Recently, Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') in conjunction with LeadLeo Research Institute and Shanghai Foreign Service (Group) Co., Ltd., jointly released the 'Insights into China's Skills Training Industry for 2025' report. Wang Xiaojing, Partner and Managing Director of Frost & Sullivan Greater China, Xia Haiquan, Deputy Secretary of the Party Committee, Chairman of the Trade Union, and Dean of the Human Resources Research Institute of Shanghai Foreign Service (Group) Co., Ltd., attended the release ceremony.
Left: Wang Xiaojing, Partner and Managing Director of Frost & Sullivan Greater China Region
Right: Xia Haiquan, Deputy Secretary of the Party Committee, Chairman of the Labor Union, and Dean of the Human Resources Research Institute of Shanghai WaiFu (Group) Co., Ltd.
The report points out that driven by multiple forces such as industrial upgrading, technological transformation, and economic restructuring, China's skills training industry is moving from 'scale expansion' to a new stage of 'structural optimization and quality improvement'. Policies continue to promote the deepening of 'integration of industry and training', reconstruct the training model empowered by technology, elevate the role of human resources service institutions, and jointly drive the supply system for skilled talents towards a direction of 'job orientation, data-driven, and ecological collaboration'. It is expected that by 2029, the market scale of skills training in China will exceed 2 trillion yuan, becoming an important engine supporting industrial upgrading and high-quality employment.
PART.
01
China's skills training policy system has been comprehensively upgraded, constructing a new pattern of integration of industry and training and lifelong growth.
In recent years, the state has intensively introduced policies to promote the sinking of training resources, the implementation of corporate main responsibilities, and the construction of standardized governance systems. With the 'Skills Illuminate the Future' initiative at its core, an integrated model of 'position requirements - training - evaluation - employment' has been established to strengthen employment orientation and the effectiveness of training. At the same time, the skills competition system continues to expand, becoming an important channel connecting training, evaluation, and professional title advancement. It promotes the formation of a closed loop for skills talent cultivation, certification, and employment, contributing to high-quality employment and industrial upgrading.
Annual Skills Competition Event Statistics
Source: Frost & Sullivan analysis, LeadLeo research institute
PART.
02
AI-driven industrial transformation is accelerating, and the reconstruction of the skill supply system has become a key support.
China's policy system is moving from 'Digital China' to 'Artificial Intelligence+', forming a new development pattern that 'drives industrial upgrading with AI and supports industrial implementation with skills'. The upgrading of industrial structure drives the rapid iteration of skill demands for positions, with high-skilled and composite talents becoming the core shortcoming. Currently, the labor market exhibits the characteristics of 'total supply matching but structural mismatch', with an oversupply of traditional industries and a shortage of high-end talents in emerging sectors. The unemployment rate among young skilled talents is relatively high, reflecting a disconnection between education and training and industrial demand. In the future, it is necessary to strengthen the precise match between skill supply and industrial demand through the integration of industry and training and a job-oriented training system, to support the development of new quality productivity.
The current training is centered on technology empowerment and institutional innovation, forming a development pattern characterized by digitization, standardization, and systematization. New technologies such as AI and VR are accelerating their application, driving training from 'tool assistance' to 'full-chain reconstruction'.
China's industrial upgrading demand for skilled talents, 2024
Source: Frost & Sullivan analysis, LeadLeo research institute
Key changes in industry innovation of skills training in China
Source: Frost & Sullivan analysis, LeadLeo research institute
PART.
03
Shanghai is building a talent highland with global competitiveness, advancing through policy-driven initiatives, functional leadership, and industrial collaboration.
Shanghai is reshaping its high-level talent system and industrial structure through systematic policies and functional layout. The policy system, represented by intellectual property internationalization, the "Pearl Program," youth talent support, postdoctoral subsidies, etc., is promoting the accelerated gathering of high-level, internationalized, and youthful talents. The construction of the "Five Centers" drives industrial restructuring through functional leadership, forming a multi-dimensional linkage pattern of science and technology, finance, trade, shipping, and innovation, supporting the leapfrog development of the three leading industries: artificial intelligence, integrated circuits, and biomedicine. At the same time, human resource service institutions are transforming from intermediaries to talent allocation hubs, becoming the core platform connecting policies, industries, and the talent ecosystem, helping Shanghai form a globally competitive talent highland.
The supporting role of human resources enterprises in skills training, 2022-2024
Source: Frost & Sullivan analysis, LeadLeo research institute
PART.
04
The Chinese skills training market is expanding rapidly, with digitalization and regional industrial differentiation driving structural upgrading.
From 2020 to 2029, the Chinese skills training market maintained rapid growth, expanding rapidly from about 200 billion yuan in 2020 to 850 billion yuan in 2024. It is expected to exceed 2 trillion yuan in 2029, with an average annual compound growth rate of about 19%. The driving forces for growth come from policy promotion, the emergence of new occupations due to industrial upgrading, and the demand for skills investment caused by the mismatch between population and job positions. The market structure shows characteristics of 'digital convergence in training needs and regional industrial differentiation.' The eastern economic belt dominates, with rapid growth in training for industries such as information technology and healthcare. At the same time, manufacturing training is moving towards intelligent manufacturing and digital transformation. Training institutions need to focus on national information technology courses as a main line, while also constructing differentiated courses in combination with regional characteristic industries to achieve integration of industry and training and efficient employment.
China's Skill Training Market Size, 2020 - 2029
Source: Frost & Sullivan analysis, LeadLeo research institute
PART.
05
China's manufacturing-training integration value chain is being reshaped towards an ecological transformation led by enterprises and coordinated by multiple parties.
The value chain of integrated industry-training in China is evolving from a government-led linear supply model towards an ecological networked model led by enterprises, coordinated by multiple parties, and driven by data, achieving precise alignment between skill training and industrial needs. The government has shifted from a policy driver to a platform architect and ecological manager, training institutions and human resources service agencies have upgraded to precision and integrated service operators, and enterprises have changed from demanders to coordinators and technology providers. Technology empowerment and data-driven approaches have become the core engines, realizing personalized training and full lifecycle management. However, long investment payback cycles for enterprises, misalignment between courses and job requirements, fragmented local coordination, and insufficient evaluation of training effectiveness still constrain the value loop, requiring systematic reconstruction to support efficient integration of industry-training.
Analysis of Pain Points in the Implementation of Industry-Training Integration in China
Source: Frost & Sullivan analysis, LeadLeo research institute
PART.
06
The HR service enterprise has been upgraded to become a core hub integrating industry training, creating a data-driven and ecological closed-loop platform.
Human resource service enterprises are upgrading from traditional employment service providers to core collaborators in industrial ecosystems in the integration of production and training. Leveraging insights into job needs, talent data accumulation, and multi-party collaboration advantages, enterprises can build a data-driven 'training-assessment-certification-job' closed loop, achieving precise course development, job matching, and competency certification. By integrating government, educational institutions, training institutions, and enterprise resources, strengthening the construction of 'dual-qualified' faculty, integrating soft and hard skills training, and connecting with international certifications, an ecological operation platform is formed. Empowered by digital and AI technologies, training efficiency, employment conversion rates, and industrial adaptability have been significantly improved, making human resource enterprises strategic hubs for skill supply, talent development, and industry standard co-construction.
Analysis of Human Resource Service Enterprise Capability Matrix
Source: Frost & Sullivan analysis, LeadLeo research institute
PART.
07
The key to integrating production training lies in constructing a closed-loop system driven by 'job demand and operated by professional institutions', achieving full-linkage from skill cultivation to employment transformation.
In the future, China's skills training will rely on AI, big data, and immersive technologies to achieve precision, practical operation, and full-cycle capability building from 'one-size-fits-all' to 'individualized training for each individual'. Human resources service institutions play a central hub role in this process. By using job profiles, capability models, and talent big data, they transform the real needs of enterprises into trainable, evaluable, and deployable capability units, realizing the linkage between training, evaluation, and job placement. At the same time, institutions rely on regional collaboration and digital platforms to integrate resources, promote the structuring and replicability of the training supply system, and improve training effectiveness through data-driven evaluation and incentive mechanisms, providing support for industrial upgrading, labor transformation, and high-quality employment.
Future Prospects of Human Resources Service Enterprises in the Integration of Production and Training
Source: Frost & Sullivan analysis, LeadLeo research institute
