Reskilling for the Future: Labour Market Shifts in the Energy Transition

The transition from fossil fuels to renewable energy is reshaping labour markets, economies and government structures at multiple scales across the world. This structural shift involves not only changes in resource utilization and control, but also significant realignment of energy policies, of patterns of economic development as well as job creation and unemployment. For developing countries, this is particularly important due to the heterogeneous and informal nature of their labour markets.

The discussion, moderated by Prerna Seth, started with panellists sharing specific regional contexts in which the energy transition is taking place in Africa, Middle East and South Asia. It then dove into the complexities of this transition, moving beyond simplistic notions of retraining, to understand the conditions necessary for a just transition for workers.

Regional Insights

Africa (South Africa)

South Africa’s energy transition is taking place against a backdrop of severe socioeconomic challenges: 55 percent poverty rate, 65 percent youth unemployment, and extreme inequality. As Africa’s largest carbon emitter, contributing to 40 percent of continental emissions, the country is working toward positioning this transition as transformative rather than merely technological. The government has identified renewables, electric vehicles, and green hydrogen as priority sectors, projecting creation of total 245,000 jobs by 2035.  These would potentially exceed the 100,000 jobs at risk in coal mining, including those of machine operators, supervisors, technicians and unskilled workers, and those in related sectors such as transportation. However, significant challenges persist: a technological bias favouring high-skilled positions creates “occupational stacking” toward engineering roles; an ad hoc “short course culture” – 77 percent of current training – fails to build sustainable career pathways; and geographical mismatches place most training 6-14 hours from affected mining communities. Evidently, the transition has thus far maintained existing inequality patterns, highlighting the need for a more radical, whole-system approach, including creation of coordinated and concrete implementation plans.

Middle East and North Africa (MENA)

The MENA region demonstrates significant fragmentation in its energy transition, with three distinct categories of countries experiencing different challenges. Conflict-affected areas have seen chaotic, unorganized transitions driven by necessity rather than planning, creating temporary job opportunities without sustainable skills development. More stable “promising markets” like Egypt, Jordan, Tunisia, and Morocco have made progress but still face challenges from fossil fuel dependence. The Gulf Cooperation Council (GCC) countries continue making announcements about renewable energy while maintaining heavy reliance on fossil fuels. Despite having excellent solar potential, the region spends approximately $200 billion annually on oil and gas while having among the lowest shares of renewable energy globally. Most job creation occurs in distribution and installation rather than manufacturing, with insufficient development of medium and low-skilled positions.

South Asia (India)

In India, the development of renewable energy infrastructure is reinforcing existing regional inequalities between the more prosperous southern and western states and the poorer northern and eastern regions. Currently, fossil fuel resources are concentrated in less developed eastern states, giving them some economic advantage, but by mid-century, poorer states may be buying energy from richer ones as renewable capacity develops faster in already-prosperous regions. Similarly, electric vehicle manufacturing is concentrating in industrial belts with existing information technology expertise, particularly between Bangalore and Chennai, emphasizing software skills over mechanical skills needed for traditional vehicle manufacturing. Significant migration barriers, including domestic nativism and challenges accessing social welfare benefits, prevent workers from relocating to access new job opportunities in different regions.

Key Themes driving the energy transition

1. Energy Transition as a Whole-System Transformation

The transition from fossil fuels to renewable energy is not merely a technological shift but represents a profound social and economic transformation that will affect virtually every sector of the economy.

Current approaches to energy transition often focus narrowly on implementing new technologies rather than addressing the necessary systemic transformation of society and the economy. This transition affects not just the energy sector but agriculture, transportation, manufacturing, construction, and others, representing a significant restructuring opportunity that could address existing socioeconomic problems if approached holistically. Unfortunately, the fragmented approaches currently employed are insufficient to manage the scale of change required, as the energy transition involves a fundamental realignment of policies, development patterns, and resource control structures across society.

2. Regional Context and Inequality

Energy transitions unfold differently across regions and within countries, often reinforcing existing patterns of inequality rather than addressing them.

The distribution of renewable energy development is highly uneven, typically concentrating in already-prosperous regions where skilled workers and infrastructure already exist. This creates significant migration barriers, particularly in developing countries, where workers face numerous challenges relocating to access new job opportunities. Each region and country is experiencing unique transition dynamics based on their existing social, economic, and political structures, while the changing geography of energy resources has profound implications for government revenues and the ability to fund social programs. Without deliberate intervention, these dynamics can amplify existing regional and social inequalities rather than create more equitable outcomes often promised by transition advocates.

3. Skills Development Challenges

Current approaches to skills development are often ad hoc, fragmented, and fail to address the needs of the most vulnerable workers, particularly those in low and medium-skilled positions.

The prevalence of brief, unaccredited training programs creates a “short course culture” that fails to establish sustainable career pathways, particularly for young people and vulnerable workers. Most attention is given to high-skilled jobs while neglecting entry-level positions, creating a severe disconnect between available training and the actual needs of the workforce. This problem is exacerbated by geographical mismatches, with training programs often located far from affected communities, and by educational systems structured around sectors that struggle to address cross-cutting issues like sustainability. The overemphasis on entrepreneurship without adequate support systems and the persistent gap between education providers and employers regarding actual skill requirements further undermine effective workforce transition.

4. Technology and Inequality

New technologies alone do not address existing inequalities and may reinforce them if not managed properly.

There is a persistent fallacy of technological determinism—assuming new technologies will automatically create positive social outcomes—when pre-existing patterns of inequality strongly influence how technologies impact different groups. Worker organizations and collective action are crucial for shaping technology implementation, particularly in contexts where unequal access to quality education exacerbates the uneven distribution of benefits. Women and other marginalized groups face additional barriers to accessing opportunities in new technology sectors, while existing power structures heavily influence who benefits from technological change. Without deliberate intervention, the unequal access to skills development simply reinforces existing social stratification, channelling the benefits of new technologies primarily to those who already held advantages.

Key Recommendations

1. Adopt systemic, proactive approaches to planning for the energy transition rather than ad-hoc responses: This requires developing comprehensive, long-term planning frameworks that consider social, economic, and environmental dimensions simultaneously, along with variations in sectoral, geographical and demographic impacts. Moving beyond “magical thinking” about job creation, governments need concrete implementation strategies with coordination across departments, education providers, and industry. Detailed occupational data collection is essential to understand precisely how jobs are changing, supported by ongoing monitoring systems to track transition impacts and adjust strategies accordingly.

2. Focus on creating entry-level and mid-skill job opportunities and clear career pathways: Researchers and policy makers must identify specific entry points for young people and displaced workers, and map out vertical and lateral career progression within emerging green industries. “Feeder job” opportunities that lead to more specialized positions should be developed alongside clear advancement pathways to ensure long-term career viability. All training programs must connect directly to actual job opportunities.

3. Strengthen TVET colleges and vocational training systems that are aligned with industry needs: This means enhancing emphasis and perceived value of technical and vocational institutions while investing in improving their quality and status. Industry representatives should be actively involved in a collaborative curriculum development process to create new programs, offer scholarships, and co-design training that aligns with market needs, including for medium and low-skilled jobs. Accreditation and qualification frameworks must recognize skills needed specifically for green industries.

4. Address spatial inequalities in planning for energy transitions and skills development: It is important that training programs are located in communities most affected by fossil fuel industry decline. Regional development strategies must distribute benefits of new industries more equitably. Transport systems or accommodation support can improve access to training opportunities, and targeted investment incentives can stimulate renewable development in disadvantaged regions. Remote and distributed learning opportunities should be developed to overcome geographical barriers.

5. Support workers’ organizations and collective action to ensure the energy transition addresses inequality: Governments and industry alike must recognize the vital role of organized labour in shaping how technologies are implemented. Workers’ representatives must be included in the transition planning processes. Institutions must provide support to community-based organizations advocating for just transition and create platforms for dialogue between workers, communities, industry, and government ensuring all voices are heard.

6. Develop people-centered approaches to energy transition planning ensuring that the benefits of transition are equitably distributed across social groups: Energy transition strategies should prioritize human wellbeing over purely technological goals through inclusive consultation processes that include marginalized communities. Considering diverse needs of different population groups requires developing transition metrics and feedback mechanisms that measure social outcomes, not just technological deployment, and address any negative impact on vulnerable groups.

Inter-regional transfer of skills and technology to build manufacturing and maintenance capacity: Countries must move beyond importing technologies and adopt developing local manufacturing capabilities by establishing knowledge transfer requirements in international partnerships. Centers of excellence for renewable energy technologies should be created within developing regions, alongside local supply chains and research and development capacity in institutions. Effective intellectual property arrangements must be ensured to enable technology adaptation to local contexts.