgyptTaiwanSingaporeRussiaMalaysiaSouth Korea JapanIndiaChinaUkraineUKTurkeySwedenSpainSerbiaPolandNetherlandsItalyHungaryGreeceGermanyFranceAustriaU.S.CanadaBrazilAverageAmericasEuropeAsiaRest Citi GPS:Citi GPS:Global Perspectives&S

57、olutions October 2023 2023 Citigroup 10 It follows that the demand for specific skills from humans is also changing,as firms adopt available technologies that complement and substitute for tasks previously done by the workers they hired.In this report,we discuss the specific skills that are rising a

58、nd falling in demand,and explore how the wages for these skills are changing.We also examine how demand is changing for combinations of specific skills and how this is reflected in the price of wages for occupations that demand them.Our analysis yields useful insights in a number of contexts:It shed

59、s light on the skills that are valuable in todays labor market.This information is useful in terms of hiring,planning,training,and upskilling workers for daily tasks,but importantly,it can also help firms strengthen the employee value proposition to attract and retain talent.It provides information

60、to firms on the price volatility for specific skills.It offers a new lens through which investors can take a pulse of a companys potential for innovation.That is,investors can analyze the skills being demanded by a company in which they are contemplating making an investment and determine if the com

61、pany is seeking the skills that are most relevant in todays economy for a specific occupation.Finally,our work helps to analyze and compare rates of corporate technological adoption by measuring how quickly companies hire a workforce to implement new technologies.Defining Soft Skills and Cognitive S

62、kills In this report we focus on cognitive and soft skills(or non-cognitive skills).Soft skills are an individuals“patterns of thought,feelings,and behaviors and encapsulate a range of characteristics about a person that are not easily observable or calculable.”8 They describe how people think,feel,

63、and act.9 Examples include conscientiousness,empathy,creativity,and collaborative skills.Social skills(or people skills)are a subset of soft skills that center around human interactions.These skills include leadership,negotiation,and successful cooperation.Cognitive skills center around human cognit

64、ion,intelligence,and thinking.They can be defined as“the ability to acquire and interpret higher quality data for decision-making,”and involve the ability to learn and adapt to change.10 Examples are mathematical skills or problem-solving skills.In an occupation,cognitive skills can be very specific

65、 and centered around the ability to perform a certain task,for example,the knowledge of specific computing software to perform data science within a company.Concretely,to become a data scientist,a candidate needs to not just be generally mathematically and quantitively inclined but potentially also

66、know programming languages such as Hadoop or Python.Employers measure the attainment level of such skills by either screening for degree qualifications or certificates or,increasingly,using technical evaluations or internal screening tools.8 Cecily Josten and Grace Lordan,“The Accelerated Value of S

67、ocial Skills in Knowledge Work and the COVID-19 Pandemic,”LSE Public Policy Review,Vol.1,No.4,May 2021.9 Lex Borghans,Bas Ter Weel,and Bruce A.Weinberg,“People Skills and the Labor-Market Outcomes of Underrepresented Groups,”ILR Review,Vol.67,No.2,2014.10 David Deming,The Growing Importance of Decis

68、ion-Making on the Job,National Bureau of Economic Research,Working Paper No.28733,April 2021.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 11 Automation and the Type of Work We Do The First and Second Industrial Revolutions initially increased the demand for low-skilled

69、 labor as increased mechanization assisted individuals in getting their jobs done and mass production increased productivity.11 With the appearance of assembly lines,for example,humans were needed to complement tasks performed by machines and often to finalize assembly.Such basic skills are often re

70、ferred to as routine tasks that involve the frequent repetition of tasks and require few skills.During those first periods of industrialization,people benefited both as workers and as consumers.Not only could low-skilled individuals find jobs,but improvements in technology also meant that they could

71、 afford things they previously could not,such as cars.Productivity rose and the standard of living improved during this time.12 Highly-skilled craftsmen were replaced by machines operated by low-skilled laborers,but overall,more new jobs were created than old ones lost.The Third Industrial Revolutio

72、n shaped labor markets in developed countries and increased the importance of cognitive skills.13 The rise of computers and industrial robots meant that while many roles got automated,qualified staff were needed to operate machinery,thereby complementing machines.14 With even further automation and

73、digitalization,the demand for skills increasingly shifted away from low-skilled labor towards high-skilled labor.However,the invention of the World Wide Web and increasing digitalization more generally meant that entire worker groups were substituted rather than complemented by machines.This type of

74、 industrialization,as compared to the previous ones,benefited low-skilled individuals only as consumers(e.g.,the internet opened up new opportunities free of charge)but hurt them as workers by replacing them.Only high-skilled workers were complemented by machines,which increased the demand for skill

75、ed labor compared to those with lower routine or manual skills.The Citi GPS report Technology at Work v6.0:The Coming of the Post-Production Society discusses how the COVID-19 pandemic has accelerated digitalization and automation,which means low-skilled,low-income jobs are at risk of disappearing e

76、ntirely in the Fourth Industrial Revolution.There is a vast body of research that looks at how work and occupations have changed both over time and as a result of technological changes and innovations.15 For example,Autor and Dorn(2013)found that occupations high in routine tasks,versus those high i

77、n abstract tasks,were more automatable and that the share of occupations with routine tasks is declining.Atalay et al.(2020)found that the frequency of words in job advertisements in newspapers related to routine cognitive tasks declined by more than half between 1950 and 2000.11 Citi GPS,Technology

78、 at Work:The Future of Innovation and Employment,2015.12 McKinsey Global Institute,Jobs Lost,Jobs Gained:Workforce Transitions in a Time of Automation,December 2017.13 Cecily Josten and Grace Lordan,“The Accelerated Value of Social Skills in Knowledge Work and the COVID-19 Pandemic,”LSE Public Polic

79、y Review,Vol.1,No.4,May 2021.14 Citi GPS,Technology at Work:The Future of Innovation and Employment,2015.15 David H.Autor,Frank Levy,and Richard J.Murnane,“The Skill Content of Recent Technological Change:An Empirical Exploration,”The Quarterly Journal of Economics,Vol.118,No.4,November 2003;David H

80、.Autor and David Dorn,“The Growth of Low-Skill Service Jobs and the Polarization of the U.S.Labor Market,”American Economic Review,Vol.103,No.5,August 2013;Cecily Josten and Grace Lordan,“Robots at Work:Automatable and Non-Automatable Jobs,”Handbook of Labor,Human Resources and Population Economics(

81、Springer,2020).Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 12 As depicted in Figure 5,the frequency dropped from 2 to 0.9 mentions per 1,000 job ad words.Routine manual task mentions declined even more.In contrast,the frequency of words related to non-routine analytic

82、 tasks increased from 2.9 to 5.5 mentions per 1,000 job ad words,while non-routine interactive tasks increased from 5 to 7.1 mentions per 1,000 words.Figure 5.Skills Demand 1950 vs.2020:Number of Mentions per 1,000 Job Ad Words Source:Atalay et al.(2020),Citi Global Data Insights Occupations and the

83、ir job descriptions are changing fundamentally.Managerial jobs,for example,are becoming increasingly interactive over time,with a growing focus on teambuilding,coaching,and interactions with customers.16 In contrast to routine tasks that require manual and low-skill levels,occupations with tasks tha

84、t require cognitive and soft skills have been highlighted as increasingly relevant for the future of work.17 Not only is the demand for soft skills rising,but wages for these skills are also higher,affording an increase in returns to workers.18 16 Enghin Atalay et al.,“The Evolution of Work in the U

85、nited States,”American Economic Journal:Applied Economics,Vol.12,No.2,April 2020.17 Catherine J.,Weinberger,“The Increasing Complementarity between Cognitive and Social Skills,”The Review of Economics and Statistics,Vol.96,No.5,2014;David Deming,“The Growing Importance of Social Skills in the Labor

86、Market,”The Quarterly Journal of Economics,Vol.132,No.4.,November 2017;Cecily Josten and Grace Lordan,“The Accelerated Value of Social Skills in Knowledge Work and the COVID-19 Pandemic,”LSE Public Policy Review,Vol.1,No.4,May 2021.18 Per-Anders Edin et al.,“The Rising Return to Noncognitive Skill,”

87、American Economic Journal:Applied Economics,Vol.14,No.2,April 2022;David Deming,“The Growing Importance of Social Skills in the Labor Market,”The Quarterly Journal of Economics,Vol.132,No.4,November 2017.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 13 A concrete illust

88、ration of such soft skills includes decision-making or communication skills that are increasingly important and attract large wage premiums.This points to the importance of skills that help deal with the increasing complexity and open-endedness of job tasks in todays labor market and the future.Soft

89、 skills can also be considered durable skills that are valuable irrespective of changes to the labor market.19 Soft skills have been shown to have positive wage returns(i.e.,wage growth)when complemented with cognitive skills.20 That is,individuals who possess both strong cognitive skills and high l

90、evels of soft skills could command a wage premium over those who only have cognitive skills.This is intuitive if you consider income generators in private equity and investment banking where strong quantitative skills are essential for entry-level positions;however,progression requires external netw

91、ork-building and internal leadership skills.Similarly,for roles in quantum computing or drug discovery,workers absolutely need to be able to apply very precise cognitive skills to do their jobs effectively;however,to be successful in their roles they also need high levels of soft skills to bring the

92、ir teams together to decide on innovative,new applications and explorations,as well as motivate them to stay on course.A similar conclusion emerges when considering roles in a vast array of other high-paying areas of work,including artificial intelligence,civil engineering,marketing,venture capital,

93、and entrepreneurship.Based on the literature,soft skills alone do not garner a positive wage return currently,implying that jobs that do not have a high cognitive skill requirement,are in general poorly paid when they only demand high levels of soft skills.21 An example would be a kindergarten teach

94、er or receptionist.However,among lower-educated workers,wage levels and wage progression are higher in occupations requiring soft skills than in those that do not.22 Receptionists thus benefit from higher bargaining power than cleaners,for example,especially if they work in an innovative environment

95、,i.e.,for a company that invests in innovation.19 Cecily Josten and Grace Lordan,“The Accelerated Value of Social Skills in Knowledge Work and the COVID-19 Pandemic,”LSE Public Policy Review,Vol.1,No.4,May 2021.20 Catherine J.,Weinberger,“The Increasing Complementarity between Cognitive and Social S

96、kills,”The Review of Economics and Statistics,Vol.96,No.5,2014.21 Cecily Josten and Grace Lordan,“Robots at Work:Automatable and Non-Automatable Jobs,”Handbook of Labor,Human Resources and Population Economics(Springer,2020).22 Philippe Aghion et al.,Soft Skills and the Wage Progression of Low-Educa

97、ted Workers,Center for Economic and Policy Research,March 2022.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 14 What Skills Pay More?Skills Requirement Evolution The skills currently demanded in the labor market are being shaped by the Fourth Industrial Revolution.23 In

98、 particular,there is evidence that employers are increasingly demanding and rewarding social skills(e.g.,leadership and communication),while continuing to reward cognitive skills(e.g.,decision-making and analytical).24 However,as discussed in the previous section,demand for soft skills without cogni

99、tive skills in an occupation does not attract higher wages.As tasks are becoming more open-ended with machines performing predictable work,skills such as decision-making or artificial intelligence skills are simultaneously becoming increasingly valuable.25 With the current trends,labor markets are b

100、ecoming more fluid and careers less linear.Between 1990 and 2016,labor markets in the U.S.and globally saw an increase in education and experience requirements in hiring according to a 2016 study from Pew Research Center.This effect was particularly evident after the Great Recession between 2007 and

101、 2012 when worker supply rose,which led to more rigorous education and experience requirements by employers.Corporate hiring strategies often operate according to clear pre-defined criteria.For example,a bachelors degree in business would be a prerequisite to work as an accountant or a track-record

102、of written articles in established newspapers would be a prerequisite to become a journalist.While this is still true for many occupations and roles,we also see that degree requirements and many other clear-cut requirements are being dropped as the labor supply tightens in specific industries.26 Wit

103、h the current rapid labor market developments,the trend of“degree inflation”(i.e.,requiring a bachelors degree for hiring,even for roles that did not previously require one)is being reversed.23 Footnote:Carl Benedikt Frey and Michael C.Osborne,“The Future of Employment:How Susceptible Are Jobs to Co

104、mputerization?,”Technological Forecasting and Social Change,Vol.114,No.254-280,January 2017;Jonathan Dingel and Brent Neiman,“How Many Jobs Can Be Done at Home?,”Journal of Public Economics,Vol.189,No.104235,September 2020.;Murillo Campello,Gaurav Kankanhalli,and Pradeep Muthukrishnan,Corporate Hiri

105、ng Under COVID-19:Labor Market Concentration,Downskilling,and Income Inequality,National Bureau of Economic Research,Working Paper No.27208,May 2020.24 Cecily Josten and Grace Lordan,“The Accelerated Value of Social Skills in Knowledge Work and the COVID-19 Pandemic,”LSE Public Policy Review,Vol.1,N

106、o.4,May 2021;David Deming,The Growing Importance of Decision-Making on the Job,National Bureau of Economic Research,Working Paper No.28733,April 2021;David Deming and Lisa Kahn,“Skill Requirements Across Firms and Labor Markets:Evidence from Job Postings for Professionals,”Journal of Labor Economics

107、,Vol.36,No.S1,January 2018.25 Liudmila Alekseeva et al.,“The Demand for AI Skills in the Labor Market,”Labour Economics,Vol.71,No.102002,August 2021;David Deming,The Growing Importance of Decision-Making on the Job,National Bureau of Economic Research,Working Paper No.28733,April 2021.26 Joseph Full

108、er et al.,The Emerging Degree Reset,Burning Glass Institute,February 2022.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 15 For example,25%of skills requirements for jobs have changed since 2015,according to a study by the professional networking platform LinkedIn in 202

109、2.27 And in the specific example of journalism,the internet enables even previously unknown and unskilled writers(i.e.,in terms of observable criteria such as degrees)to gain recognition as journalists or bloggers.There is a shift away from clear-cut criteria towards competency and skills more broad

110、ly.28 Employers require a more detailed list of skills and now outline skills in job posts that would have previously been assumed when posting a degree requirement.Indeed,based on data from LinkUp,the demand for bachelors degrees for jobs such as editors,writers,and authors,has declined since the p

111、andemic after generally trending upwards since 2016 as shown in Figure 6.29 A more drastic observation is the rapid decline in demand for workers with masters degrees,especially in 2019 when 20%of job ads still demanded such a requirement but by 2022 this share dropped to effectively 0%.Figure 6.Edu

112、cation Requirements in Job Postings:Editors,Writers,and Authors Source:LinkUp,Citi Global Data Insights 27 Pei Ying Chua,“Why a Skills-First Approach to the World of Work Will Create More Opportunities for Both Companies and Professionals,”LinkedIn Economic Graph,December 15,2022.28 Joseph Fuller et

113、 al.,The Emerging Degree Reset,Burning Glass Institute,February 2022.29 LinkUp is a large global job listing index of job openings.It contains job advertisements from websites of publicly traded companies to be used as input for labor market analytics.The data is continuously updated through crawlin

114、g of public websites.The data contains detailed information on each advertisement including the state it was posted in,its Occupational Information Network(O*NET)occupation code,the Global Industry Classification Standard(GICS)codes at the 2-digit level,job and company attributes,and raw job descrip

115、tions and job records.0%20%40%60%80%100%2000202021Bachelors DegreeMasters Degree Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 16 Job titles are also changing,with many roles disappearing and others appearing.An example of an occupation that has di

116、sappeared is that of a teletype operator that was no longer required by the 1980s with the introduction of the fax machine and other newer communication technologies.30 This occupation mainly involved routine tasks and little soft skills.Other occupation groups changed in nature,such as secretarial

117、and administrative assistants:While roles related to typing(i.e.,repetitive tasks)disappeared due to the introduction of word processing technologies,roles involving interactions with people,such as secretaries and receptionists,increased.31 Another more recent example of an occupation under constan

118、t change is that of a social media manager,given the frequency of new platforms coming on stream.This occupation is strong on soft skills requirements such as creativity and communication.Technology-intensive occupations are also currently appearing anew,such as blockchain engineers.Those occupation

119、s require workers to be equipped with the newest cognitive skills.Over the next decades,we expect a reduction in the number of roles available for security guards,shelf stackers,drivers,and bricklayers,given the technologies coming on stream that replace the core tasks done by these workers.32 This

120、shows that skill demand,wage premium,and technology advancement are closely linked to each other.Technological advancements shape the skills needed,which in turn affect the wage premiums associated with such skills.Similarly,high wage premiums incentivize companies to look to technology for automati

121、on,which then affects the skill demand of such roles.Figure 7.Linkages Among Skill,Wage,and Technology Source:Citi Global Data Insights It is crucial to better understand the demand for skills in the labor market over time and in particular the reward to skills as measured by earnings,while taking i

122、nto account technological advancements.This helps policymakers and corporates identify the areas to focus on in terms of upskilling the workforce and talent planning for the future.30 Enghin Atalay et al.,“The Evolution of Work in the United States,”American Economic Journal:Applied Economics,Vol.12

123、,No.2,April 2020.31 Ibid.32 Grace Lordan,“People Versus Machines in the UK:Minimum Wages,Labor Reallocation,and Automatable Jobs,”PLoS ONE,Vol.14,No.12,2019.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 17 We extend the previously studied binary split between cognitive

124、and soft skills to include a detailed list of the most important skill groupings and analyze their wage levels.In our work,“importance”is defined based on the frequency of times an employer states they want a particular skill in a job advert.In the next section,we describe our analysis of a large da

125、taset of job advertisements and how we link the skills requirements in job ads to earnings.The Context of Our Skills Analysis In the face of a rapidly changing market for skills,we analyze how wage premiums(i.e.,where a positive value indicates additional pay relative to a mean wage in our study)at

126、the occupation level of specific skills change over two time periods.Data on the demand for skills is retrieved from LinkUp a large platform of online job advertisements.We analyze job advertisements for companies in the U.S.captured in the MSCI USA Index.Using natural language processing techniques

127、,we can filter out the skills requirements of each job posting(see Appendix for more details).We focus on professional occupations only,that is,occupations that require a certain level of education and experience,such as lawyers or managers.Figure 8.Job Advertisement Example Source:Amazon,LinkUp Cit

128、i GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 18 Job advertisement data is a useful source to study labor market dynamics,as it contains a large amount of data and breadth of information.33 Furthermore,it provides a snapshot of current labor market demand and hence serves

129、as a predictor of the future because an employee hired today will be in their role for at least the near future.34 Job advertisement data has been used in past research to analyze the development of skills requirements in occupations.For example,one study uses online job advertisement data to analyz

130、e skills requirements after the Great Recession and finds that education and experience requirements increased an effect that can be attributed to the increased supply of workers following layoffs during and after the recession.35 Our analysis focuses on the skills versus rewards relationship across

131、 two time periods:2014-15 and 2018-1Q 2020.We choose this time frame for three reasons:(1)online job advertisement data only becomes reliable in 2014 and is very volatile in previous years;(2)March 2020 marked the outbreak of the COVID-19 pandemic that significantly disrupted hiring activities and,a

132、s such,the dynamic of the relationship in question during this period might not be representative;and(3)wage data is based on rolling averages and needs to be two years apart when analyzing time effects.We hence pool data and leave two years in between to account for bias due to rolling averages.We

133、will examine the effects on the skills side in the pandemic period separately later in the report.Given that wages are rarely posted in job listings,we link each job advertisement to wage data based on the state and occupation for which a job was posted.We use hourly wage estimates by occupation and

134、 U.S.state from a data source called Occupational Employment and Wage Statistics(OEWS)from the U.S.Bureau of Labor Statistics(BLS).36 While job posting data can be seen as a proxy for the demand for skills in the labor market,linking it to actual wage outcomes informs on whether the demand for skill

135、s translates into changing“prices”or wages for specific skills at the occupational level.Recall that we define“importance”as the number of job ads that contain a specific skill,and how often they overlap with other skills.Using this approach,we identify nine broad skill groupings that have either be

136、en mentioned in the literature or frequently highlighted as skills of the future.37 Figure 9 shows the nine skills groups and the underlying individual keywords that define membership in each grouping.33 Jason Faberman and Marianna Kudlyak,“What Does Online Job Search Tell Us About the Labor Market?

137、”Economic Perspectives,Vol.40,No.1,2016.34 Anthony P.Carnevale,Tamara Jayasundera,and Dmitri Repnikov,Understanding Online Job Ads Data:A Technical Report,Georgetown University Center on Education and the Workforce,April 2014.35 Alicia Sasser Modestino,Daniel Shoag,and Joshua Balance,“Upskilling:Do

138、Employers Demand Greater Skill When Workers are Plentiful?”The Review of Economics and Statistics,Vol.102,No.4,2020.36 The occupation information is based on six-digit Standard Occupational Classification(SOC)codes.37 To derive the nine skills groupings,we first chose a large pool of keywords that h

139、ave either been mentioned in the literature(e.g.,Deming and Kahn,2018)or frequently highlighted in a professional context as relevant skills of the future(e.g.,McKinsey,2021).We then flag those keywords in the job ad data.This is then used as input for clustering the keywords in a meaningful way usi

140、ng principal components analysis.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 19 Each individual keyword maps to the group if they are mentioned in a job posting.An example is the skills group“collaborative leadership.”This skills group contains the following keywords

141、that are mentioned in job descriptions:strategic,leadership,influence,collaborate,creativity,negotiation,and coaching.If a job ad contains one of these keywords,we flag it as requiring collaborative leadership skills.Overall,the nine skills groupings are divided as two soft skills(“collaborative lea

142、dership”and“interpersonal and organized”)and seven cognitive skills(“big data”,“cloud computing”,“programming”,“machine learning”,“research”,“math”,and“analytical”).Figure 9.Description of the Nine Skills Groups Non-Cognitive Skills Components Cognitive Skills Components Collaborative Leadership Int

143、erpersonal and Organized Big Data Cloud Computing Analytical Research Programming Machine Learning Math Strategic Time management Hadoop Docker Accounting Quantitative XML TensorFlow Calculus Leadership Competing priorities Spark Kubernetes Finance Statistics JSON PyTorch Algebra Influence Interpers

144、onal Hive Amazon Web Services Common software,e.g.,Excel Qualitative JavaScript Keras Trigonometry Collaborate Organized HDFS Terraform Analytical Research SQL Stochastic Creativity Scala Azure Git Negotiation NOSql Jenkins API Coaching Openshift Containerization Openstack Source:London School of Ec

145、onomics,Citi Global Data Insights We link the nine skills groups to wages measured at the occupation level to quantify the occupation-level wage premium for each skill group.We also quantify the occupation-level wage premium for the interactions between skill groupings.There is a large variation in

146、how often each skill grouping appears in the job ads as seen in Figure 10 below.For example,“collaborative leadership”appears in 50.14%of job ads in 2014-15 and 61.07%in 2018-1Q 2020.In comparison,“machine learning”did not appear in job advertisements in LinkUp in the earlier time frame and only app

147、eared in 0.19%of job advertisements in 2018-1Q 2020.The share of requests for“cloud computing”nearly tripled over the two periods.Overall,soft skills tend to be overused in job advertisements,and also across disciplines,while cognitive skills are often more specific.38 Figure 10.Share of Job Adverts

148、 Requesting Each of the Nine Skills Groups Across Two Time Periods(2014-15 vs.2018-1Q 2020)Collaborative Leadership Interpersonal and Organized Big Data Programming Machine Learning Cloud Computing Research Math Analytical 2014-15%50.14%24.70%1.63%13.60%N/M 1.76%16.19%0.19%31.19%#71,718 35,335 2,325

149、 19,448 N/M 2,524 23,152 273 44,607 2018-1Q 2020%61.07%30.85%2.49%13.03%0.19%4.88%18.94%0.21%35.83%#374,087 188,981 15,246 79,827 1,155 29,911 115,996 1,288 219,461 Note:Percentages do not total 100%as job ads may mention more than one skills group.Source:LinkUp,London School of Economics,Citi Globa

150、l Data Insights 38 Federica Calanca et al.,“Responsible Team Players Wanted:An Analysis of Soft Skill Requirements in Job Advertisements,”EPJ Data Science,Vol.8,No.13,April 2019.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 20 Figure 11 documents the share of job ads re

151、questing combinations of selected skill groups over the two periods.39 We focus on the interaction of collaborative leadership and data science skills.Overall,the share of all skills interactions increased over the two time frames.The interaction of“collaborative leadership”and“big data,”for example

152、,increased from 0.8%to 1.6%.The largest interaction both in terms of the absolute value of shares across the two time periods and the steepest increase over time is that of“collaborative leadership”and“research,”which increases by 3.7 percentage points from 9.5%to 13.2%.A potential reason for this i

153、ncrease is that with growing automatability it becomes crucial to complement machines by both understanding what they do through broad cognitive skills such as“research”and by sharing knowledge with others through soft skills such as“collaborative leadership.”For example,doctors increasingly use tec

154、hnology such as Clinical Decision Support Software,but they still need to understand statistics,which is a facet of research skills,alongside making final decisions drawing on their collaborative leadership skills.Figure 11.Share of Job Adverts Requesting Select Combinations of Specific Skills(2014-

155、15 vs.2018-1Q 2020)2014-15 2018-1Q 2020 Collaborative Leadership x Big Data 0.8%1.6%Collaborative Leadership x Cloud Computing 1.0%3.2%Collaborative Leadership x Programming 6.6%8.0%Collaborative Leadership x Research 9.5%13.2%Collaborative Leadership x Machine Learning N/M 0.1%Big Data x Cloud Comp

156、uting 0.3%0.9%Big Data x Programming 1.3%2.0%Big Data x Research 0.4%0.8%Big Data x Machine Learning n/a 0.1%Cloud Computing x Programming 1.1%2.8%Cloud Computing x Research 0.2%0.6%Cloud Computing x Machine Learning n/a 0.0%Programming x Research 2.6%3.2%Programming x Machine Learning N/M 0.1%Resea

157、rch x Machine Learning N/M 0.1%Source:LinkUp,London School of Economics,Citi Global Data Insights To quantify the occupation-level wage premium for each skill grouping,we run a regression of the logarithm of wages on the nine skills groups and then separately for all of their interactions.Interactio

158、ns of skills groups can explain the joint effect of two skills groups on wages.For example,we can ask how much“collaborative leadership”gets rewarded when it is combined with“cloud computing.”When interpreting our regression results,we focus on changes of 10-percentage points between the two time pe

159、riods,and the impact that this change has on hourly wages for the two periods.Intuitively,if demand for a skills group goes up by 10-percentage points,you would expect a positive wage premium if that skill is in short supply.In contrast,if a large subset of the population already has this skill or i

160、t is easy to acquire,the wage response could be expected to be zero or negative.Similarly,if it is possible to“bluff”having a certain skill,the wage response could also be zero or negative.“Bluffing”is most likely for soft skills where there are no easy tests of such skills.Moreover,as wages vary by

161、 occupation across each U.S.state,we can calculate state-specific effects.For instance,we can make comparisons between the cost of an occupation in New York versus Texas,in addition to shares of specific skills being demanded within specific occupations.39 We exclude the interactions between interpe

162、rsonal and organized,analytical,and math as they are negligible in size.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 21 Using our regression outcome,we examine the impact of a 10-percentage point increase in the respective skills group or the interaction thereof on wag

163、es in percent.We zoom in on the most interesting results in the next sections.Figure 12 shows the responses in both percent and in dollar value of wage premiums when the demand for a given skill group increases by 10-percentage points,while Figure 13 captures the demand impact on wages for a combina

164、tion of skills.40 Figure 12.Occupational-Level Wage Response to a 10-Percentage Point Increase in Demand for Each of the Nine Skills Groups(%,$per Hour)Source:LinkUp,London School of Economics,Citi Global Data Insights As can be seen in the results above,machine learning experienced the largest incr

165、ease in wage premium when such demand jumps by 10 percentage points,suggesting such skills were in short supply.Interestingly,big data and cloud computing went the other direction when these two skills groups were highly sought after in the first time period attracting good wages,but this was no lon

166、ger the case in the subsequent recent period as such skills were more abundant in the labor market.Turning our attention to the interaction of skills,Figure 13 demonstrates the largest change observed from the first time period to the second is also the product of big data and cloud computing where

167、previously such combined skills enjoyed a$13.66 premium in pay but faced a significant decrease in the recent period.In contrast,the demand and the wages associated with a combination of cloud computing and programming skills appear to be consistent over time.40 We use the Lasso regression method fo

168、r estimates.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 22 Figure 13.Occupational Level Wage Response of a 10-Percentage Point Increase in Demand for Select Interactions Between Skills Groups(Bars Represent%,Embedded Numbers Represent$per Hour)Source:Citi GPS,LinkUp,L

169、ondon School of Economics,Citi Global Data Insights October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 23 The Rise of the Collaborative Leader A collaborative leader is someone who is able to think strategically and influences others but also scores high on social skills suc

170、h as collaboration and negotiation.From analyzing job ads in the U.S.,we find that occupations in specific states that ask for collaborative leadership skills consistently pay a positive wage premium.Overall,collaborative leadership is increasing in terms of the share of job advertisements requestin

171、g the skill between 2014-15 and 2018-1Q 2020(see Figure 10),in addition to garnering wage premiums that are increasing over time from an effect that is not statistically different from zero in 2014-15 to a positive wage effect in 2018-1Q 2020(see Figure 12).An increase in demand for collaborative le

172、adership by 10-percentage points in 2018-1Q 2020 implies a 0.3%increase in wages.For the mean wage of$49.49 per hour in 2018-1Q 2020,these estimates imply a$0.15 hourly increase in wages.If we look at the Rust Belt states,i.e.,the states that used to focus on manufacturing occupations,the wage premi

173、um varies from$0.11-$0.13(e.g.,Indiana and Wisconsin with$0.11,Illinois with$0.13,and Michigan with$0.12).In comparison,areas with the largest premium are include Washington D.C.with$0.16;New Jersey with$0.15;and California and New York,each with$0.14.Collaboration between managers and leaders is be

174、coming essential in todays workplace.The increasing importance of collaborative leadership skills is intuitive.Facets of collaborative leadership that have been previously highlighted by academic research as valuable include creativity,negotiation,coaching,and strategic planning,in addition to colla

175、boration and leadership.41 Overall,there are two main aspects of collaborative leadership that are relevant for labor markets of today and the future:Occupations that require collaborative leadership are less likely to be automated,as explained by Josten and Lordan in their 2022 study.The occupation

176、s with the highest share in leadership skills requirements all belong to management occupations(e.g.,marketing managers)for which many job tasks are open-ended,making them less likely to be automated and most likely to evolve in response to technology.We find the other soft skill group,“interpersona

177、l and organized,”to have a negative wage premium that increases over time from-$0.16 in 2014-15 to-$0.36 in 2018-1Q 2020.Facets of the“interpersonal and organized”skills group like,for example,“time management”correspond with greater automation.42 This is because such skills center around setting ru

178、les and gathering information,which are tasks that are likely to be automated as they are easily codified.41 Mariagrazia Squicciarini and Heike Nachtigall,Demand for AI Skills in Jobs:Evidence from Online Job Postings,OECD Science,Technology and Innovation Policy Papers,No.2021/03,2021;David Deming

179、and Lisa Kahn,“Skill Requirements Across Firms and Labor Markets:Evidence From Job Postings for Professionals,”Journal of Labor Economics,Vol.36,No.S1,January 2018;McKinsey,“Defining the Skills Citizens will Need in the Future World of Work,”June 25,2021;Cecily Josten and Grace Lordan,“Robots at Wor

180、k:Automatable and Non-Automatable Jobs,”Handbook of Labor,Human Resources,and Population Economics(Springer,2020).42 Cecily Josten and Grace Lordan,“Automation and the Changing Nature of Work,”PLoS ONE,Vol.17,No.5,2022.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 24 Th

181、e“interpersonal and organized”skills group also appears frequently as a requirement for occupations that have been previously highlighted to be at least partly automatable such as financial managers or lawyers.43 The finding of differential rewards to different soft skills(i.e.,“collaborative leader

182、ship”versus“interpersonal and organized”)is in line with a study that found that skills related to leadership such as strategic planning are rewarded while skills related to the“interpersonal and organized”skills groups such as“time management”are punished.44 Collaborative leadership enhances indivi

183、dual and company performance both directly and indirectly through fostering inclusion.Collaboration is crucial for innovation.For innovation and idea creation,working collaboratively has been shown to be paramount in combination with working independently.45 The positive effect of collaboration on i

184、nnovation and performance depends critically on the quality of the collaboration.Being a“connector”is a key trait of a collaborative leader:someone who brings people together in a way that fosters success.46 Hence,a collaborative leader is pivotal in determining the quality of collaboration by foste

185、ring creativity,diversity of thoughts,open discussions,debates,conflicts,decision-making,amongst others.Such a leader can also create a safe space and inclusive environment for individuals to speak up about new ideas.Inclusion prevents groupthink and confirmation bias,both of which have been shown t

186、o hinder performance and innovation in a team and at the company level.47 Inclusive leadership shares many facets with the collaborative leader skills group such as creativity,coaching and influence.48 43 Grace Lordan,Robots at Work,A Report on Automatable and Non-Automatable Employment Shares in Eu

187、rope,European Commission,Directorate-General for Employment,Social Affairs and Inclusion,2018;Cecily Josten and Grace Lordan,“Robots at Work:Automatable and Non-Automatable Jobs,”Handbook of Labor,Human Resources and Population Economics(Springer,2020).44 Federica Calanca et al.,“Responsible Team Pl

188、ayers Wanted:An Analysis of Soft Skill Requirements in Job Advertisements,”EPJ Data Science,Vol.8,No.13,April 2019.45 Karan Girotra,Christian Terwiesch,and Karl Ulrich,“Idea Generation and the Quality of the Best Idea,”Management Science,Vol.56,No.4,April 2010.46 Herminia Ibarra and Morten T.Hansen,

189、“Are You a Collaborative Leader?”Harvard Business Review,”July-August 2011.47 Groupthink is the tendency of a group of likeminded individuals to reciprocate the opinion of others and of the individual not to challenge the group.Confirmation bias is the tendency to search for information and opinions

190、 that support ones previously held beliefs.48 Lynn M.Shore and Beth G.Chung,“Inclusive Leadership:How Leaders Sustain or Discourage Work Group Inclusion,”Group&Organization Management,Vol.47,No.4,2021.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 25 Can Collaborative Le

191、adership Be Taught?Our data illustrates that“collaborative leadership”is being demanded more by employers over time,and there is also a small positive wage premium for these jobs.This highlights the importance for professionals to acquire such skills.But can collaborative leadership be taught?In a 2

192、021 study,Josten and Lordan highlight that soft skills are more malleable than cognitive skills throughout an individuals lifespan.49 They also highlight,however,that there is mixed evidence on the impact of soft skills training for knowledge workers.They argue that it is imperative for teaching pro

193、grams to carefully design courses that are evidence-based where possible.They also call for programs to be vigorously evaluated for their effectiveness.This can be achieved in a manner that mimics randomized control trials,to allow for clear evidence on the causal effect of such courses on the desir

194、ed outcomes.Overall,when it comes to teaching soft skills,context is important.What has been shown to be effective is coaching,specific soft skills training,and leadership development.50 Coaching is the practice of counselling individuals or a group either through teaching soft skills or through tac

195、kling specific issues in the workplace.As a learning and development activity,it is used frequently by companies and has been shown to positively affect individuals career outcomes.51 With regard to specific skills,coaching has been shown to improve leadership skills.One way of improving collaborati

196、ve leadership skills could therefore be through coaching.In addition,specific soft skills training can potentially be promising for improving collaborative leadership.The Inclusion Initiative at the London School of Economics carefully designed a short course,“Inclusive Leadership Through Behavioura

197、l Science,”focusing on collaborative leadership with the aim of improving collaboration,decision-making,and inclusive leadership.52 The course was created based on behavioral science evidence and shows students how to evaluate the changes they make.Interactions Between Skills Overall,we find complem

198、entarity between soft skills and cognitive skills.Specifically,there is a positive interaction between“collaborative leadership”and“research”in terms of wages.As shown in Figure 13 earlier,a 10-percentage point increase in the share of demand for collaborative leadership together with research incre

199、ases wages by 0.01%in 2014-15 and by 1.78%in 2018-1Q 2020.The latter effect is substantially larger,resulting in a pay increase of$0.88 above mean hourly wages of 2018-1Q 2020.This pay increase is higher than the wage premiums garnered for just collaborative leadership($0.15)and research($0.29)durin

200、g the same period.49 Cecily Josten and Grace Lordan,“The Accelerated Value of Social Skills in Knowledge Work and the COVID-19 Pandemic,”LSE Public Policy Review,Vol.1,No.4,May 2021.50 Tomas Chamorro-Premuzic,“Can You Really Train Soft Skills?Some Answers from the Science of Talent,”Forbes,June 14,2

201、018.51 Rebecca Jones,Stephen Woods,and Yves Guillaume,“The Effectiveness of Workplace Coaching:A Meta-Analysis of Learning and Performance Outcomes from Coaching,”Journal of Occupational and Organizational Psychology,Vol.89,No.2,June 2016.52 London School of Economics and Political Science,“Inclusiv

202、e Leadership Through Behavioural Science,“accessed May 4,2023.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 26 The past research mainly focused on the interaction of social skills and cognitive skills.Our“collaborative leadership”skills group is,however,defined at a mor

203、e detailed level.While it contains aspects of social skills such as negotiation or collaboration,it also captures creativity or strategic skills,which have also been highlighted as crucial non-linear thinking skills.53 Similarly,the“research”skills group resembles definitions classified under cognit

204、ive skills but focuses in more detail on broad cognitive skills such as the facets“quantitative”or“qualitative”rather than more niche cognitive skills related to,for example,data science.This finding is in line with the automation literature that highlights that automation increases the need for soc

205、ial skills alongside advanced cognitive skills like logical reasoning.54 Logical reasoning is needed for our“research”skills group as it forms part of each facet of it like“statistics.”Professionals require soft skills but also need to understand the implications of numerical calculations,according

206、to the literature.So even if very advanced technologies come on stream and improve and replace human cognitive abilities,it will ultimately still be important to understand the implications of work done by such technological tools.This can be seen in LinkedIn data where,for example,more automatable

207、cognitive skills like accounting have been decreasing over time,while less automatable skills like management have been increasing in terms of employer demand.Our finding is also in line with Josten and Lordans 2022 study,which finds that jobs that require“people”skills together with“brain”skills ar

208、e less likely to be automated.53 Cecily Josten and Grace Lordan,“Automation and the Changing Nature of Work,”PLoS ONE,Vol.17,No.5,2022.54 McKinsey Global Institute,Jobs Lost,Jobs Gained:Workforce Transitions in a Time of Automation,December 2017.October 2023 Citi GPS:Citi GPS:Global Perspectives&Sol

209、utions 2023 Citigroup 27 Data Science Is Not a Fixed Skill Our findings also clearly demonstrate that data science is constantly evolving,with certain data science skills attracting a wage premium in one period,then losing it in the next.This is a symptom of evolving technology,which demands an evol

210、ving skill set.More specifically,we note that the“big data”(i.e.,big data software skills such as Hadoop or Spark)and“cloud computing”skills groupings(i.e.,cloud technology skills such as Docker or Kubernetes)are associated with positive returns in 2014-15(i.e.,a 10-percentage point increase in the

211、respective skills group leads to 1.85%higher wages in big data or an extra$0.83 in big data and 3.28%higher wages or an extra$1.47 in cloud computing,which turn negative in 2018-1Q 2020(i.e.,a 10-percentage point increase in the respective skills group leads to-1.21%lower wages in big data correspon

212、ding with-$0.60,and-0.37%lower wages in cloud computing corresponding with-$0.18).By 2018-1Q 2020 the skill grouping that increased the most relatively in share demanded and wage premium is“machine learning.”This is a skill grouping that did not appear in job ads in 2014-15 and emerged in between th

213、ese periods as the skills demanded of data scientists continued to evolve.In the 2018-1Q 2020 period,machine learning gained a wage premium,with a 10-percentage point increase in this skills group increasing wages by 5.83%.At professionals mean hourly wages of$49.49 per hour in 2018-1Q 2020,this cor

214、responds with an increase of$2.89.Because the field of data science is constantly evolving,individuals with the right skills are in short supply and as a result enjoy high wage premiums.Those that command the highest wages over time are constantly invested in continuous upskilling.In addition,one st

215、udy found that over time skills related to legacy computing skills such as software engineering and development decreased in importance as compared to newer data science skills like natural language processing.55 There is also evidence that the economic return to university degrees changes more rapi

216、dly for applied subjects such as data science.56 Rapidly changing applied skills are rewarded highly initially like“big data”in our analysis but turn into legacy skills over time that are not rewarded anymore as compared to more stable skills.55 Mariagrazia Squicciarini and Heike Nachtigall,Demand f

217、or AI Skills in Jobs:Evidence from Online Job Postings,OECD Science,Technology and Innovation Policy Papers,No.2021/03,2021.56 David Deming and Kadeem Noray,“Earnings Dynamics,Changing Job Skills,and STEM Careers,”The Quarterly Journal of Economics,Vol.135,No.4,November 2020.Citi GPS:Citi GPS:Global

218、 Perspectives&Solutions October 2023 2023 Citigroup 28 Figure 14.Data Science Skills and Tools Search Volume Source:Google,Citi Global Data Insights The evolution of data science skills can be illustrated by examining Google Search trends in Figure 14.For example,Tensorflow gained significant popula

219、rity around 2017,but has since declined,and the momentum has been replaced by PyTorch.Huggingface,which is an online platform hosting a vast array of open-source pre-trained NLP models,also started gaining notable momentum from 2019 onwards.The rise and fall of the various well-known data science to

220、ols highlights the fact that the data science skill set evolves over time as new research and technologies become available and prominent in the field,complementing or replacing the existing tools.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 29 Sector Analysis:Jobs vs.

221、Wage Premiums In the previous chapter,we found that“collaborative leadership”skills have become increasingly important over time.Further,we highlighted that while data science is increasing in demand,it is constantly evolving in terms of the skills required by employers.This signifies the need for d

222、ata scientists to continuously upskill their offering to their employers.In this chapter,we explore the nuances and highlight differences across industries.Specifically,we document results for 11 Global Industry Classification Standard(GICS)sectors:Energy,Materials,Industrials,Consumer Discretionary

223、,Consumer Staples,Healthcare,Financials,Information Technology,Communication Services,Utilities,and Real Estate.This analysis is insightful for corporates given that technology use and skill needs differ across sectors,which in turn affects the skills requirements and wages associated with them.For

224、example,in the Industrials sector,companies are mainly adopting new digital technologies for automation purposes to increase productivity,whereas in the Information Technology sector,technology applications are more focused on innovation and individual employees are being complemented by emerging te

225、chnologies which could trigger different wage responses.57 In essence,the trend is for labor-intensive sectors and firms to employ technology to substitute workers,whereas capital-intensive sectors and firms are employing technology to complement workers skills.Figure 15.Wages by Sectors(Hourly Wage

226、s in$,Adjusted by CPI)Source:London School of Economics,Citi Global Data Insights 57 Mckinsey,Why Industrials Should Pursue a Tech-Enabled Transformation Now,September 2019.3032343638404244464850200020Communication ServicesConsumer DiscretionaryConsumer StaplesEnergyFinancialsH

227、ealth CareIndustrialsInformation TechnologyMaterialsReal EstateUtilities Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 30 Figure 15 highlights the hourly wage evolution from 2014 to 1Q 2020 in different sectors.Healthcare had the largest increase over the period examine

228、d,while Real Estate witnessed a wage decline of-2.78%for the same time period.These observations are intuitive as Healthcare requires highly specialized skills sets to perform tasks(e.g.,developing new drugs,innovating medical devices,and providing hospital services),resulting in higher wages to att

229、ract the right talent.In contrast,Real Estate requires less cognitive skills and more soft skills,especially“interpersonal and organized”skills,which we earlier noted are automatable,e.g.,time management skills.Figure 16.Skill Demand(2014-15 vs.2018-1Q 2020)Change and Wage Response to 10-Percentage

230、Point Increase in Demand Note:Shaded areas indicate statistical significance at a 95%confidence level.Source:London School of Economics,LinkUp,Citi Global Data Insights Taking a step further,we also examine sectoral divergence in terms of how wages respond to a 10-percentage point increase in skill

231、demand.Figure 16 summarizes the outcome of our analysis.In terms of skill demand between the two periods,apart from machine learning and cloud computing which enjoy the increased demand across the board,the trend for the other skill groups has not been universal.On the wage response to a 10-percenta

232、ge point increase in demand,the picture is very mixed indeed.Even for machine learning,which was a new skill group only appearing in the second period of our analysis,the wage response is negative for 4 out of the 11 GICS sectors.This suggests that there are marked nuances within sectors for the see

233、mingly the same skill group,which we explore further in this chapter.Skill DemandCollaborative LeaderInterpersonal&OrganizedBig DataProgrammingMachine LearningCloud ComputingResearchMathAnalyticalEnergyMaterialsIndustrialsConsumer DiscretionaryConsumer StaplesHealthcareFinancialsInformation Technolo

234、gyComm.ServicesUtilitiesReal EstatesWage ResponseCollaborative LeaderInterpersonal&OrganizedBig DataProgrammingMachine LearningCloud ComputingResearchMathAnalyticalEnergyMaterialsIndustrialsConsumer DiscretionaryConsumer StaplesHealthcareFinancialsInformation TechnologyComm.ServicesUtilitiesReal Est

235、atesOctober 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 31 Energy According to the industry classification GICS,companies in the Energy sector are involved in exploration&production,refining&marketing,storage&transportation of oil&gas,as well as coal&consumable fuels;and oil&

236、gas equipment and services.58 Within soft skills,there is a substantial increase in shares over time in the demand for collaborative leadership,in addition to interpersonal and organizational skills.Furthermore,there are increases in the shares demanded for the entire complement of data science skil

237、ls:big data,programming,machine learning,and cloud computing.Notably,the steepest increase is in programming,whereas math is the only skills group that experiences a decline across the two time frames in our analysis.These movements in skills demanded within the Energy sector mirror the changes bein

238、g experienced in the industry.Over the last decade,there has been pressure on the sector to innovate towards renewable energy and such pressure only intensified further in the last five years as the younger generations have been taking strong stances against climate inactions.For energy companies to

239、 make this shift,it is crucial to have skilled research and development staff(hence the shift in demand towards research and analytical skills)and invest in new technology(hence the shift in demand towards more data skills).Intuitively,when sectors are undergoing major shifts in how business is done

240、,collaborative leadership becomes a necessity to oversee the transition,in addition to enabling innovation.Advanced data science skills are equally important as energy companies collect a lot of data from their operations.Being able to analyze and pinpoint areas for improving operating efficiencies

241、would benefit energy companies in terms of reducing costs,and hence increase profitability.In terms of the impact of a 10-percentage point increase in the respective skills group on wages,we find that for this sector over time the wage premium awarded to collaborative leadership declines from a posi

242、tive value(0.36%)to a negative value(-0.14%).This suggests that even though the sector is demanding more collaborative leaders through their job ads,they are in fact paying less for this skill over time.This observation perhaps reflects that the sector has been undergoing the transformation towards

243、renewables for quite some time,instead of outright hiring more leaders at a premium,they would have a decent pool of home-grown leaders who have progressed through the ranks.Consistent with previous findings,the Energy sector has evolved in the data science skills for which it is willing to pay a pr

244、emium.Notably,the sector is not offering a premium for machine learning.Rather,between 2014-15 and 2018-1Q 2020 there was a shift in offering a premium to those workers skilled in big data towards workers who are experts in cloud computing,indicating a shift in focus from a workforce that can analyz

245、e big data sets on-premises(i.e.,on-site)to those who are skilled in utilizing cloud environments for facilitating efficient data science work.Due to the pressing need in the sector for research and development into renewables,it is not surprising that significant wage premiums(around 0.25%)are offe

246、red to those with expertise in research,in addition to those who are analytical.58 MSCI,“Global Industry Classification Standards,”PDF,accessed May 4,2023.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 32 Materials The Materials sector includes manufacturers of chemicals

247、,construction materials,glass,paper,forest products and related packaging products;and metals,minerals and mining companies,including producers of steel.The stylized facts that emerge from Figure 48 are consistent with the findings for the Energy sector.Specifically,the two soft skills we analyze co

248、llaborative leadership,and interpersonal and organizational skills,increase in demand over time.In addition,the demand for data science skills also increases over the two time periods.Notably,demand for cloud computing in 2014-15 is very low with 0.22%of companies in the Materials sector requiring t

249、hose skills in job ads,before increasing to 1.49%in 2018-1Q 2020,registering a nearly sevenfold rise in demand from the earlier period.This implies that 1.5 out of 100 jobs advertised in the sector required cloud computing in this time frame.Research skills are consistently high in demand across the

250、 two time periods,as they represent 20%(1 in 5)of all jobs advertised in this sector.Lastly,we note that analytical skills increase in demand from being requested in 36%job ads in 2014-15 to 44%in 2018-1Q 2020.Consistent with the Energy sector,we interpret the change in demand for skills in the Mate

251、rials sector as a direct reaction to the trend towards more sustainable and more environmentally-friendly mining practices.Indeed,as we transition towards net zero,raw materials will increase in demand exponentially as we move towards wind and solar power,battery-powered electric vehicles,and increa

252、sed hydrogen production.This transition requires innovation in particular to satisfy growing demand,through leveraging the human and capital resources at the sectors disposal,which data and collaborative leadership skills enable.Notably there is no significant increase in wage premium for the collab

253、orative leadership or interpersonal and organized skills,despite their increase in demand within the sector over time.Similar to the Energy sector,the Materials sector evolves from offering a premium to those workers skilled in big data in 2014-15(of 1.75%)towards workers who are skilled in cloud co

254、mputing.Interestingly,the sector does not offer a wage premium for research or analytical skills although demand for such skills has been consistently high.The negative relationships between a hypothetical 10-percentage-point increase in skill demand and wage premium response for these two skill gro

255、ups suggest that such need is largely fulfilled.Industrials This sector is quite broad as it includes companies that are manufacturers and distributors of capital goods in areas such as aerospace&defense,building products,and electrical equipment,among others.Echoing our findings in the Energy and M

256、aterials sectors,requests for both collaborative leadership and interpersonal and organized skills appear frequently in job ads in the sector.In addition,the demand for these two skills increases over the two time periods in our analysis,suggesting that the Industrials sector is trying to mobilize i

257、ts labor force through hiring people with more effective leadership skills.For data science skills,we see that demand in the sector increases slightly for big data and machine learning skills between the two periods,while simultaneously maintaining a consistent level of demand for programming skills

258、(approximately 1 out of 10 of every job advertised).Consistent with Energy and Materials,demand in the Industrials sector increases significantly for cloud computing skills in job ads(from 1 in every 100 jobs advertised,to 3 in every 100 jobs advertised).October 2023 Citi GPS:Citi GPS:Global Perspec

259、tives&Solutions 2023 Citigroup 33 Notably,and unlike the Energy and Materials sectors,the Industrials sector does offer a small and statistically significant positive wage premium for collaborative leadership skills.The sector does not offer any additional wage premium for most data science,research

260、,or analytical skills despite demanding these skills frequently in job ads.The notable exception is big data skills,which attract a positive wage premium of 1.70%in 2014-15,but this decreases to 1.06%in 2018-1Q 2020.We expect that the failure to reward in-demand skills within Industrials is owed to

261、the sectors tight margins that filter through to cost containment pressures on the wage bill.59 Consumer Discretionary Companies in the Consumer Discretionary sector are businesses that tend to be the most sensitive to economic cycles.The sectors manufacturing segment includes automotive,household d

262、urable goods,leisure equipment,and textiles&apparel.Its services segment includes hotels,restaurants and other leisure facilities,media production and services,and consumer retailing and services.In terms of the demand for the nine skill groups,we see very different trends as compared to the earlier

263、 sectors,which are capital-intensive industries.Recall that for capital-intensive sectors,firms are employing technology to complement labor,while for labor-intensive sectors,firms employ technology to substitute labor.Consumer Discretionary is by and large a labor-intensive sector.It is perhaps the

264、n unsurprising that we see decreasing demand for interpersonal and organized,big data,programming,research,and analytical skills,as technological innovations and automation take over.Only demand for collaborative leadership and cloud computing increase by a considerable amount,while math remains sta

265、ble.Machine learning skill demand also surfaces in the second period in our analysis,as per the other sectors.While collaborative leadership is being requested more frequently in the sector over time(strikingly,65%of job ads request collaborative leadership in 2018-1Q 2020),interpersonal and organiz

266、ed skills are being requested less in job posts in the sector over time(from 33%to 26%).This emphasizes the importance of collaborative leadership in a labor-intensive sector,while interpersonal and organized skills are automatable as mentioned in previous sections.The only cognitive skill that incr

267、eases substantially in demand is cloud computing,in line with the previously-discussed sectors,cementing the importance of this discipline in our rapidly digitalizing world.Specifically for this sector,we see a nearly doubling in demand from 6 out of 100 ads in 2014-15 to 11 out of 100 ads in 2018-1

268、Q 2020.These observations could be a reflection of the rapid rise and deployment of IoT.In addition,many SaaS(software-as-a-service)platforms have been made available to this sector,which reduce the need to have in-house programming personnel but the increased amount of data being collected strength

269、ens the appetite for more workers skilled in cloud computing.59 Alberto Salamone and Grace Lordan,“Can Meaning Make Cents?Making the Meaning of Work Salient for U.S.Manufacturing Workers,”PLoS ONE,Vol.17,No.7,July 8,2022.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 34

270、In terms of wage response to a change in skill demand,this sector exhibits a much more synchronized pattern than earlier sectors where stronger demand leads to larger wage premiums and vice versa for most.The only exceptions are analytical skills and machine learning where the former falls demand an

271、d yet garners a favorable wage premium response,suggesting the sector would reward the“right”or more specialized analytical skills;the latter is a relatively new skill group but a hypothetical increase of 10-percentage points in demand does not lead to positive wage premiums.Consumer Staples Consume

272、r Staples is a non-cyclical sector as it includes manufacturers and distributors of food,beverages,and tobacco,as well as producers of non-durable household goods and personal products.It also consists of food&drug retailing companies,as well as hypermarkets and consumer super centers.In terms of sk

273、ill demand in this sector,contrary to earlier sectors discussed,both collaborative leadership and interpersonal and organized skills are requested less frequently in job ads in the sector from 2014-15 to 2018-1Q 2020.To be clear,demand for the former is still high,with over 60%of ads mentioning skil

274、ls related to collaborative leadership.In addition,our results also show drops in demand for research and analytical skills.Notably,the demand for data science skills is relatively stable between 2014-15 and 2018-1Q 2020.These observations,in our opinion,reflect the recent evolution of automation an

275、d robotics in the sector.Technological advancements and disruptions brought about by a new breed of food and goods delivery companies disintermediate the value chain.Usage of robotics in the distribution and manufacturing of food also increased in recent years.These developments dampen the need for

276、more specific data skills and also result in less focus on interpersonal and organized skills as they get replaced by the progress in automation.On the wage response to a 10-percentage point increase in demand,the sector does offer pay premiums for jobs demanding big data and analytical skills that

277、are stable over time.Programming skills also garner wage premiums in 2018-1Q 2020.Overall,the Consumer Staples sector does not follow the trend of collaborative leadership becoming increasingly relevant and legacy cognitive skills within data science decreasing,which we believe is due to the technol

278、ogy and innovations that have been deployed in the sector.Healthcare This sector consists of healthcare providers&services,companies that manufacture and distribute health care equipment&supplies,and health care technology companies.It also includes companies involved in the research,development,and

279、 production and marketing of pharmaceuticals and biotechnology products.Healthcare is a highly specialized sector where staff can be expected to have solid education backgrounds and/or rigorous training.Unsurprisingly,both collaborative leadership and interpersonal and organized skills have been req

280、uested more frequently in job posts in the sector from 2014-15 to 2018-1Q 2020.Specifically,there is a large increase in the share of job ads seeking collaborative leadership from 37%in 2014-15 to 53%in 2018-1Q 2020.Demand for interpersonal and organized skills also grew from 22%to 27%over the two p

281、eriods.These soft skills are paramount for the sector as firms need strong leaders who could collaborate and at the same time possess skills to be inclusive,hence creating an environment that fosters technological innovations and breakthroughs.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solut

282、ions 2023 Citigroup 35 In addition,the sector significantly increases the proportion of its requests of all the data science skills we consider between 2014-15 and 2018-1Q 2020(i.e.,big data,programming,machine learning and cloud computing),in addition to research and analytical skills.In fact,this

283、is one of the only two sectors(alongside Communication Services)out of eleven GICS sectors that have seen stronger demands across all nine skills groups.Taken together,the changes in demand for skills over time are a testament of a sector that strives to leverage both human and technological inputs

284、to innovate.Collaborative leadership enables firms to better leverage talent with strong research and analytical skills for essential innovations in the sector.For technological deployments,collaborative leadership,combined with excellent data skills,facilitates the effective use of innovative techn

285、ologies.The next question we want to explore is whether the Healthcare sector is incentivizing candidates to acquire these skills through offering wage premiums.In line with demand,the sector offers a pay premium of 0.40%for jobs demanding collaborative leadership in 2018-1Q 2020.Programming also ga

286、rners a wage premium that increases from 0.15%in 2014-15 to 0.53%in 2018-1Q 2020 in the face of increasing demand,while the sector offers a roughly equal premium for machine learning skills,implying that they are incentivizing legacy and emerging programming skills.In addition,the sector offers a pr

287、emium for math skills(even though demand for these skills is low,at around 0.1%of job ads).Interestingly,although the sector relies on strong research and analytical skills,there is no statistically significant additional wage premium beyond the wages garnered by a particular occupation title.Financ

288、ials Companies in this sector are involved in banking,thrifts&mortgage finance,specialized finance,consumer finance,asset management and custody banks,investment banking,and brokerage&insurance.Financials is a service-oriented,classic labor-intensive sector.Accordingly,we observe in the sector a str

289、ong rise in demand in job ads for both collaborative leadership and interpersonal and organized skills over the two periods in our analysis.Specifically,57%of job posts sought collaborative leaderships skills in 2014-15,increasing to 69%in 2018-1Q 2020.Thirty-four percent of job ads sought interpers

290、onal and organizational skills in the first period,rising to 48%in the second.This is a sector emphasizes heavily on teamwork and collaborations,as evidenced by our results.In terms of cognitive skills,there are substantive increases across the data science skills category,with every data science sk

291、ill increasing in demand between 2014-15 and 2018-1Q 2020.The biggest relative increases are in emerging data skills:machine learning and cloud computing.Both research and analytical skills also increase in demand,albeit to a lesser extent.These findings reflect the service-oriented nature of the se

292、ctor.They also reflect that a firms success acutely hinges on strong,collaborative leadership,as well as highly-skilled analytical workers who can truly master AI and machine learning and deploy these techniques with big data for innovation and operational excellence.Citi GPS:Citi GPS:Global Perspec

293、tives&Solutions October 2023 2023 Citigroup 36 Noticeably,the demand for math skills is on the decline,which could be as a result of AI advancements and more financial products being democratized through commercially available SaaS or low-code/no-code applications.That said,this skill group still at

294、tracts the largest wage premium in response to a hypothetical 10-percentage point increase in demand in 2018-1Q 2020.These observations indicate that while the demand in general for math is decreasing,those with more specialized knowledge in certain areas such as stochastic calculus,required in pric

295、ing exotic options,for example would still be rewarded.Elsewhere on the cognitive skills side,the sector offers positive wage premiums to data science skills except big data.Notably,cloud computing garners the second-largest wage premium for 2018-1Q 2020,as this skill group remains critical to eleva

296、te technology infrastructure for operational success.In other skill groups,despite an increase in demand for collaborative leadership and interpersonal and organized skills,this does not materialize into an occupational-level wage premium in the sector.With almost 7 out of 10 jobs seeking skills for

297、 the former(which is among the highest in all GICS sectors),and nearly half of jobs seeking skills for the latter,it is fair to state that they have become skills that employers in the sector would expect candidates to possess,regardless of department or role.Information Technology Information Techn

298、ology companies offer software and information technology services,and manufacture and distribute technology hardware and equipment including cellular phones,computers and peripherals,and semiconductors,among others.Similar to the Financials sector,there is a rise in demand for nearly all skill grou

299、ps in our analysis.The exception is programming,which registers flat demand over the two time periods studied,with almost 1 in 4 jobs requiring these skills.On the soft skills side,collaborative leadership is requested in 57%of job ads in 2014-15 increasing to 62%in 2018-1Q 2020.Interpersonal and or

300、ganization skills are requested in 21%of ads in the first period,rising to 25%in the second.There are also substantive increases across the data science skills category,with nearly every skill group increasing in demand over the two periods.In addition,consistent with the Financials sector,the bigge

301、st relative increases in skills demanded in job ads are in the emerging data science skills:machine learning,and cloud computing.In addition,both research and analytical skills also increase in demand,albeit to a lesser extent.The demand for math skills also increases significantly from 0.13%to 0.24

302、%across the two time periods.On the wage responses to rising skill demand front,despite an increase in demand for interpersonal and organized skills,this does not materialize into an occupational level wage premium,just like many other sectors.However,there is still a small and stable wage premium f

303、or collaborative leadership across the two time periods(around 0.1%).The largest wage premium in the Information Technology sector is associated with job ads that require machine learning skills(0.72%in 2018-1Q 2020)and big data skills(1.2%in the first period to 4.1%in the second),which is intuitive

304、 as digitalization creates abundance of data for technology firms to analyze and innovate.Similar to the Financials sector,occupations within the Information Technology sector that require math skills garner a small wage premium(0.23%),indicating such skills have become more specialized.October 2023

305、 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 37 Communication Services Companies included in the Communication Services sector provide communications services primarily through a fixed-line,cellular or wireless,high bandwidth and/or fiber optic cable network.For the two time frame

306、s examined,there is an increase in demand across all the skill groups we consider,which is consistent with patterns found in Financials and Information Technology sectors.Similar to most of other sectors,collaborative leadership also experiences a significant growth in demand in this sector from 57%

307、of job ads in 2014-15 increasing to 69%in 2018-1Q 2020.Interpersonal and organization skills have a modest increase,being requested in 24%of ads in the first period before rising to 28%in the second.Additionally,every data science skill big data,programming,machine learning and cloud computing has m

308、arked increases in demand between 2014-15 and 2018-1Q 2020.This outcome makes sense as Communication Services played a crucial role in the rise of IoT era and the resultant data collection and analytics require a labor force capable of performing such tasks.Among these skill groups,the biggest incre

309、ase relates to cloud computing,with expertise in cloud computing being requested in approximately two job ads out of 100 in 2014-15,increasing to 7 job ads out of 100 in in 2018-1Q 2020.The sector has moved hand-in-hand with technologies being deployed in mobile,online streaming and app software,all

310、 of which require the data skills we track and cloud computing would allow firms to scale more economically.In terms of wage responses to a 10-percentage point increase in demand for each of the nine skills groups,the increase in demand for interpersonal and organized skills is associated with a sma

311、ll occupational level wage premium of 0.27%,unlike other sectors where negative premiums are documented.For collaborative leadership skills,we find that this skill group initially has a small premium of 0.14%in 2014-15 but turns negative to-0.24%in 2018-1Q 2020.In 2018-1Q 2020,the largest wage premi

312、ums in the Communications sector are associated with job ads that require skills in math(2.33%)and machine learning(1.54%).In addition,occupations requiring math skills garner a wage premium which is over 2%beyond what is embedded within an occupation title.The results reflect the highly desired ski

313、lls amidst the technological evolution in IoT and the integral part the Communications sector plays in the Fourth Industrial Revolution.Utilities Companies in this sector include electric,gas,and water utilities.It also includes independent power producers and energy traders as well as companies tha

314、t engage in electric generation and distribution using renewable sources.There are increases in skills requirements in almost all nine skills groups barring research skills which witness a decline,which is consistent with the Materials sector.There are only a handful of job ads that require machine

315、learning in the later time frame of 2018-1Q 2020.The shares and absolute numbers in the other data science skills such programming or cloud computing are also comparatively low,similar to the Materials sector and to a large extent also the Energy sector.This makes sense as the sector has been going

316、through a transition period like the Materials and Energy sectors where sustainability is the focus,spurring the demand for modernizing sensors and promoting the further deployment of smart grids to scale the utilization of renewables.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023

317、 Citigroup 38 For the wage response analysis,we find that the Utilities sector also does not reward collaborative leadership any additional premium and in fact it exhibits negative wage response in 2018-1Q 2020 of-0.15%.The skills that attract significant wage premiums are big data,programming,and r

318、esearch where for example a 10-percentage-point increase in big data skill demand would achieve a premium of 0.57%in 2018-1Q 2020.These skills are vital for achieving success in the transition towards renewables where data volume from sources such as sensor readings would increase dramatically.Being

319、 able to analyze large volume of data at scale,and research new technologies to improve operational efficiency would be the vital tasks for the sector.Real Estate Companies in this sector are real estate firms engaged in commercial and residential development and operations,and REITs(real estate inv

320、estment trusts).Real estate services such as real estate agents,brokers and appraisers are also included in the sector.Most of the nine skill groups have seen increased demand in the Real Estate sector,apart from research and math skills.The majority of job ads are spread across only three skill gro

321、ups:collaborative leadership,interpersonal and organized,and analytical.Being arguably the most labor-intensive sector among all the GICS sectors,it is unsurprising that interpersonal and organized skills make up a large share of job ads compared to the other cognitive skills.Among the other skill g

322、roups,research skills dominate followed by programming skills.These results keenly reflect the service-oriented nature of the sector,being complemented by analytical skills to identify the trends and opportunities in real estate.Similar to other sectors,digitalization has also been the main trend fo

323、r the Real Estate sector.Online advertising and the collection of large amount of customer data require skilled workers who can research and analyze these sources of information,which in turn can be transformed into a firms competitive advantage if done successfully.To be successful,as in pretty muc

324、h every business,requires strong,collaborative leaders who can motivate and incentivize their teams.In terms of wage responses to increases in skill demand,none of the skills groups effects are significant in 2014-15.Collaborative leadership has a positive effect of 0.5%on wages in 2018-1Q 2020 in l

325、ine with the increasing demand in terms of shares,while interpersonal and organized skills have a negative effect of-0.18%in the same time frame.Analytical skills are still rewarded by real estate firms,as being able to analyze market trends and understand the overarching macro environment would be

326、vitally important for firms success.October 2023 Citi GPS:Citi GPS:Global Perspectives&Solutions 2023 Citigroup 39 Industry Analysis Summary The above sector analysis highlights to what extent the demand and the wage premiums of the nine skills groups are sensitive to industry-specific trends and de

327、velopments.An example of a sector that shows very clear industry trends in its skills demand and premiums is the Healthcare sector.The Healthcare sector strives to leverage human and technological inputs to spur innovations.In that vein,collaborative leadership becomes increasingly important as firm

328、s with motivating leaders can get the best out of their employees.Further,excellent data skills also matter in this sector as they allow for innovation alongside the implementation of innovation through soft skills.Generally speaking,there is a divide between capital-intensive and labor-intensive se

329、ctors where we find evidence of labor-intensive sectors and firms to employ technology to substitute labor through the wage premium and demand relationships,contrary to capital-intensive sectors and firms employing technology to complement labor.Within the latter,the key trend consistently observed

330、in the Energy,Materials,and Utilities sectors stems from the increased pressure to focus on sustainability,especially the transition towards renewable energy.However,in the Energy and Utilities sectors,the demand for collaborative leadership resulting from the trends such as towards to renewable ene

331、rgy is not(yet)reflected in a wage premium for those skills.Overall,shedding light on industry-specific trends is crucial to better understand how sectors differ in terms of skills needs and rewards.The insights also help inform corporates of how their respective industry peers view and reward certa

332、in skill groups,which could be critical in terms of their strategic planning for the future.Citi GPS:Citi GPS:Global Perspectives&Solutions October 2023 2023 Citigroup 40 What Do Other Data Sources Tell Us About Skills Demand Evolution?As an extension to using job advertisement data to infer the ris

333、e and fall of the demand and wage premium in various skills,we have included patents data as an additional source of information to measure the rate of innovation across six of the seven cognitive skill groups and study whether there is any relationship between patents growth and the demand and wage premium for these skill groups.The underlying sense is that impactful inventions can be captured by