Britain ranked as 18 on the list for its index score, an improvement from 20 last year, with the progress attributed to lower youth unemployment and NEET (neither in employment or education) rates.
While ranked higher than Finland, Hungary and Poland, the UK still significantly trails the top three countries of Switzerland, Iceland and Germany.
PwC chief economist John Hawksworth called the improved index score “encouraging” but said Britain still had issues preventing it from climbing higher.
“The levels of people not in education, employment or training are still too high, relative to top international performers like Germany with better vocational systems,” he said.
There are an estimated 790,000 NEETs aged 16 to 24 in the UK. By reducing this number to match that in Germany the UK could boost GDP by £43bn.
Hawksworth added there was “concern” over regional disparities and said the UK would need to ensure support was continued after Brexit to continue advancing social mobility, jobs, training and education for young people.
Automation was a focal point in the Index, with nearly one in three (28%) of young workers’ jobs in the UK being at risk.
Nearly a quarter of 16 to 24 (24%) year olds in the UK are employed in the wholesale and retail sector, with the risk of automation being 44% compared to 5% in industries requiring science, technology, engineering and mathematics (STEM) skills.
PwC head of technology and investment Jon Andrews said the impact of technology on jobs would be felt more “profoundly” than others, saying education level was a “key differentiator”.
“As new technology advances bring innovation, we need to be careful that the impact of this is progressive and does not create barriers,” said Andrews.
“Businesses have a critical role to play in creating jobs and helping the UK workforce build the skills of the future.”
Hawksworth believed empowering young workers to succeed in an “increasingly automated world” was crucial for the long-term success of the UK economy.
“An increased focus on STEM skills will help close the technology gap with leading international economies and maximise the economic employment benefits of automation.
Last month a separate report predicted that almost a quarter of accountants think a high level of jobs in their organisation will be replaced by robots over the next decade.