Is it endangering U.S. competitiveness?

Executive Summary

Even before the U.S. unemployment rate fell to 4.1 percent last year, many companies were reporting a troublesome gap between the skills they needed to run and expand their businesses and the qualifications of job candidates. The disconnect is especially acute in the fields of health care, computer technology and manufacturing, but it exists in a wide variety of industries. Economists warn that a failure to close the gap could have consequences for U.S. competitiveness and economic growth. Some experts argue that these hiring difficulties have been exaggerated and that, where shortages do exist, the lack of skilled applicants is just one of many factors that are responsible. At the same time, policymakers are proposing initiatives that include more apprenticeship programs and a better alignment between educational curriculums and workforce needs.

Among the key takeaways:

  • The skills gap costs individual companies an average of $800,000 annually in lost business and productivity, one survey found.

  • In addition to specific training gaps, some employers report that applicants lack “soft skills” such as communications and problem-solving capabilities.

  • Some economists argue that employers need to revive or strengthen training programs and review their compensation rates to close the skills gap.

  • Click here to listen to an interview with author Kathleen Murray or click here for the transcript.

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Resources for Further Study



Building America’s Skilled Technical Workforce,” National Academies of Science, Engineering and Medicine/National Academies Press, 2017. A research group explores the best way to give middle-skill employees the training they need.

Alper, Patty, “Teach to Work: How a Mentor, a Mentee, and a Project Can Close the Skills Gap in America,” Routledge, 2017. A marketing consultant and member of the White House initiative on how to build mentorship in the fields of science, technology, engineering and math (STEM) looks at how schools and business can work together.

Hora, Matthew T., “Beyond the Skills Gap: Preparing College Students for Life and Work,” Harvard Education Press, 2016. A University of Wisconsin professor of adult teaching and learning examines the skills gap and the responsibility of business and educators to ready students for the work world.

Newman, Katherine S., and Hella Winston, “Reskilling America: Learning to Labor in the Twenty-First Century,” Metropolitan Books, 2016. An award-winning author (Newman) and a sociologist (Winston) call for the United States to re-energize its vocational training system.


Belkin, Douglas, “Why an Honors Student Wants to Skip College and Go to Trade School,” The Wall Street Journal, March 5, 2018, Some top students are forgoing college to pursue a trade.

Freifeld, Lorri, “Bridging the Skills Gap,” Training, accessed April 11, 2018, A leading training magazine examines how companies can deal with the skills gap.

Gewertz, Catherine, “Is There Really a ‘Skills Gap’?” Education Week, July 18, 2017, An education reporter questions whether the skills gap exists.

Goldman, Jeremy, “Nearly Half of Companies Say They Don’t Have the Digital Skills They Need,” Harvard Business Review, July 28, 2017, The founder and CEO of Firebrand Group, a New York City consultancy, explores why so many workers lack digital skills.

Streur, John, and George Serafeim, “Stop Waiting for Governments to Close the Skills Gap,” Harvard Business Review, Jan. 11, 2017, Two business professors argue that government can be of only limited help in dealing with the skills gap.

Weaver, Andrew, “The Myth of the Skills Gap,” MIT Technology Review, Aug. 25, 2017, A labor professor says the skills gap does not exist.

Reports and Studies

“2017 Skills Gap Report,” Udemy, March 11, 2017, An online education firm surveys Americans about the skills gap.

“Investing in America’s data science and analytics talent,” PricewaterhouseCoopers and the Business-Higher Education Forum, April 2017, A joint report from PwC and the Business Higher Education Forum looks at eight steps businesses can take to find workers who possess strong data and analytic skills.

Cappelli, Peter, “Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US,” National Bureau of Economic Research, August 2014, A Wharton School professor investigates the data behind the skills gap.

Carnevale, Anthony P., Jeff Strohl and Neil Ridley, “Good Jobs That Pay Without a BA: A State-by-State Analysis,” Georgetown University Center for Education and the Workforce, Nov. 13, 2017, A Georgetown University workforce institute reports on the good jobs available to those without a college degree.

Restuccia, Dan, “Different Skills, Different Gaps: Measuring & Closing the Skills Gap,” Burning Glass Technologies/U.S. Chamber of Commerce Foundation, March 2018, Workforce consultants analyze job data to find the reasons behind the U.S. skills shortages.

Stephens, Rachael, “Mind the Gap: The State of Skills in the U.S.,” Third Way, July 9, 2017, A liberal policy group identifies major skills gaps by looking at a variety of data.

Weaver, Andrew, and Paul Osterman, “Skill Demands and Mismatches in U.S. Manufacturing,” ILR Review, March 2017, A University of Illinois labor professor (Weaver) and a professor of human resources at the Massachusetts Institute of Technology (Osterman) study the skills gap in manufacturing.

The Next Step


Meyrick, Julian, “In Plain Sight: Why Military Veterans Are a Great Fit for Cybersecurity Careers,” SecurityIntelligence, April 5, 2018, Former military personnel are an untapped pool of ideal candidates for cybersecurity positions, says the vice president for IBM Security Europe.

Rayome, Alison DeNisco, “72% of cybersecurity pros say hiring video gamers could fix the IT skills gap,” TechRepublic, April 3, 2018, Most security managers and professionals agree that video game players offer the best solution to the growing cybersecurity skills gap, according to a recent survey by McAfee, a global security technology company.

Wolff, Josephine, “Gamers Are Not the Answer to the Shortage of Cybersecurity Workers,” Slate, April 5, 2018, In order to expand and diversify the cybersecurity field, managers and professionals should look outside the homogenous pool of video gamers, says a Rochester Institute of Technology assistant professor of public policy and computing security.

Gender Gap

Briggs, Helen, “Breaking the mould in a male-dominated workplace,” BBC News, March 18, 2018, To expand diversity in male-dominated science and engineering careers, women need support from each other and from academia in spreading the message that such work is interesting and creative.

Kaser, Rachel, “This company aims to solve coder gender gap by getting girls hooked early,” The Next Web, April 6, 2018, A British tech company is launching an academy to educate girls from an early age in coding and other technical skills to rectify the gender disparity in tech and engineering.

Sastre, Maria, “We need more women in STEM — Aviation may be the key,” The Hill, April 5, 2018, Empowering more women to join aviation, an industry where job growth could double this year, is crucial in diversifying male-dominated STEM fields, says the president of an aviation company.


Association for Talent Development
1640 King St., Box 1443, Alexandria, VA 22313
International association for workforce/management training.

Bureau of Labor Statistics - Division of Information and Marketing Services
2 Massachusetts Ave., N.E., Room 2850, Washington, DC 20212
Source of government data on employment, occupational outlook, jobless estimates and other economic/workforce data.

Georgetown University Center on Education and the Workforce
3300 Whitehaven St., N.W., Suite 3200, Washington, DC 20007
An independent research and policy institute that studies the link between education, career qualifications and workforce demands.

Lumina Foundation
30 S. Meridian St., Suite 700, Indianapolis, IN 46204
An independent foundation committed to making opportunities after high school available to everyone.

The Manufacturing Institute
733 10th St., N.W., Suite 700, Washington, DC, 20001
Association that works to change the image of manufacturing and attract workers to the industry.

National Association of Colleges and Employers
62 Highland Ave., Bethlehem, PA 18017
Organization that connects college career-service professionals, recruiters and businesses and provides employment information and career and market trends.

National Center on Education and the Economy
2121 K St., N.W., Suite 700, Washington, DC 20037
Policy group focused on workforce skills and educational improvement.

STEM Education Coalition
777 6th St., N.W., Suite 510, Washington, DC 20001
Policy organization dedicated to improving the way students learn about science, technology, engineering and mathematics (STEM) to promote American competitiveness.

DOI: 10.1177/237455680413.n1