Introduction
Over 92 percent of all jobs require digital skills, but approximately one-third of workers don't have the foundational digital skills necessary to qualify for these jobs.
The Federal Reserve Bank of Atlanta's Center for Workforce and Economic Opportunity hosted an Ask Us Anything webinar in May 2023 where panelists discussed the digital skill divide and findings from the Closing the Digital Skill Divide report. This Partners Update reviews the panel discussion.
Key to Navigating Current Labor Market
Digital skills are key to navigating the current labor market. Research by National Skills Coalition in partnership with the Federal Reserve Bank of Atlanta analyzed 43 million online job postings and found an overwhelming demand for digital skills in the labor market. The report categorized digital skills as either "definitely digital skills," which cannot be completed manually (e.g., Salesforce or Python), and "likely digital skills," which are frequently accomplished using a digital device but could be completed manually (e.g., bookkeeping).1 The analysis revealed that 92 percent of all jobs posted in 2021 required digital skills—47 percent required at least one "definitely digital skill" and an additional 45 percent required at least one "likely digital skill" (see the figure below).
Figure 1: Across Industries, 92 percent of Jobs Require at Least One "Definitely" or "Likely" Digital Skill
Source: Closing the Digital Skill Divide by National Skills Coalition with the Federal Reserve Bank of Atlanta (2023)
This finding holds true across all industries, including manufacturing, agriculture, and utilities (see the figure below). The demand persists even for postings from small businesses and for entry-level jobs.
Figure 2: Demand for Digital Skills by Industry
Source: Closing the Digital Skill Divide by National Skills Coalition with the Federal Reserve Bank of Atlanta (2023)
What did the Ask Us Anything panelists tell us?
This article offers a high-level summary of their discussion and key takeaways for leaders and stakeholders working to address the digital skill divide in their communities. Nye Hodge, senior research analyst in the Atlanta Fed's Center for Workforce and Economic Opportunity, facilitated the discussion. Panelists included:
- Annette Taylor, director of the Office of Digital Equity and Literacy in the North Carolina Department of Information Technology
- Amanda Bergson-Shilcock, senior fellow at National Skills Coalition
- Bobby McNeil, president of the North Carolina Chapter of the Blacks In Technology Foundation
- Kennon Harrison, vice president of workforce partnerships at Revature
According to McNeil, digital skills essentially "are skills that will allow a person to manage and operate digital devices to access and manage information—whether it's a mobile or desktop application, or even a platform for sharing and managing information." Some digital skills are foundational, like email, navigating a digital device like a cell phone or tablet, typing, or using timecard software. Others are industry-specific, like a bookkeeper using QuickBooks, a manufacturing engineer using AutoCAD, or a home health aide using electronic medical records.
Despite the ubiquity of demand for digital skills, many workers have not had sufficient opportunity to learn and develop them. Earlier research conducted by National Skills Coalition found that nearly one-third of US workers do not have foundational digital skills. Based on the demand for digital skills in the marketplace, lacking these skills can significantly hinder an individual's ability to successfully attach to the labor market.
Additionally, digital skills are important to support economic mobility. Jobs requiring more digital skills have higher median wages—workers who qualify for jobs that require even one "definitely digital skill" as defined above can earn an average of 23 percent more, or more than $8,000 per year, than in a job that requires no digital skills. This trend holds true as additional digital skills are required. The more digital skills a job requires, the higher its median hourly wage (see the figure below).
Figure 3: As more digital skills are required, median hourly wage rises (2021)
Source: Closing the Digital Skill Divide by National Skills Coalition with the Federal Reserve Bank of Atlanta (2023)
Given the widespread demand for and value of digital skills, what can be done to address the digital skill divide that is present in the labor market?
What New Federal Investments Are Available to Deepen Digital Skills?2
Bergson-Shilcock highlighted that Congress made a historic investment in digital skills through the Bipartisan Infrastructure Law, which allocated $2.75 billion in Digital Equity Act funding and $42.45 billion in Broadband Equity, Access, and Deployment (BEAD) program funding.
According to the National Telecommunications and Information Administration (NTIA), the federal agency charged with administering these funds, BEAD investment will prioritize unserved and underserved locations for broadband infrastructure and include eligible funding for workforce development. The Digital Equity Act, also administered by NTIA, establishes three new grant programs that aim to "promote digital inclusion," in part by providing eligible funding for digital literacy and skills education to covered populations. Bergson-Shilcock noted that together these programs are particularly well-positioned to help close the digital skills gap because they include funding specifically intended to reach underserved communities.
Bergson-Shilcock stressed two important notes about this funding:
- During a public comment period, states will invite input on their 5-year plans that will establish how the money will be allocated. This will occur in late summer or early fall depending on your state. Learn more about how to participate in your state's comment process here.
- Input from a diverse set of stakeholders will make the plans stronger. Individuals and organizations can promote awareness of the funding and the opportunity to provide input.
How Can States and Private Firms Help Address the Digital Skill Divide?
States are addressing this challenge in many ways. Taylor spoke about North Carolina's efforts to address the digital skill divide. North Carolina governor Roy Cooper created the Office of Digital Equity and Literacy in 2021 and Taylor noted that the state is "very focused on building capacity in local communities so that we can meet their digital needs…One of our goals is for all 100 counties in North Carolina have a digital inclusion plan, and ensuring those counties provide needed resources to these communities."
To that end, Taylor highlighted the state's initiative in partnership with North Carolina State University3 that assists counties in collaborating with a wide range of stakeholders to develop effective digital inclusion plans. As of the date of the panel, North Carolina also announced that it will use $4 million of its American Rescue Plan Act (ARPA) funds to invest in a new Digital Navigator Initiative that seeks "to help connect North Carolinians to services that aid with home connectivity issues, digital device use, digital skills acquisition, and Affordable Connectivity Program enrollment."4
How Can Industry Leaders and Employers Get Involved in Solutions?
Harrison is vice president of workforce partnerships at Revature, a private company that trains tech talent and matches job seekers to employers. He shared one way industry leaders are helping individuals overcome challenges of acquiring necessary skills. Revature uses a hire-train-deploy program, much like a traditional earn-to-learn model, that removes barriers like the cost of education and the challenge of "getting your foot in the door" to a tech job. Revature hires individuals as W-2 employees and trains them for the first 10 to 12 weeks of their employment based on the skills and competencies their clients, the employers, need.
By providing hundreds of hours of skill-building content to as many people as possible, "our model also provides a level of empowerment to those who wouldn't normally believe that these opportunities are available to them," Harrison said. To close the digital skills gap, he said "industry must be incented to invest effectively in workforce development across the board—tech, nursing, manufacturing, every job that requires skills-training."
Conclusion
Digital skills are critical for earners and learners at every stage of their careers. However, more can be done to ensure that all individuals have access to tools that teach and develop digital skills. The Ask Us Anything panelists showed how individuals, workforce development organizations, local governments, educational institutions, and industry partners can be a part of the solution.
To learn more about this event, including full panelist bios, the event transcript, and relevant resources, please visit the event page.
By Elizabeth Bogue, CED senior research analyst in the Center for Workforce and Economic Opportunity. The views expressed here are the panelists' and are not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the author's responsibility. For questions on the Closing the Digital Skill Divide report, please reach out to Nye Hodge, CED senior research analyst in the Center for Workforce and Economic Opportunity.
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1 See the methodology section of the Closing the Digital Skill Divide report for more detail on skill categorization.
2 Note: The Atlanta Fed and the Center for Workforce and Economic Opportunity do not provide funding for grants or programs, nor does it select grant recipients or program participants. The Atlanta Fed does not provide investment advice of any type.
3 Annette Taylor clarified after the event that the State of North Carolina is providing funding to North Carolina State University for the "Building a New Digital Economy" (BAND-NC) program, which will work with counties to develop a digital inclusion plan. However, counties must apply for and receive a planning grant from BAND-NC to participate.
4 "Digital Navigator Grants Worth $4M to Help North Carolinians Gain Online Skills, Access," North Carolina Department of Information Technology, Division of Broadband and Digital Equity, accessed July 7, 2023.https://www.ncbroadband.gov/news/press-releases/2023/05/31/digital-navigator-grants-worth-4m-help-north-carolinians-gain-online-skills-access.