Sri Lanka’s skills gap: An economic reality we can no longer ignore

AT the World Economic Forum in Davos this year, World Bank President Ajay Banga issued a blunt warning: the global economy is heading toward a structural labour market crisis.

- By Dinesh Weerakkody

Over the next decade, billions of young people will enter the workforce, but far fewer quality jobs will be created. Without urgent investment in skills and job creation, this imbalance threatens growth, competitiveness, and social stability. Sri Lanka does not need Davos to recognise this danger. The crisis Banga described is already unfolding at home.

Nearly one million young Sri Lankans are expected to enter the workforce over the next decade. Yet, unless decisive action is taken, the economy will not generate enough productive, well-paying jobs to absorb them. The result is a growing pool of educated but unemployed youth — a warning sign no country can afford to ignore. This is not a failure of aspiration or intelligence. Sri Lanka has one of South Asia’s most educated youth populations. The real problem is a structural mismatch between what our education system produces and what the economy actually needs. Employers across sectors — from tourism and logistics to technology and healthcare — consistently report shortages of job-ready skills. Degrees abound; employability does not.

Human Capital Report