A new research paper published by Takamol Holding has highlighted a structural shift taking place across global labour markets. The papers suggests economies are gradually moving away from reliance on traditional employment models towards one centered on proven capabilities and skills as key drivers of productivity and growth. This shift is being accelerated by rapid advances in artificial intelligence and digital transformation.
Titled “Policy Priorities for the Global Labour Market Transition to the Capability Economy”, the paper presents an integrated policy framework to support governments and policymakers in adapting labor market systems to rapidly evolving economic and technological developments.
The paper draws on a number of global indicators that demonstrate the scale of this transition. More than 58 per cent of the global workforce currently operates outside formal employment, while artificial intelligence is expected to create 170 million new jobs by 2030, alongside the displacement of 92 million existing roles. At the same time, nearly 59 per cent of the global workforce is expected to require reskilling to meet the changing demands of the labour market.
The paper explains that today’s labor market systems were built around an economic model closely tied to traditional employment for more than a century, with the employer-employee relationship underpinning social protection, taxation and official statistics. However, this model is facing growing challenges as flexible work and digital platforms expand, and skills increasingly take precedence over traditional qualifications. This creates a need to place individuals and their capabilities, rather than the jobs they hold, at the centre of the economic system.
The paper also notes that the impact of artificial intelligence extends beyond job creation and displacement since it is also reshaping the relationship between work, productivity and the distribution of economic value. This is turn will require more adaptive policies that strengthen human capabilities, ensure the sustainability of social protection and balance innovation with economic fairness.
Against this backdrop, the paper proposes six interconnected priorities:
- Establishing skills as a primary economic signal;
- Treating workforce capacity as strategic infrastructure;
- Governing AI as a workforce multiplier;
- Aligning fiscal systems with capability-based economies;
- Design portable and adaptive protection systems;
- Build computational labor intelligence systems that use real-time information to support policymaking.
It also stresses that a successful transition towards a capability economy will require a more integrated, human-centered approach to work, social protection, finance and measurement. This would enable countries to respond more effectively to demographic and technological shifts while strengthening the future competitiveness of their economies.
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