Beyond literacy: Why language skills matter in an AI-driven economy

AS THE Philippines advances discussions around the National Education Plan 2026-2035, there is growing attention on strengthening foundational learning, particularly literacy, to address long-standing education gaps and better prepare students for the future.

This focus is both timely and necessary. Foundational skills are the bedrock of learning, shaping how students absorb knowledge, think critically, and progress through the education system.

At the same time, as workplaces evolve rapidly with the integration of artificial intelligence (AI), an important question is emerging: how do these foundational skills translate into real-world capabilities that support employability and economic participation? New global employer insights from the recently launched Toeic Global English Skills Report by Educational Testing Service (ETS) suggest that language, especially the ability to operate confidently in English alongside national and local languages, is becoming an increasingly important part of that equation.

STRONG COMMUNICATION The evolving demands of the global economy highlight the need to view language skills through a broader lens, not only as a foundation for learning. AI-GENERATED GRAPHICS

From foundational literacy to workforce capability

Strengthening literacy has rightly become a central priority in education reform. The ability to read, write, and comprehend effectively forms the basis for all further learning.

However, in today’s interconnected economy, literacy is no longer only about comprehension; it is also about communication across contexts.

According to the report launched in March, employers across 17 countries increasingly view English language proficiency as a capability linked not just to communication, but to productivity, collaboration, and overall business performance. In fact, 90 percent of employers say English proficiency is critical to organizational success, while 92 percent say it is more important today than it was five years ago. These insights reflect a much broader shift in the global economic landscape: language skills are not simply academic outcomes, but practical tools that shape how individuals participate in the workforce and how businesses function in an increasingly globalized world.

Language in AI-driven workplace

Just a few decades ago, AI was something encountered in science fiction, not in everyday use. Today, its use is growing in almost every industry; there is simply no escape from the realities and opportunities of AI.

Many AI-powered tools, digital platforms, and professional resources operate primarily in English. From navigating software interfaces to interpreting technical documentation and crafting effective prompts, employees are increasingly expected to engage with content in English as part of their daily work.

The Toeic Global English Skills Report reinforces this trend. Eighty-one percent of employers say integrating AI tools is increasing the need for English proficiency, while nine in 10 say English skills are necessary to effectively use AI interfaces, generate prompts, and evaluate outputs.

At the same time, AI is not seen as a substitute for these skills. About six in 10 employers say AI cannot compensate for a lack of fundamental English proficiency, underscoring that technology is amplifying — rather than replacing — the need for strong communication capabilities.

In this context, language becomes more than just a means of communication; instead, it becomes a gateway to accessing technology, participating in digital ecosystems, and fully utilizing tools that drive productivity and innovation.

From insight to action– a workforce perspective

As the Philippines continues to strengthen its education system, these insights point to the importance of connecting foundational learning with long-term workforce readiness. It is not about diminishing the role of Filipino and the mother tongue, but rather developing additional language skills, especially in English, that can expand access to global knowledge, opportunities, and networks. This is particularly evident in sectors such as IT-BPO, global services, and tourism, which rely heavily on effective communication across borders. As these industries increasingly adopt AI-enabled tools and serve international markets, the ability to operate confidently in English becomes closely linked to service quality, productivity, and career mobility.

For policymakers, this means ensuring that language education supports both strong early literacy and the gradual development of skills that enable students to engage with global content and technologies over time.

For employers, it underscores the need to invest in continuous learning, including language skills development, as part of broader workforce upskilling efforts in an AI-driven economy.

In practice, 78 percent of employers report using English assessments in recruitment, 71 percent for pre-training evaluation, and 66 percent for promotion readiness. Many organizations are also increasingly adopting more structured approaches to assessing and developing communication skills. This is where language assessments such as Toeic are increasingly used by employers globally to benchmark English proficiency in workplace contexts. As a case in point, such frameworks allow companies to better understand existing skill levels, identify gaps, and design targeted development pathways that support both individual growth and organizational performance. Together, this provides employees by helping to align training programs with real-world communication demands.

Thriving in a global, AI-driven economy

As education reforms move forward, strengthening foundational learning will remain a critical priority.

At the same time, the evolving demands of the global economy highlight the need to view language skills through a broader lens, not only as a foundation for learning but also as a core workforce capability that supports employability, adaptability, and long-term career growth.

In an AI-driven world, the ability to navigate both local and global contexts will matter more than ever. Supporting learners in developing strong literacy alongside practical communication skills can help ensure that they are not only prepared to learn, but also ready to participate, contribute, and thrive in the future workforce.

Ratnesh Jha is the general manager of institutional language products at Educational Testing Service, a nonprofit organization that designs, administers, and scores standardized tests used for education, employment, and certification worldwide.