What employer data reveals about skills gaps

Even leading higher education systems have blind spots

Japan provides one of the clearest examples of the gap that can emerge between educational excellence and workforce readiness.

Despite having one of the world's strongest higher education systems and a high Skills Alignment score (92.9), Japan continues to face notable gaps in human skills. It has a Human Cognitive Skills gap of -41.2, a Human-Centred Leadership gap of -36.6, and an Entrepreneurial & Innovative Mindset gap of-37.0.

This apparent contradiction highlights that strong universities do not automatically produce workforce-ready graduates. While Japan performs well on many measures of educational quality and future competitiveness, employers continue to report shortages in critical thinking, leadership, adaptability and entrepreneurial capability – precisely the skills that are hardest to automate and increasingly valued in AI-enabled workplaces.

Regional patterns are emerging in skills gaps

The data also reveals clear regional patterns. Across Latin America, Mexico, Brazil, Peru, Uruguay and Panama consistently record some of the weakest results for Human Cognitive Skills, Human-Centred Leadership and Entrepreneurial & Innovative Mindset, suggesting these are shared regional challenges rather than isolated national issues. Our full analysis explores what's driving these regional trends and what they could mean for Latin America's future workforce.

The consistency of these results suggests that the challenge extends beyond individual institutions or national education policies. Rather than reflecting isolated shortcomings, the findings point to a wider regional struggle to translate higher education attainment into the leadership, critical-thinking and innovation capabilities that employers increasingly value.

For universities across the region, the challenge is not simply to produce more graduates with technical expertise. It is to ensure that students also have meaningful opportunities to develop judgement, communication, leadership and entrepreneurial skills alongside their subject knowledge.

Sustainability skills reveal another emerging challenge

While the largest global skills gaps are concentrated in cognitive and leadership capabilities, the Index also highlights a growing challenge around sustainability-related skills. Significant gaps are evident across both lower-income and higher-income economies, from countries such as Bangladesh and Pakistan to more advanced systems including Romania, Brunei and Japan. This suggests that workforce readiness for sustainability-focused industries is not simply a function of economic development or higher education maturity.

Unlike human capability gaps, sustainability skills deficits are not universal. However, where they do exist they are often severe. As environmental and social considerations become increasingly embedded across sectors, many economies are still struggling to equip graduates with the skills needed for industries shaped by decarbonisation, environmental regulation, responsible business practices and the wider green transition.

What universities should take from this

Across the Skills Alignment indicator, employers consistently report larger gaps in human capabilities than in technical skills. They increasingly value graduates who can:

• Think critically
• Make sound judgements
• Lead people and teams
• Communicate effectively
• Innovate and identify opportunities
• Work alongside AI rather than compete with it

For universities, the implication is clear. Future workforce readiness cannot be achieved through curriculum updates alone, and institutions must create opportunities for students to develop the capabilities employers report being hardest to find, including critical thinking, leadership, communication, problem-solving and adaptability, alongside strong disciplinary knowledge.

Many of the largest gaps identified in the Index relate to skills that are not tied to a specific occupation or industry. As AI becomes more capable of performing routine and technical tasks, employers are increasingly differentiating talent based on the ability to exercise judgement, collaborate effectively, navigate uncertainty and apply knowledge in complex real-world contexts. The institutions best positioned to prepare graduates for the future will be those that combine technical excellence with the development of these enduring human capabilities.

Discover the QS World Future Skills Index 2027