$104 Billion at Stake: Pearson Report Warns Australia Risks Falling into Skills Chasm
- Annual Australian losses of AU$104 billion from inefficient career transitions and learning gaps
- AI-led disruption could see 1.5 million Australian jobs transformed by 2030
- “Learning to learn” and modern skilling pathways are critical to unlocking economic and productivity gains
SYDNEY, Australia - 22 September 2025 - New Australian research from Pearson (FTSE: PSON.L), the world’s lifelong learning company, finds that inefficient career transitions and related learning gaps are costing the Australian economy AU$104 billion annually or 3.8% of GDP, equivalent to more than Australia’s entire agriculture sector (2.57%), and almost as much as mining (5.8%) and manufacturing (5.8%)1.
The accompanying report, "Lost in Transition: Fixing the Skills Gap," released today, warns of a potential global "skills chasm" between employer needs and employee capabilities, and urgently calls for a fundamental shift in approaches to learning and skills development.
The findings come at a time when Australia faces chronic skills shortages in key industries, along with almost 340,000 job vacancies2, and productivity growth at its slowest pace in 60 years3.
The cost of missed transitions
The full report details the economic and personal impact of learning gaps during major career transitions, from school to work, redundancy or business shifts, and disruptions caused by AI and automation. Delays, inefficiencies, and mismatched skills mean:
- Australia loses AU$104 billion annually through slow, inefficient career transitions.
- Shortening reskilling transition times by just 20% could deliver a AU$15 billion boost to the economy each year.
- Workers who reskill effectively are more likely to see wage growth of 8-12% within two years.
- AI-led disruption could see 1.5 million Australian jobs transformed by 2030, making adaptive learning and pathways more urgent.
It highlights two critical imperatives for immediate, collaborative action across the education and business sectors: the need to learn more effectively and the creation of modern skilling pathways that evolve with the future of work.
Prioritise "Learning to Learn"
Improving the way people learn is stressed as vital for an adaptive workforce ready for continual upskilling, career pivots and personal career fulfilment. Pearson advocates for "learning to learn" becoming a core focus across education and corporate training, emphasising metacognitive skills such as goal setting, critical thinking and self-regulated learning. A cited study found that these approaches can accelerate yearly learning progress by seven months.
Develop Clear Modern Skilling Pathways
Moving beyond outdated linear career paths, Pearson encourages reimagined, dynamic skilling pathways that flex to future workforce needs. It promotes work-based learning like apprenticeships, greater recognition of global qualifications, and tailored support to align skills with real-world demands.
Taha Haidermota, Australian Country Head and VP Legal, APAC at Pearson, said: “Vocational training and pathways into employment are critical to Australia’s future prosperity, but there is more we can do to ensure skilled workers can contribute fully to the economy.”
“Pearson has awarded seven million BTECs globally - rigorous, future-focused qualifications in fields like IT, construction, business, and science. These are widely recognised internationally, but not in Australia. At a time when the nation faces skills shortages in key industries, recognising reputable international qualifications could help skilled migrants step into the jobs they are trained for and play a meaningful role in lifting productivity.”
The report warns that the challenges are not unique to Australia. Economies worldwide face demographic shifts, rapid technological change, and growing mismatches between employer demand and employee capabilities. Without urgent action, the report reveals billions of dollars of GDP remain at risk.
Haidermota added: “The danger is that today’s skills gap becomes tomorrow’s skills chasm. The old model of education as a one-time launch into a career is no longer fit for purpose. Government, education providers, industry and business must work together to close transition gaps and build a workforce that is resilient, adaptable and future-ready.”
The full report and its findings are based on quantitative analysis, including data from Pearson’s Faethm, literature reviews and interviews with leading experts. Among other topics explored:
- Virtual reality for career exploration
- Lifelong learning financing
- Digital wallets for robust skills tracking
- AI-powered career mapping
- The creation of a common skills language
- Assessments for career progression and wage growth
Download the full Pearson "Lost in Transition: Fixing the Skills Gap” report.
-ENDS-
Media contact
Yvette Hammerschmidt, Thrive PR and Communications
[email protected]
Methodology
The report’s modelling is based on:
- Three major transition points in the work cycle: moving from education to work, job losses through redundancy, and future disruption caused by automation.
- Economic analysis of affected workers, using national datasets (ABS, RBA, Department of Education) to estimate the number of people impacted, average time out of work or training, and typical wages.
- Forward-looking projections on automation, drawing on OECD methodology and Faethm data to identify high-risk occupations and their potential wage impact.
About Pearson
At Pearson, our purpose is simple: to help people realise the life they imagine through learning. We believe that every learning opportunity is a chance for a personal breakthrough. That's why our c. 18,000 Pearson employees are committed to creating vibrant and enriching learning experiences designed for real-life impact. We are the world's lifelong learning company, serving customers in nearly 200 countries with digital content, assessments, qualifications, and data. For us, learning isn't just what we do. It's who we are. Visit us at plc.pearson.com.