Tuesday, 23 June 2009

Shaping the future: skills forecasts as a tool for policy-making

Cedefop’s forecasts on the demand (2008) and supply (2009) of skills are intended to provide information on trends. This year’s study focused on which skills people will be offering in the next ten years.
Matching skills and jobs: anticipating needs in challenging times was the first Agora conference that made use of Internet live streaming. The recorded videos of the main speeches and discussions are available online now.

Skills are where employment and education meet. Apart from the skill needs project which includes the forecasts, Cedefop is working on several related issues, such as the recognition and validation of non-formal and informal learning; lifelong guidance; and on tools such as the European Qualifications Framework and the European Credit System for VET, among others.

Cedefop’s Agora conferences aim, among other things, to bring the worlds of education and employment closer together – a requirement for integrated and successful policy-making.
Link to the recorded conference videosTo discuss the results of the new Cedefop publication "Future skill supply in Europe: Medium-term forecast up to 2020: synthesis report"1 and how they relate to the Commission’s initiative, New Skills for New Jobs2, Cedefop recently held a conference, in cooperation with the European Commission, entitled: Matching skills and jobs: anticipating needs in challenging times3 . The aim of the conference was not just to disseminate the results of the skills supply study, but also to debate how to best identify skill mismatches, how to achieve the most appropriate partnerships between education and employers, and generally to draw attention to the implications of the forecasting exercises for policy-making in several related social fields.

The main conclusion was clear: EU-wide forecasts, despite their inevitable shortcomings (which are mainly due to unequal data collection) are a boon to policy-makers. But they need to be complemented by more qualitative and sector-based research. In fact, Cedefop is already working on several such projects, such as on anticipating skill needs in specific sectors, employer surveys, etc.

The important thing, however, is not the trends themselves, but how to manage them – or, to put it differently, how to manage risk. Once researchers have forecast the future, policy-makers must decide what to do about it.

As it turned out, the conference was a good illustration of how ostensibly ‘dry’ and technical macroeconomic forecasts can lead to heated debate – and how they can be quoted to support competing arguments for policy-making.

After Lisbon: the policy challenges ahead

Lisbon is almost over. With only one year to go, there is general agreement that the process has served a useful purpose in pointing Europe in the right direction. Despite the considerable progress achieved, however, the main Lisbon goal has not been reached. The heady ambitions of 2000, when the world economy was still in the glow of the dot-com boom, did not lead Europe to become the “most competitive knowledge-based economy in the world’ – to create and attract the world’s most innovative companies.

Europe is now plunged into an economic crisis which requires ever closer cooperation between all our countries, precisely under circumstances that conspire to make everyone put narrow national or regional interests first. Meanwhile, the time bomb of demographic decline is putting age groups in competition for the same jobs. European policy-makers will need to make some difficult choices, especially as the crisis has placed public financing under severe strain. So what should policy-makers be paying attention to?

1. What’s maternity leave got to do with the skills supply?

One of the major findings of the Cedefop’s skills supply forecast concerns the rising qualifications of women4 . In 2020, more women will have higher degrees than men, as younger women increasingly get higher qualifications. This means that the still considerable gender imbalances of the EU labour market must be corrected if the skills and talents of women are not to be wasted.

More generally, labour market policies in Europe must dovetail with social policies that allow more women into the workforce. This means, primarily, better childcare provisions in private and public sectors, better opportunities for career breaks, and more fathers’ rights. The demographic and economic data shows that the rising participation of women in the labour market is as important for the future European economy as a higher participation of older age groups.

2. What the green economy means for skills

The greening of the economy means not just jobs for the environmental sector itself. As in the IT revolution, the real impact will be on jobs that will have to adopt a new modus operandi to take a lower-carbon economy into account. This will affect all qualification levels, and must now be taken into account in curricula across many sectors. Innovation is not entirely related to the environment sector, but certainly this sector will generate much innovation and creativity in the next few years. Generic skills – communication, problem-solving, entrepreneurship – may be the key to a better match between skills and jobs and to better integrating the environmental revolution – much as they were boosted by the IT revolution.

Here too, the current downturn is playing a role: companies see efficiency (including in energy use) and innovation as strategies to weather the crisis. Policy-makers have a very significant role to play in developing environmental skills. Regulation and legislation - whether for cleaning operations, preventative measures, green infrastructure, carbon footprinting or research and development - are major drivers of the low-carbon economy.

3. Polarisation: natural development or social choice?

One phenomenon that has been observed over decades runs counter to the continued provision of more medium-level skills and qualifications, which was established by the skill supply forecast: the polarisation of the job market. According to one argument, technological and organisational change has been largely responsible for falling jobs in the middle wage/skill level. Jobs at both ends of the spectrum (measured by wage, not skill level) have one thing in common: they involve non-routine tasks.

But this is only part of the story. Designating providers of non-routine social services such as cleaning, childcare and care of older people “low-skilled” and paying them little is not an inevitable development but a choice our society is making. Many low-paid service workers, especially migrants, do have qualifications, but these remain unrecognised in the present system. Furthermore, their tasks are important enough to warrant more training and higher status. This too is an issue that policy-makers should tackle, in the interests of upskilling, social cohesion and equity.

4. Partnerships, a user’s guide

The New Skills for New Jobs initiative, among other recent policy papers, urges closer and more cohesive partnerships between the education and employment worlds. In the past two months, both the European Commission and the Council have encouraged universities to work more closely with business5. Similarly, there was consensus among conference participants that partnerships between business and all levels of education, particular vocational education, are of vital importance if we are to better match people with jobs. But as usual, the devil is in the details: how exactly should this work? How involved should the social partners be in, for instance, establishing curricula?

There are encouraging signs of cooperation between universities and enterprises, which mostly take the form of student placements and career mediation. There have also been projects focusing on developing entrepreneurship, which is not yet defined as a generic skill or included in curricula.

Nevertheless, we have some way to go before the prevailing mentality changes. In some countries, at least, universities need to stop thinking that working closely with business is a form of intellectual compromise. In such cases, it is well to recall that the reduction of public investment caused by the crisis is here to stay. Schools, businesses and individuals will need to work together to finance the workforce Europe needs.

5. The overeducation debate

The frequent references to overeducation sparked controversy. Many among the audience objected that that it is not possible to be overeducated, even though the term is used quite freely by many economists. It is, however, possible – even likely, in today’s economy – to be overqualified or overskilled: that is to say, to do a job that does not require the formal qualifications one possesses, or what is worse, according to some research, to have skills that are not used at work, for extended periods in one’s career.

But could it be that a too-highly qualified workforce is actually a good thing? Is having just the ‘right” skills for available jobs too limited? Does ‘overeducation’, far from being a problem, actually contribute to a more innovative economy?

Several participants objected to this idea: formal qualifications, they argued, are not what make people innovative or creative. To claim otherwise may be simply a matter of social bias in favour of professions that require university degrees. But equally importantly, higher qualifications do not come free. They represent an investment of time and funds – public and private – which, for maximum social impact should achieve the highest possible returns. This is what matching skills and jobs is all about.

Perhaps what we need to look at is not only formal qualifications, but most importantly, the content of the qualifications and skills people have. To borrow a phrase from the New Skills for New Jobs communication, the “composition of skills” that the European education and training systems produce should be conducive to an innovation-based economy.

In any case, the future of the labour market depends on the ability of the education system to respond to new needs. And that, in turn, will depend on the availability and skills of the teachers and trainers themselves – of whom, in some countries, there is even today a considerable shortage.


Information received from Cedefop
European Centre for the Development of Vocational Training, established in 1975 (2), is a European agency that helps promote and develop vocational education and training in the European Union (EU). It is the EU's reference centre for vocational education and training.