Traditional and social media channels are currently full of headlines predicting worsening economic times ahead, with countries across the world facing slowing growth, rising inflation, the impact of geo-political instability and, potentially, recession.
To put things in context, at the UN Conference on Trade and Development in October 2022, the UN warned that the world is on the brink of a recession that could be worse than that seen in the 2008 crisis or the pandemic.
Ongoing STEM skills gaps
Yet, despite the dark clouds on the global economic horizon, the employment outlook for those with science, technology, engineering and mathematics (STEM) skills and knowledge could be relatively brighter than for other workers, not least because of the ongoing skills gaps STEM employers across the world are facing.
For example, research carried out in 2022 shows 93% of engineering and technology organizations in the UAE experienced difficulties in recruiting over the previous 12 months, and 54% are experiencing a skills shortage.
The number of workers requiring digital skills across every sector in Singapore, Australia, India, Indonesia, Japan and South Korea is expected to increase five-fold in the next two years according to relocateglobal.com. In India alone, openings in the IT sector had more than doubled to 129,000 in the space of a year by early 2022.
A separate survey of those countries (plus New Zealand) finds they will collectively need to train an estimated 86 million workers in digital skills over the next year to keep pace with technological developments.
And the UK’s Commission for Employment & Skills estimates that 43% of the country’s STEM vacancies are hard to fill, amid projections that another three million new jobs requiring digital skills will potentially need to be created and filled by 2025.
Positive outlook for STEM employment
Interestingly, in-depth research from the University of Albany shows US employees with STEM skills and knowledge fared pretty well in terms of retaining and gaining employment in both the recent Covid-driven recession and the 2008 crash. While every economy is unique, it’s reasonable to expect to see this trend in other developed economies in, for example, Europe, Australia and Asia.
After the pandemic hit the US in 2020, levels of employment for STEM workers fell by 5% from their pre-Covid peak compared to 14% for non-STEM workers, and by late 2021 the STEM workforce had fully recovered, while levels of employment remained low in other sectors, such as retail and hospitality.
In Europe, public spending on R&D actually increased by 15.2% overall across the OECD countries during the Covid-driven economic slowdown in 2020.
Similarly, in the 2008 recession, STEM employment in the US fell by 4% compared to 7% for non-STEM workers, and recovered twice as fast, according to the four authors of ‘STEM Employment Resiliency During Recessions: Evidence From the Covid-19 Pandemic’.
A surprising discovery
Professor Jerry Marschke, who led the US research, says: “There’s no strong evidence of one STEM sector enjoying a major advantage over another, but there’s no doubt that, overall, STEM workers rode out the Covid recession in much better shape and benefited from greater job security than non-STEM employees.”
Unexpectedly, even in industries not typically regarded as STEM, employees who applied STEM knowledge as part of their work tended to fare better than those who weren’t required to. Of 124 million ‘non-STEM’ US workers, an estimated 72 million are using STEM skills and knowledge in their work.
“Clearly, that means there’s something about using STEM knowledge on the job that means you are more likely to remain employed, regardless of your job title or the industry you are in.”
"There’s no doubt that, overall, STEM workers rode out the Covid recession in much better shape and benefited from greater job security than non-STEM employees."
The researchers have some hypotheses explaining why being STEM-skilled offers job security advantages to employees in both STEM and non-STEM industries during economic turmoil.
The value of STEM skills
Firstly, companies relying on STEM skills tend to ‘hoard labor’ in challenging times. For example, those involved in research and development (R&D) do particularly well in a recession, with R&D expenditure remaining relatively strong during Covid.
Researchers have found that job losses tend to be higher among occupations involving routine activity, which may help to explain some of the employment advantages enjoyed by those using STEM Skills.
Prof Marschke points out that this may reflect that, as R&D is seen as a key factor in economic growth and vital for the long-term success of many organizations, they will seek to hold on to R&D workers to retain knowledge and remain competitive. Furthermore, it is likely they will have invested more heavily in training them.
STEM-related work is also more likely to involve non-routine cognitive-analytic skills than non-STEM roles involving more routine work. Historically, researchers have found that job losses tend to be higher among occupations involving routine activity, which may help to explain some of the employment advantages enjoyed by those using STEM Skills.
Typically, STEM professionals are also employed by larger firms and in the professional, scientific, technical services and information-related sectors, which is likely to give them a greater degree of employment protection in economic downturns. In addition, most – apart from those heavily involved in ‘wet lab’ research – can work from home, which fits in well with new hybrid working patterns.
"Traditionally, graduates tend to do better during a recession. But our research shows that even those without a degree who use STEM knowledge are 25.1% more likely to be retained than those without STEM knowledge.”
They also tend to be more highly educated, explains Prof Marschke. “Around seven out of ten have at least a degree, and we already know that, traditionally, graduates tend do better during a recession. But our research shows that even those without a degree who use STEM knowledge are 25.1% more likely to be retained than those without STEM knowledge.”
The power of STEM
Research co-author Holden Diethorn says: “Our findings suggest that STEM skills offer employment protection during recessions more broadly.”
As this also applies to those who are not college-educated workers, Diethorn argues that it emphasizes the importance of STEM training outside the classroom to prepare workers for jobs in the skilled technical workforce.
Summing up, Prof Marschke says: “Our findings should not be seen as a clear prediction of what might happen in future, as each recession is unique and impacts economies around the world in different ways, but I’m pretty confident that in the event of another recession, STEM workers everywhere are very likely to do better overall than non-STEM workers, just as they’ve done in the past.
“As we recover from the recession, given all the emerging technology and growing exploitation of data, I fully expect the demand for STEM-workers is going to be higher than ever and expect to see relatively robust levels of job security for those already working in STEM roles.”
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