There are always different types of skill sets in high demand for different countries. In this article, job trends and forecasts are discussed.
To confront rising unemployment, matching of skills must be improved. Skills mismatches in the labour market have been a growing concern in most Member States. Due to imperfect information and structural rigidities, workers and businesses are not provided with the right level of skills in the right areas, which damages competitiveness in particular of smaller enterprises. The composition of skills emerging from EU universities and training systems does not fully support a truly innovation-driven economy. The educational and professional choices of young men and women continue to be influenced by traditional gender paths. Reducing gender imbalances in sectors and occupations could partly address future skills shortages, for example in technical and managerial occupations.
The removal of obstacles, including administrative barriers, to the free movement of workers in the EU, as well as more transparent information on labour market trends and skills requirements, would contribute to the promotion of occupational, sector and geographical mobility and allow a better match between peoples' skills and job opportunities. Mobility periods during education and training (e.g. via the Erasmus and Leonardo programmes) help make people more open to mobility later in their working lives. More effective and efficient job search requires enhanced coordination between different policy areas and labour market institutions, notably Public Employment Services and social security systems.
The Commission and the European Pact on Immigration and Asylum highlight that employment and geographical mobility of third-country workers can help reduce skills mismatches, and ensure that their skills can be used at the optimal level. The successful integration of migrants and their descendants is key for EU economies and societies.
The Cedefop analysis suggested that there could be approximately 100 million job openings in EU 25 over the period from 2006 to 2020. In addition to the creation of 19.6 million additional jobs, another 80.4 million replacement jobs could be available as workers retire or leave the labour market.
The slow but steady shift in the sector distribution of EU employment, from agriculture and traditional manufacturing industries towards services, is likely to continue notwithstanding the recent downturn. In 2020, almost three quarters of jobs will be in services.
Job creation in services is likely to be substantial up to 2020, especially in business services. The primary sector could lose 2.9 million jobs while construction should tend to stabilise. Manufacturing would experience a net loss of 800,000 jobs despite an increase in engineering; however, given the impact of a strong replacement demand, there would still be important job openings in manufacturing, which will therefore remain a crucial sector for the EU economies.
With a shorter-time perspective, a more detailed forecast of trends in services can be provided. The best prospects of job creation up to 2015 are expected in business services (such as IT, insurance or consultancy), health care and social work, distribution, personal services, hotels and catering, and to a lesser extent education. The prospects for business services and other sectors may need to be adjusted in the light of the financial crisis.
The transition towards a low-carbon economy will also have an important impact on employment, especially in energy, water and waste treatment, construction, transport, industry, agriculture and forestry. According to the International Labour Organization, the global market for ecological services and products should double and reach 2740 billion dollars in 2020.
Demographic trends will have a major impact on labour supply, although for several years this will be partly compensated by the increase of activity rates. Eurostat estimates that the EU working age population (15-64 years) will peak in 2012 and then start shrinking as the "baby-boom" cohorts retire. As the participation rate of women and of older workers will continue to increase, until 2020 the effective labour force should continue to grow slowly; then the "ageing effect" will outstrip the increase in participation rates, resulting in a slight but continuous decline of total EU labour supply; this will affect Member States in different ways.
Migration flows might compensate for some of the decline in birth rates, but they will not solve the demographic deficit - not least because in the long run immigrant populations tend to acquire the demographic patterns of their country of residence. Qualitative EU labour market mismatches are likely to be exacerbated by quantitative shortages: the matching of skills and labour market needs will be essential for an effective use of human capital.
Several correlated factors will stimulate demand for better and adapted skills: globalisation and increased international trade; the transition towards a low-carbon economy; the application of technologies, especially ICT; and changes in work organisation which are themselves in part a consequence of technological change and skills upgrading.
The next decade will see an increasing demand for a high-qualified and adaptable workforce and more skills-dependent jobs. The general upward trend in skills demand can be illustrated by looking at required levels of education attainment, although these are a very approximated variable for skill levels.
In EU 25, between 2006 and 2020, the proportion of jobs requiring high levels of education attainment should rise from 25.1% to 31.3% of the total; jobs requiring medium qualifications would also increase slightly, from 48.3% to 50.1%. This would amount respectively to 38.8 and 52.4 million high-and medium-level job openings. At the same time, the share of jobs requiring low levels of education attainment would decline from 26.2% to 18.5%, despite 10 million job openings.
Most jobs in non-manual skilled occupations will require highly qualified workers; workers with medium educational attainment will increasingly fill skilled occupations. Since overall education rates increase at a faster rate than labour market changes, only half of elementary jobs will be held by workers with low educational attainment.
In the service sector, there is a clear tendency towards the broadening of the required skills portfolio at all occupational levels, linked to "non-routine" tasks. For example, ICT professionals have to develop skills in marketing or management; services workers have to develop customer orientation skills and digital literacy. In many knowledge-intensive sectors, both managerial skills and scientific knowledge are needed. In social care and education, further skills upgrading is needed to improve the quality of services.
This reflects the growing demand from employers for transversal key competencies, such as problem-solving and analytical skills, self-management and communication skills, linguistic skills, and more generally, "non-routine skills".
Net job creation projections show a polarised job expansion among occupations, with a strong bias in favour of high-skilled jobs. Up to 2020, in EU25 17.7 million additional jobs could be created in high-skilled non-manual occupations such as administrative, marketing, logistics and sales managers, IT systems administrators, teaching professionals and technicians. At the same time, forecasts highlight a low or even negative job creation prospects for some skilled occupations, but also a considerable net creation of elementary jobs (5 million), especially in the service sector – e.g. security staff, domestic helpers, cashiers or cleaning workers.
New technologies and developments in work organisation seem to result in an important job expansion at the ends of the job spectrum (especially at the higher level). New technologies cannot substitute either the "non-routine" tasks typical of high-skilled occupations (e.g. cognitive and communication tasks), or low skilled jobs, especially in the service sector (e.g. care or truck driving). However, medium skilled routine tasks and repetitive work can be replaced by automation and computerization, or outsourced.
Such polarisation is perceptible in some Member States. However, it is not a clearcut phenomenon, and the polarising trend in net job creation should be largely offset by a high replacement demand for middle-skilled workers, though replacement demand will also accentuate the upward trend in skill demand. Such shifts in labour market demand already raise concerns about wage differentiations between jobs. The trend in labour income shares in the EU since 1980 has been clearly upwards for the high skilled, but downwards for the low skilled, while the wages levels of the low and middle skilled tended to converge.
Service sector "low-skilled" jobs increasingly include more demanding non-routine tasks; yet there is still little financial recognition of the new competencies and skills necessary for these jobs in the wage structure. This has also had an impact on gender inequality, since women, especially migrant women, disproportionately hold service sector jobs.
Within Europe as a whole the primary sector and utilities now (2006) only accounts for just under 12 million jobs, down from over 15 million a decade earlier. This broad sector includes agriculture, which remains a significant area of employment in some Member States, although in all cases trends are downwards and further job losses are expected over the next decade. Employment is projected to decrease to 9.6 million by 2015 implying net job losses of almost 2.3 million. The share of this broad sector decreases from 5.7% (in 2006) to 4.3%.
Manufacturing has also seen negative employment trends in the past decade, but still accounts for around 35 million jobs and in many respects lies at the heart of the economies in many parts of Europe. In some countries there are positive employment trends, largely reflecting the restructuring of employment within Europe as some activities have been transferred eastwards from older to newer Member States. There are also a few industries within manufacturing (engineering) where demand for output is outstripping productivity gains thus leading to employment increases, but often employment levels are tending to decline. Construction sector has experienced positive employment trends in the past decade but tends to stagnate between 2006 and 2015. Across Europe as a whole, the projections suggest little change in total employment in the manufacturing and construction sectors between 2006 and 2015 in the benchmark scenario.
Services now account for the vast bulk of employment in Europe and have generally seen positive trends, especially among business and miscellaneous services: (a) distribution, transport, etc., currently accounts for the largest share of employment, although trends in many countries have shown signs of flattening out as these sectors have matured. In total more than 3 million additional jobs are projected across the EU-25+ between 2006 and 2015. Some 2 million of these are in distribution and a further 1.5 million in hotels and catering; (b) industries within the business and miscellaneous services category, which include many services aimed at consumers, have shown the most rapid growth in recent years for most countries and this looks likely to continue. This broad sector is likely to become the largest category. It is projected to grow by around 2% per annum in total over the period 2006- 2015, creating almost 9 million additional jobs in EU-25+ as a whole; (c) non-marketed services, which include education and health as well as public administration is currently the second largest category, although trends here are also showing signs of reaching a plateau in many countries. Across EU-25+ as a whole over 3 million additional jobs are projected in the benchmark scenario between 2006 and 2015.
Underlying these broad trends is a more complex picture of changing fortunes for different industries in different parts of Europe. The analysis provides similar information to that discussed here at the more detailed 16-industry and 41- industry levels. Some results at the 16-industry level are illustrated in Table 1 and in Annex I. Again these highlight the significance of the different industries in terms of numbers of jobs and shares of total employment, as well as changes over time in both proportionate and absolute terms. The declining shares of employment in agriculture and many manufacturing industries is apparent. The construction and distribution sectors have maintained a constant share of total employment but transport has seen its share of employment decline. Hotels and catering has in contrast benefited from the growing demand for its services (from both businesses and consumers) as have other business services and miscellaneous services. Banking and insurance have seen declining employment shares despite rising output levels as technology has reduced the number of jobs in many areas. Public administration has also seen declining shares in contrast to areas such as health and education which although also often provided publicly have seen large increases in demand for the services they provide. At the even more detailed 41-industry level it is possible to identify more subtle changes that reflect the combination of key drivers influencing the patterns of demand for different goods and services and the ways in which these are provided (both in terms of technologies used and the international division of labour).
General trends at the broad sectoral level are broadly similar across most countries, although the significance of the different sectors obviously varies considerably in some cases, with marked contrasts between groups such as: the older Member States (OMS, EU-15); the new Member States; Nordic countries; south European countries and east European countries.
At the broad major group level several trends stand out. Skilled agricultural and fishery workers still accounted for almost 10 million jobs in 1996 but this is declining steadily and by 2015 is likely to be not much more than half that figure. Craft and related workers employed in other activities still account for almost 29 million jobs in 2006, but their numbers are declining as a consequence primarily of declining employment in the manufacturing sector and the impact of new technologies which often substitute machinery for traditional crafts. Clerks are another group where technology (especially ICT) has at last begun to bite. However, despite many apocalyptic projections of the impact of ICT on clerical employment in the late 1970s and early 1990s, job numbers continued to rise until recently. For EU-25+ the numbers of clerks appears to have peaked in 2000 and is now projected to show a steady decline, although even by 2015 well over 22 million people will still be employed in such jobs. Employment of plant and machine operators and assemblers will remain rather stable, at around 17-18 million jobs.
In contrast to these groups many other occupations have shown strong positive employment trends which are expected to be maintained. Technicians, professionals and associate professionals fall into this category, as do managers found in the legislators, senior officials and managers group.
Overall it seems likely that there will be a significant increased demand for skilled workers. However, there are also significant increases in job numbers for less skilled groups including service workers and shop and market sales workers, as well as elementary occupations (for whom the entry education and training requirements are generally low). This seems to confirm some fears that there is a continuing polarisation of the demand for labour, with increased job numbers at both ends of the skill spectrum. This raises some policy concerns about equality and social inclusion, and possible mismatches between skills and requirements.
The European economy needs more highly skilled workers, such as information technology specialists, business managers, and doctors and nurses. But the EU is currently losing the global competition with Australia, Canada and the US to attract such workers. An overwhelming majority of EU immigrants from Africa and Asia are unskilled. In contrast, 50 per cent of migrants to the US from these same regions are highly skilled. The Commission estimates that the EU will need to attract 20 million skilled migrants over the next 20 years to address skill shortages in Europe’s engineering and computer technology sectors.
Commissioner Frattini’s solution is an EU ‘blue card’ – a common working visa – to lure young, highly skilled workers to Europe. Under the scheme, recipients would get a two-year residency in any member-state where they have a job offer. The job must be paid at three times the local minimum wage and be guaranteed for at least one year.
For the migrant, the main benefit of the blue card would be the option to extend their stay after the initial contract and to work anywhere else in the EU. The Commission is not looking for the authority to decide how many workers a member-state should admit. National governments are loth to give this power away. But the Commission would set the criteria for granting a blue card and have the power to guarantee cardholders the same healthcare, tax and pension rights throughout the EU. An EU blue card would send a strong signal to European citizens that the Union can contribute to an effective migration policy. It would also fill an important gap in those countries that have no proper legal migration system of their own.
However, some member-states remain unenthusiastic about the idea. The UK, the most popular destination in Europe for non-EU workers, has just begun to use a separate ‘points system’ to manage legal migration and has therefore opted out. (See Quotas.) So have Ireland and Denmark. Austria worries that the idea is “a centralisation too far”. And most EU member-states, including Germany and France, do not want the Commission to have any say over how they admit immigrants. The prospects for the blue card therefore look bleak, as long as the EU continues to decide labour migration questions by unanimity.
Continuous observance of employment trends in the EU should be undertaken as situations are fluid at any time. The type of jobs that are high in demand today may very well not be come tomorrow.
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