Key Details
India’s labour market is increasingly rewarding digital capabilities across a broad range of occupations. The ADB’s analysis suggests that digital skills are no longer confined to technology roles and are becoming a key determinant of employability, productivity, and wage growth.
Skill Category | Key Finding |
|---|---|
Basic Digital Skills | Associated with a 5.5% wage premium |
Intermediate Digital Skills | Associated with an 11.9% wage premium |
Advanced Digital Skills | Associated with a 30.7% wage premium |
AI Utilisation Skills | Associated with a 6.6% wage premium |
Digital Skill Demand | Growing rapidly across non-ICT occupations including sales, administration, customer service, and management |
Policy Challenge | Skilling systems must adapt more quickly to evolving labour-market requirements |
Summary
Digital Skills Become an Economy-Wide Requirement
The Asian Development Bank (ADB) has released its Economics Working Paper “Digital Skills Demand and Wage Premia (2019–2024)” (EWP-850), analysing how digitalisation is reshaping labour markets across Asia and the Pacific, with detailed evidence from India.
The study finds that digital skills are no longer concentrated within traditional Information and Communications Technology (ICT) occupations. Instead, digital competencies are increasingly becoming essential across a wide range of sectors, including administration, customer service, sales, operations, and supervisory functions. The fastest growth in digital requirements is occurring within occupations that historically required limited technological expertise.
India’s Digital Wage Premium
Using large-scale online job-posting data and econometric analysis, the study estimates the wage returns associated with different levels of digital capability in India.
Workers possessing basic digital skills earn an average 5.5 percent wage premium, while those with intermediate digital skills command an 11.9 percent premium. The strongest gains are associated with advanced digital skills, which are linked to a substantial 30.7 percent wage premium.
The study also evaluates the labour-market value of artificial intelligence competencies. Skills related to the practical use of AI tools are associated with a 6.6 percent wage premium, indicating growing employer demand for workers who can integrate AI into everyday workflows.
A Shift from Coding-Centric Training to Workplace Digital Competencies
A key conclusion of the report is that future workforce competitiveness will depend less on narrow coding expertise and more on broad-based digital capability.
The analysis highlights growing demand for practical workplace skills such as data analysis, spreadsheet applications, customer relationship management (CRM) platforms, digital content management systems, and AI-assisted workflows. The report argues that digital literacy should increasingly be treated as a foundational skill alongside literacy and numeracy, requiring integration across school education, higher education, and vocational training systems.
To keep pace with rapidly evolving employer requirements, the study recommends greater use of labour-market nowcasting tools that analyse real-time job-posting data and recruitment trends. Such systems can help policymakers identify emerging skill shortages, update curricula more quickly, and align skilling programmes with actual labour-market demand.
Implications for Education and Workforce Planning
The study argues that digital literacy should increasingly be treated as a foundational skill alongside reading, writing, and numeracy. It recommends that education and vocational training systems move beyond narrow coding-focused approaches and incorporate practical digital competencies across disciplines.
What is a Labour Market Nowcasting Model?
A labour market nowcasting model uses real-time data sources—such as online job advertisements, recruitment platforms, and employer demand signals—to track evolving skill requirements as they emerge. Unlike traditional labour surveys, which are often released with significant delays, nowcasting systems provide policymakers with timely insights into changing workforce needs and help align education and training programmes with current labour-market conditions.
Policy Relevance
Strengthens the case for treating digital literacy as a foundational workforce skill: The study suggests that digital competencies are becoming essential across a growing range of occupations, not just technology-intensive sectors.
Supports a shift from coding-centric to workplace-oriented skilling: Demand is growing strongly for practical capabilities such as data analysis, spreadsheets, CRM systems, and digital workflow tools that are widely used across industries.
Provides evidence for aligning Skill India programmes with labour-market demand: Real-time job-posting analytics could help institutions such as MSDE, NSDC, and the Skill India Digital Hub update training curricula more rapidly.
Highlights the risk of widening digital inequalities: Since advanced digital skills attract the largest wage premiums, unequal access to quality digital education and training could reinforce income disparities across regions and social groups.
Links human capital development directly to productivity growth: As digital capabilities diffuse across manufacturing, services, administration, and business operations, workforce skills become a critical driver of economic competitiveness and wage growth.
Follow the Full Paper Here: SKILLS THAT PAY - DIGITAL SKILLS DEMAND AND WAGE PREMIA IN ASIA AND THE PACIFIC