Augmented Reality to Play Major Role in Bridging Skills Gap

Written By: David Immerman
  • 2/6/2019
  • Read Time : 5 min

Augmented reality continues to propel digital transformation initiatives forward with companies’ people as the centerpiece of their investments. As part of its ‘Preparing for the Future of Work project’, the World Economic Forum (WEF) recently released a report on the business case for reskilling and upskilling the American worker. WEF estimates that 1.37 million US workers will be fully displaced in the next decade but can be reskilled to new roles with similar skillsets and even higher wage roles at an aggregate cost of $34 billion (about $24,800 per displaced worker). 

Current and future job displacement spending will likely take a similar form as training expenditures today; a mix of enterprises & governmental entities, each with major stakes on the looming skill gap’s potential effect on the US economy.  

The WEF defines reskilling and upskilling as:

Upskilling: Learning new competencies to stay in current role, due to the change in skills required, or adding certain competencies for career progression.
Reskilling: Learning new sets of competencies to transition to a completely new role.

While assuring that the forthcoming talent pool is equipped to fill their open roles, enterprises must invest in their current employee base through training. This is major on-going investment for organizations; global training expenditures for 2017 were estimated to exceed $90 billion and average annual expenditure per learner was more than $1,000.

Although these expenditures seem significant, the WEF report suggests that organizations are not finding business cases and measurable ROI from reskilling and upskilling programs. But they are also acknowledging the side effects of not investing in this labor pool; 60 percent cite skills gap in local labor markets and 36 percent in global labor markets as significant barriers to technology adoption. About 80 percent of these respondents are planning on adopting Internet of Things technologies and 66 percent are adopting virtual and augmented reality in the next four years; while AR can unlock use cases across design, operations, and service, the innovative technology is emerging as a groundbreaking tool for training use cases and is poised to help solve this skill gap conundrum.

Current and Future Workers Value Learning and Training

AR is proving a useful recruitment tool for attracting the next-generation workforce, but organizations also investing in learning and training services is proving increasingly important. According to a survey by Boston Consulting Group in the WEF report, when 360,000 employees and jobseekers were asked ‘what they value most in their jobs?’, the fourth highest answer cited were learning & training opportunities.

Augmented Reality Has Tangible Success for the Enterprise & Worker

AR is already answering previously cited organizational concerns on training ROI; 51 percent of IDC survey respondents agree AR is driving a measurable ROI for employee training.

This augmented reality employee training ROI can be attained through any combination of factors:

  • Lower turnover rates with increased focus on offering training and development to new and existing employees.
  • Lower training overhead costs from scaling expertise and fewer physical prototypes required.
  • Less reliance on traditional training methods (paper manuals, classroom, etc.) that are not immersive and situational.

To the third bullet above, the most effective and widespread training methods cited by IndustryWeek is on-the-floor shadowing and pairing; AR can improve knowledge retention for new employees in situational environments. AR can also be easily updated and customized from an information delivery standpoint; important for contextualizing standard work instructions & aligning job-specific training with shifting workforce trends to more specialized jobs cited by WEF.



Boeing demonstrated the positive impact of training with AR through its trainees assembling an aircraft wing component in less time and at a higher success rate. Microsoft recently announced a contract with the U.S. Army to bring AR to the training grounds and unlock realistic military situations to further prepare soldiers for real-world combat.

The AR training use case is becoming pervasive across the market; 39 percent of PTC customers cite ‘new training methods as the stated objective of their AR experience’ in the latest State of Industrial Augmented Reality report. Organizations successfully implementing their digital transformation initiatives are the ones investing in their workforce as the foundation for their future.

Final Thoughts

New and existing workers are citing learning and training opportunities as major criteria in selecting where they work, yet enterprises are having trouble proving ROI of training programs but understand there is a skill gap inhibiting them from adopting innovative technologies. AR is a promising solution to this skilling challenge where adoption and value recognized continue to increase exponentially.

  • Augmented Reality
  • Industrial Internet of Things
  • Aerospace and Defense
  • Industrial Equipment
  • Digital Transformation

About the Author

David Immerman

David Immerman is as a Consulting Analyst for the TMT Consulting team based in Boston, MA. Prior to S&P Market Intelligence, David ran competitive intelligence for a supply chain risk management software startup and provided thought leadership and market research for an industrial software provider. Previously, David was an industry analyst in 451 Research’s Internet of Things channel primarily covering the smart transportation and automotive technology markets.