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Europe – Skills gap threatening economic recovery

06 January 2014

After a five-year economic crisis, the mismatch of skills is one of the  most acute problems facing many European countries. Hundreds of thousands of people who were made redundant, and many young people entering the workforce, are finding that their skills are ill suited to a huge crop of innovation-based jobs springing up across the continent, reports the New York Times.

Glenda Quintini, a senior labour economist at the Organisation for Economic Cooperation and Development (OECD), commented: “In all countries, there is an expectation that many of the new jobs created will be in the knowledge-intensive economy. But we are seeing a worrisome skills mismatch that means a large number of unemployed people are not well prepared for the pool of jobs opening up.”

Employers have long complained that graduates do not have the skills they need, but the 2013 Global Skills report from the International Labour Organisation (ILO) warned that “skills mismatches and occupational shifts have worsened” in Europe in the wake of the crisis. People made redundant in hard-hit sectors; such as construction and finance, face lengthy retraining, while too few graduates entering the job market have chosen engineering, science, or technology degrees for the growing innovation-based jobs market.

The gap in Europe has important consequences for the recovery, as the Eurozone grapples with unemployment rates stuck stubbornly above 12%. According to the European Commission: “It may hold back a return to meaningful growth and generate significant economic and social costs.”

The ILO warned that the gap might contribute to extended spells of unemployment and might reduce the effectiveness of policy interventions to stimulate growth.

A study released in November by Eurofound, the research arm of the European Union, showed that despite the recession, almost 40% of companies reported difficulty in finding workers with the right skills, compared with 37% in 2008 and 35% in 2005.

The problem is especially striking for innovation-based companies, which are generating jobs at a rapid pace as technology spreads through every sector of the economy. By 2015, about 900,000 information and communications technology vacancies may go unfilled in the European Union, the European Commission warned in a recent report on the digital economy. The gap “is of major concern to European competitiveness” and to the economy as a whole, the commission said.

Governments and companies around Europe are fast-tracking efforts to retrain the unemployed for a burst of technology-related jobs. They are also stepping up campaigns to lure university students to mathematics, engineering and science in place of popular courses in the humanities and social sciences.

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