Singapore’s President Tharman Shanmugaratnam has issued a stark warning about an impending global employment crisis, calling for fundamental reforms in education and workforce development to address the challenges posed by artificial intelligence and demographic shifts. Speaking at the World Economic Forum’s annual meeting in Davos, Switzerland, the economist and former government minister painted a sobering picture of the future job market.
The numbers are staggering: approximately 1.2 billion people from developing and emerging nations are expected to enter the global workforce over the next decade, yet only 400 million new jobs are projected to be created during that period. This massive gap of 800 million potentially underemployed or unemployed workers represents what Shanmugaratnam called a “crisis of social compact” and a “crisis of hope, of self-belief and dignity, and a crisis of solidarity.”
During the panel titled “Closing the Jobs Gap,” moderated by Business Insider’s editor-in-chief Jamie Heller, Shanmugaratnam—who holds degrees from Harvard, Cambridge, and the London School of Economics—outlined a comprehensive approach to addressing this looming crisis. He emphasized the need to “shape human potential through life,” starting from the crucial first three years of childhood through formal education and continuing into the workplace.
A key concern is the mismatch between education and employment needs. Shanmugaratnam criticized many universities for providing overly academic and insufficiently technical education that fails to align with employer demands. This disconnect has left many graduates jobless and risks leaving “a whole generation feeling the system has failed them.” He stressed the importance of equipping workers with both technical abilities and soft skills necessary for career success.
The rise of artificial intelligence emerged as a central theme in Shanmugaratnam’s address. He discussed the prospect that AI could lead to mass displacement of workers and called for governments and employers to continually invest in workforce development. The goal is to increase the likelihood that AI complements workers’ skills rather than rendering them obsolete. He also urged authorities to provide support for workers who are replaced by the technology.
Additionally, Shanmugaratnam highlighted the challenges facing the informal sector, which employs the vast majority of workers in the developing world. These workers lack job security, have limited opportunities for skill development, and are often underemployed. He advocated for other countries to follow Singapore’s model of providing gig workers with benefits such as workplace injury compensation and social security, while ensuring employers invest in continuous skill development for their workforce.
Key Quotes
If another 800 million people wind up underemployed or fully unemployed, it won’t just be an economic, social, and political nightmare — it will represent a ‘crisis of social compact’ and a ‘crisis of hope, of self-belief and dignity, and a crisis of solidarity.’
President Tharman Shanmugaratnam emphasized the profound human and societal implications of the projected jobs gap, framing it as more than just an economic issue but a fundamental threat to social cohesion and human dignity.
A whole generation feeling the system has failed them.
Shanmugaratnam warned about the consequences of the mismatch between university education and employer needs, highlighting how inadequate preparation for the modern workforce could create widespread disillusionment among young workers.
Shaping human potential through life, from the crucial first three years of a child’s life to what they learn in school and at work.
The Singapore president outlined his vision for addressing the jobs crisis through comprehensive, lifelong education and skill development, emphasizing that preparation for the AI era must begin in early childhood and continue throughout workers’ careers.
Our Take
Shanmugaratnam’s intervention at Davos represents a crucial reality check for the AI industry and policymakers. While much of the AI discourse focuses on technological breakthroughs and business opportunities, he redirects attention to the human cost of automation. His call for AI to complement rather than replace workers is aspirational but requires concrete policy action that many governments have yet to implement. The 800 million jobs gap he identifies isn’t hypothetical—it’s a mathematical certainty based on current demographic and economic trends. What’s particularly insightful is his recognition that technical skills alone won’t suffice; workers need adaptability, creativity, and soft skills that AI cannot easily replicate. Singapore’s model of protecting gig workers while promoting continuous learning offers a pragmatic blueprint, though scaling it globally will require unprecedented international cooperation. The question isn’t whether AI will disrupt labor markets—it’s whether societies will act quickly enough to prevent the “crisis of hope” Shanmugaratnam warns about.
Why This Matters
This warning from one of Asia’s most respected economic voices underscores the urgency of preparing for AI’s transformative impact on global labor markets. The convergence of AI-driven automation and massive workforce expansion creates an unprecedented challenge that could destabilize economies and societies worldwide if left unaddressed.
Shanmugaratnam’s call for education reform highlights a critical gap in how societies are preparing workers for an AI-augmented future. The mismatch between academic training and practical skills needed in AI-era workplaces threatens to create a lost generation of workers. His emphasis on continuous learning and skill development throughout workers’ lives reflects the reality that AI will require constant adaptation rather than one-time educational preparation.
The focus on informal sector workers is particularly significant, as these vulnerable populations are often overlooked in AI policy discussions despite being most at risk of displacement. Singapore’s approach to providing gig workers with benefits and training could serve as a model for other nations grappling with the intersection of AI advancement and workforce protection. This story matters because it frames AI not just as a technological challenge but as a fundamental test of social solidarity and economic systems, requiring coordinated global action to prevent widespread unemployment and social instability.
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