Bridging the Skills Gap in the Era of Smart Technology: The Role of Digital Upskilling, Organisational Learning, and Artificial Intelligence in Workforce Readiness

The rapid spread of Artificial Intelligence (AI), Industry 4.0 technologies, and cloud-based automation has widened the gap between employees’ current skills and the competencies organizations now need. Based on theories like Human Capital Theory, the Technology Acceptance Model, Dynamic Capabilities Theory, the Resource-Based View, and Organizational Learning Theory, this study presents and tests an integrated model that connects digital upskilling, AI implementation, organizational learning culture, and leadership support to workforce readiness and organizational performance, with employee adaptability serving as a mediator. Using a quantitative, cross-sectional design, data were collected from 432 employees across sectors such as IT, manufacturing, healthcare, banking, education, and telecommunications in India, through stratified random sampling. Measurement quality was checked via exploratory and confirmatory factor analysis, and hypotheses were tested with structural equation modeling (SEM) in AMOS, including bootstrapped mediation analysis. Findings suggest that digital upskilling, AI adoption, and a learning culture each significantly influence workforce readiness; leadership support significantly impacts employee adaptability; and employee adaptability partially mediates the relationship between digital upskilling and workforce readiness. Workforce readiness, in turn, predicts organizational performance and partly mediates the link between AI adoption and performance. The model shows good fit (CFI = .971, RMSEA = .049). This research offers a comprehensive, theory-based framework for understanding digital workforce transformation and provides practical insights for HR managers, business leaders, and policymakers aiming to bridge the digital skills gap.