PreparingtheArmenianandGeorgianworkforce forthefuture Disclaimer This work is a product of the staff of The World Bank with external contributions. The findings, inter-pretations, and conclusions expressed in this work do not necessarily reflect the views of the WorldBank, its Board of Executive Directors, or the governments they represent. The World Bank does notguarantee the accuracy of the data included in this work. The boundaries, colors, denominations,and other information shown on any map in this work do not imply any judgment on the part of theWorld Bank concerning the legal status of any territory or the endorsement or acceptance of suchboundaries. Acknowledgements This report was authored by Daniel Garrote Sanchez, Roberto Claudio Sormani, and Anne-Lore Bri-gitte Fraikin as part of the World Bank’s Strengthening Social Protection Systems in the South Cau-casus work program. The authors are grateful to Martin Moessinger for his excellent research as-sistance, and Lucía Solbes Castro. The note was prepared under the guidance of Rolande SimonePryce (Division Director, South Caucasus), Paolo Belli (Practice Manager, Social Protection and JobsGlobal Practice, Europe and Central Asia Region) and Ahmet Levent Yener (Practice Leader, SouthCaucasus). The team is grateful to thank Anna Berdzenadze, Jeremy Aaron Lebow, Nino V. Morosh-kina, Dhushyanth Raju, Abla Safir, Himmat Sing Sandhu, and Ivan Torre, for their valuable input. Allremaining errors are ours. Table of contents Digitalization..................................................................................................................................................... 9Green Transition............................................................................................................................................... 11Population Aging..............................................................................................................................................12Workers’ Profile................................................................................................................................................13Workforce’s Gaps in Digital, Green and Care Skills.................................................................................14Policy Recommendations............................................................................................................................. 16 1.Three megatrends are transforming the labor markets in Armenia and Georgia......................20 2.1.The Expanding Role of Digitalization the Labor Market...................................................... 252.2.The Green Transition Towards Sustainable Work..................................................................262.3.Demographic shifts and Growing Care Demands.................................................................. 27 3.Methodology of the Occupational Impact and Skill Gap Analysis................................................28 3.1.Identifying Occupational Demand in a Transforming Labor Market..............................283.1.1The Impact of Digitalization on the Occupational Landscape..............................283.1.2Key Occupations in the Green Transition....................................................................... 323.1.3Essential Occupations Supporting an Aging Population.........................................333.2.Identifying Key Occupational Skills............................................................................................ 343.3.Estimating Skill Gaps Across Occupations and Workers...................................................353.4.Integration of ONET data with microdata for Armenia and Georgia.............................353.5.Assumptions and Limitations.......................................................................................................36 4.Labor Market Trends under digitalization, greening, and population aging...............................38 4.1.Shifting Demand in Digital Jobs and Exposure to New Technologies.............................384.2.Labor Market Dynamics under the Green Transition............................................................464.3.Stable Employment and Emerging Pressures in Healthcare Jobs...................................494.4.Population Groups Affected by Workforce Transitions........................................................51 5.Critical Skills for Key Economic Transitions....................................................................................54 5.1Digital skills.......................................................................................................................................... 545.2Green skills............................................................................................................................................565.3Healthcare skills..................................................................................................