This article - first posted on September 13th 2021 - is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.

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In skills, education and training policy around the world, micro-credentials are increasingly being positioned as a solution to a wide range of economic, labour market, and social challenges. Broadly defined, they are stackable, industry-aligned short units of learning designed to help individuals form specific skills and signal those skills to employers. Although micro-credentials were gaining increasing policy traction prior to 2020—in part due to the affordances of digital technologies for effectively delivering short courses online—the economic disruption caused by COVID-19 appears to have catapulted them to the foreground of policy and industry discourse.

In the face of rapidly shifting skills demands driven by COVID-19-related unemployment crises, the transition to net zero, and technological changes, many countries are positioning micro-credentials as the means to meet the shifting needs of employers. These skills-focused courses are highlighted as a cheap, fast, flexible, and accessible way for individuals to up- or re-skill to meet immediate skills gaps and position themselves competitively within challenging labour markets. More than that, micro-credentials are increasingly emphasised as a means of democratising access to and through labour markets, enabling employers to select applicants based on actual skills rather than the signalling power of degrees or institutional prestige.

Consequently, the market is booming and the number of course providers is growing rapidly, from companies such as edX, 2U, Coursera and Credly to new players LinkedIn, Google, and PwC. However, despite policy narratives positioning micro-credentials as some form of skills panacea—meeting employer demands, levelling up the workforce, and providing inclusive pathways to social mobility—the reality increasingly appears more complex and nuanced.

Questionable value

Emerging research suggests that those who take micro-credential courses see variable returns in the labour market. Evidence is mixed over the extent to which they improve employment outcomes or increase salaries, and there is significant variation across occupational levels and sectors. Importantly, there is limited evidence on the long-term impact of micro-credentials on individuals’ labour market outcomes and career trajectories.

In fact, micro-credentials focus on providing individuals with specific skills, tailored to immediate employer demands to fill short-term gaps. These skills, usually technical, often relate to specific companies, tasks, tools, or digital programs and have very limited longevity and little transferability across contexts, roles or tasks. Recent research from SKOPE has highlighted how soft, transferable or meta skills (e.g. communication, critical thinking, teamwork etc.) tend to have the most value for individuals in their long-term careers, while highly specific technical skills have limited shelf life and limited long-term value for individuals. This suggests that the real value of micro-credentials is to employers rather than employees.

Placing responsibility on individuals

Underpinning micro-credentialling is a neoliberal model that places the financial and strategic burden of upskilling and reskilling the workforce, as well as meeting shifting skills demands, firmly onto the individual. While micro-credentials do not preclude employers from paying for courses for their employees, even a peripheral glance at policy rhetoric and marketing materials makes it clear that the model is focused on encouraging individuals to invest in their own skills themselves to become more attractive to employers. In fact, as the market grows, there appears to be an increasing focus on personalised advertising based on algorithmic profiling, further emphasising the individual responsibility of earning these credentials.

This is part of a growing trend that has seen companies gradually diminish investment in training and developing their employees across economies around the world. As such, the rise in micro-credentials at best appears to provide a mechanism by which employers step further away from meaningful investment in skills formation systems. At worst, with more and more companies establishing their own micro-credential courses open to both internal and external candidates, the model provides a mechanism for employers to actually monetise the process of filling their own skills gaps.

A commercial wild west

There can be little doubt that the commercial opportunities of providing micro-credentials are extensive, and the boom in the number of course providers reflects the substantial amounts of money to be made. Although course fees are a critical part of this, there are additional commercial opportunities through associated services such as digital micro-credential wallets and cross-credential validation. However, with course provision now almost entirely online and increasingly tied to different kinds of social media, the real commercial opportunities lie in the monetisation of individualised digital behavioural data linked with courses as well as personalised advertising opportunities embedded in course materials.

With limited regulation or quality bench marking, it seems likely that micro-credentials will become, for a while at least, a new frontier (or perhaps the Wild West) of adult education, as different organisations experiment with exploiting commercial opportunities and competition between them grows. This can only serve to fragment and disrupt skills formation systems and limit long-term strategic planning for skills supply and meaningful economic growth.

Importantly, a lack of regulation and meaningful quality benchmarking will inevitably lead to hidden stratification within the micro-credential market. Employers will place different value on different credentials in ways that may not be apparent to individuals investing in the courses. Research shows that those without the knowledge or cultural capital to navigate the market are likely to invest in training that is not actually valued by employers. On the other hand, more privileged individuals are able to tailor their credentials exactly to employer needs and reap the rewards. This is borne out in research which highlights those most effectively engaging in micro-credentialling already have degrees and good jobs and are essentially stacking micro-credentials onto existing educational and social privileges.

Rather than provide inclusive pathways, micro-credentials have the potential to deepen social inequalities and further entrench the already classed, gendered and racialised nature of work.

Given these growing concerns and the febrile nature of skills policy, there is clearly a need for a more systematic approach to regulation and quality benchmarking of micro-credentials that takes into account the globalised nature of provision. Perhaps more importantly, there is also a need for further research to examine the role micro-credentials play in global skills formation systems that cuts through the hype, unpacking issues of value, skill transferability, economic productivity, commercialisation, hidden stratification, and entrenched social inequalities.

Read the OECD policy brief: "The Potential of Online Learning for Adults: Early Lessons from the COVID-19 Crisis"—a discussion of the potential of online learning to expand the opportunities for adult learning, while addressing some key issues that the crisis has highlighted;

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