The Skills Gap: A Shared Challenge for Education and Industry
The economic and societal challenges considered in Pearson’s 2025 Lost in Transition report reveal an escalating mismatch between education systems and workplace needs.
The workforce skills deficit creates major economic instability as well as decreased productivity while limiting career development opportunities.
For the UK, the report reveals that skill mismatches cause annual earnings losses reaching £96 billion which amounts to 4% of the UK’s GDP. At the same time, Pearson suggest, the United States faces over $1 trillion in lost earnings each year because of inefficient school-to-work and job transitions as a result of a mismatch between the skills workers need and the education and training they receive.
The Learning to Earning Struggle:
The “learning to earning” struggle described in Pearson’s Lost in Transition report refers to the growing mismatch between what people learn through formal education and the skills they actually need to succeed in the workforce.
Many learners complete their studies only to discover they lack the practical, adaptable, and digital skills employers demand. This leads to delays in employment, underemployment, and the need for costly retraining.
The result is a systemic disconnect where individuals struggle to turn education into meaningful careers, while businesses face growing talent shortages—ultimately costing the economy billions in lost productivity and earnings.
The Impact of Automation
The implementation of automation technology results in annual earnings losses reaching £64 billion in the UK, and requires organisations to train employees for new technology-based demands, often at increased cost. Employees who lose their jobs through no fault of their own typically lack preparedness for their next positions, which intensifies economic losses and operational waste.
In the UK, the NEET indicator which measures people who not in work, education or training, shows its highest level in a decade, with 1 million young people aged 16–24 now in this position. The workforce faces multiple problems because many younger employees lack proper workplace readiness and experience mental health difficulties and receive insufficient career guidance, while older employers struggle to gain the new skills needed in the current workplace.
The Pearson report argues that better skills pathways through education and evidence-based transition programs could help students move from education into the workplace and reduce training and re-training costs for employers.
Supporting Education:
Future Horizons Education have developed CoursePulse as an AI curriculum analytics platform that delivers the targeted data-driven solution Pearson recommends.
Focusing on curated sources, to avoid hallucinations, this educational technology platform uses reliable datasets from labour market information together with employer and graduate feedback and real-time skill gap assessments to help educational institutions and employers create relevant training and education programs.
CoursePulse analyses skills gap datasets from governments and organisations, reliable and respected employer surveys and graduate skills analysis to help educational institutions create curricula that match present and future job market requirements.
The system allows employers and alumni to provide direct feedback about perceived skills gaps so institutions can make precise modifications to enhance graduate employability. This enables institutions to be proactive in updating their curricula which helps them respond to new demands generated by technological disruptions such as AI and automation.
Supporting Employers:
CoursePulse helps employers develop strategic training alignment solutions. The platform’s skills gap analysis tool allows employers to identify particular workforce skill deficits so they can create appropriate training programs. It suggests key module content to enable workforce skills training more rapidly and at lower cost.
Through CoursePulse's precise analysis employers gain the following benefits:
The system provides benchmarking capabilities through aggregated anonymised data that allows organisations to forecast upcoming skills requirements.
The platform shortens the time and expense of employee retraining which helps organisations maintain their knowledge base while minimising operational interruptions.
