Latin America Leads Global Skills Shortage: OECD

Latin America and the Caribbean are the regions most affected by a shortage of skilled workers, creating significant performance challenges for businesses, particularly in advanced manufacturing sectors such as automotive, according to the OECD’s Latin American Economic Outlook 2025.

The report says that companies in the region are 13 times more likely to experience performance issues related to a lack of workforce skills compared to those in East Asia. “Latin America and the Caribbean is the region most affected globally by companies struggling with a lack of skills,” says the OECD.

This skills gap varies across industries, but advanced manufacturing has been identified as one of the hardest hit. The OECD highlights that the probability of performance difficulties in the automotive sector is 160% higher than in other manufacturing areas. The organization describes advanced manufacturing as critical to transforming production in Latin America and the Caribbean.

In Mexico, 15.7% of the employed population, about 9.5 million people, works in manufacturing, making it the second-largest employment sector, according to the National Survey of Occupation and Employment (ENOE). However, four out of five advanced manufacturing companies in Latin America report difficulties in finding qualified talent, especially in digital, technical, and managerial skills, according to data from the World Economic Forum cited in the OECD report.

The OECD also notes that traditional educational credentials are no longer sufficient to meet evolving industry needs. “As industries evolve and the nature of work changes, traditional educational credentials may be insufficient to fully reflect a person’s skills,” the organization says. It emphasized the need for workers to complement formal education with additional training and practical experience.

The report cites Chile’s mining industry as an example: while demand is growing for roles in process automation, remote operations, and data analysis, many academic programs still focus on extraction and geology rather than mechatronics, the Internet of Things, or data science. A similar gap exists in the agri-food sector, where new demands for biotechnology and food chemistry skills contrast with training still anchored in traditional agronomy.

The OECD suggests that addressing the shortage requires greater investment in education and training, including international cooperation and foreign direct investment (FDI). Between 2014 and 2024, the region received US$2 billion in new FDI projects related to education and skills training, with funds directed toward creating technical schools, vocational training centers, and international training hubs. Mexico captured 42% of that investment, followed by Colombia with 31% and Brazil with 8%. Most of the capital came from the European Union and Latin American investors.

In Mexico, the skills gap continues to widen. According to ManpowerGroup’s Talent Shortage 2025 report, 70% of employers report difficulties finding suitable talent, up from 68% in 2024. The sectors most affected are transportation, logistics, and automotive (80%), followed by information technology (77%), finance and real estate (76%), and energy (73%).

To address these challenges, the Mexican government recently launched the Public Center for Artificial Intelligence Training, aiming to equip students with digital skills through the SaberesMx platform. The initiative is part of the Special Program for Productivity and Competitiveness 2025–2030, which promotes technical education and workforce reskilling to align with the country’s growing digital economy.