Transcript Slide 1

Anticipating changing skill needs:
A Master Class
Bridging the Skills Gap, New Skills Network Seminar
Budapest, 9-10 June 2011
Rob Wilson* and Alena Zukersteinova#
*Professorial Fellow, Institute for Employment Research,
University of Warwick, United Kingdom
#European Centre for the Development of Vocational Training (Cedefop)
Overview
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Context & rationale
Alternative approaches to skills anticipation
What is available and where to find it
Some Key Results
The Sectoral dimension
Implications for education & lifelong learning
Conclusions
Why Forecast ? - The Rationale for
Forecasting in a Market Economy
Rapid change uncertainty & evidence of market failure
Long lead times on investment decisions such as education
and training choices
Need for a regular and systematic assessment of future
prospects to:
 guide & inform policy formation;
 guide & inform individual decision making;
 avoid future imbalances & mismatches;
Anticipation at the centre of the New Skills for New Jobs
agenda BUT THIS IS NOT about top down “manpower” planning
Why Not?
Forecasting is impossible
Forecasting is unnecessary
Forecasts are inaccurate and based on invalid
assumptions
So is systematic anticipation possible?
Nobody can predict the future with certainty
But everybody can prepare or plan for the future
 Government, employers, educational institutions & individuals
Individual actors need to make strategic plans and choices
and invest in the right areas;
To do this involves some element of forecasting: either
implicitly or explicitly - forecasting is inevitable
The only meaningful questions are how, by whom and with
what end in mind?
LMII is a “public good”
Individual plans need to be guided by robust LMII, including
a forward looking element
Regular, comprehensive, systematic, consistent and
transparent projections are a “Public good”
Needs to serve many audiences (stakeholders, social
partners, practitioners and individuals) – not just policy
makers
Anticipation – a key element in 3 “Employment Guidelines”
But higher investment in Anticipation by non-EU countries
Elements in a Forecast & Different
Approaches to Forecasting
How anticipation is carried out –alternative methods
• Strengths & weaknesses
• Problems & pitfalls
What they can and cannot provide
Data, modelling, assumptions and judgement
Forecasting as a “process” rather than an “end” in itself
How to interpret and use forecasts
Alternative approaches
Approach
Advantages
Disadvantages
Formal, national level,
quantitative models based
projections
Comprehensive (typically,
covers all sectors)
Consistent
Transparent and explicit
Quantitative
Direct “user/ customer”
involvement
Easy to set up and carry out
Data hungry
Costly
Not everything is quantifiable
May give a false impression of
precision/ certainty
May be very subjective and
inconsistent
Too much focus on the
marginal and ephemeral
Holistic (considers a broader
range of factors that just
economic)
Direct “use/customer”
involvement
Holistic (for the sector)
Partial (ignores other sectors)
Strong on sectoral & other
specifics
Can be non-systematic
Can be inconsistent
Can be subjective
Surveys of employers, etc,
asking about skill deficiencies &
skill gaps
Focus groups/round tables,
Delphi style methods; Scenario
development
Sectoral/ occupational / regional
studies and /or Observatories
(using both quantitative &
qualitative evidence)
May introduce inconsistency
across sectors
Quantitative Forecasting
and Scenarios
Certainty
Uncertainty
Quantitative Forecasting,
Delphi studies
Scenarios
Elements in Quantitative Forecasts
Multi-sectoral Macroeconomic Model :
 output and employment by industry, etc
Quantitative, econometric models, moderated by qualitative
evidence for Occupations & Qualifications, often using
simpler extrapolative methods where data are weaker
Judgement - All Forecasts are based on assumptions – it is
important they are Explicit & Transparent
Cedefop : Detailed medium term employment projections by:
Sector; Geographical area; Occupation & Qualification including Expansion demands and Replacement needs &;
Supply as well as Demand for skills
BUT NOT detailed, top-down manpower planning
Key messages on
methodology:
Anticipation is carried out in many different ways -no one method
is sufficient by itself - each has strengths & weakness.
Many problems and pitfalls, results may require careful
interpretation & should not be taken literally -indicative of
general trends
Nobody has a crystal ball - the future is not inevitable , but many
trends are robust and can help to inform individual choices
Forecasts need to serve the large range of audiences, including:
stakeholders, social partners, practitioners and individuals –
not just policy makers
Regular, systematic, quantitative, model based forecasts are key
elements
What is available and where
to find it
• Most countries have systems for skills anticipation:
• they vary greatly in levels of sophistication and detail;
• much of this is determined by their existing statistical
infrastructure.
• Shift in the objectives from manpower planning to more
general assessment to inform all labour market participants
• Systems are becoming more sophisticated and complex, and
there is a clear trend to combine methods.
• The case for a pan-European system for skill needs
anticipation is generally accepted and the Cedefop work has
begun to fill this gap.
• More remains to be done - various initiatives underway,
including the EU Skills Panorama.
Some Key Results
• Impact of the crisis & recession
• Sectoral and technological change & implications for
Skills
• Changing Occupational Patterns
• The Demand for and Supply of Formal Qualifications
• Mismatches, Imbalances and Concerns About Overqualification
• Demands for Particular Qualifications and Generic Skills
Macroeconomic Impact of the crisis
Million jobs
245
240
235
230
225
220
No crisis scenario
2010 baseline
2011 baseline
215
210
205
2000
2005
2010
2015
2020
2025
Million jobs
Changing sectoral shares (EU29)
250
200
21.7 %
23.3 %
22.9 %
Non-marketed services
150
100
19.2 %
Business & other services
Distribution & transport
24.9 %
26.7 %
25.8 %
Construction
6.9 %
50
18.2 %
9.1 %
0
2000
24.2 %
22.1 %
2005
7.0 %
7.0 %
15.3 %
14.1 %
6.4 %
5.1 %
2010
2015
2020
Manufacturing
Primary sector & utilities
Slow, but significant and
inexorable change
2020 - 10 (2011 baseline)
2020 - 10 (2010 baseline)
2000 - 10 (historical data)
All industries
Primary sector & utilities
Manufacturing
Construction
Distribution & transport
Business & other services
Non-marketed services
-6
-4
-2
0
2
4
6
8
10
12
Million jobs
Significant structural change by Occupation
too - But few big surprises (EU29)
Total Requirement
Replacement Demand
Net Change
Legislators, senior officials and managers
Professionals
Technicians and associate professionals
Clerks
Service, shop and market sales workers
Skilled agricultural and fishery workers
Craft and related trades workers
Plant and machine operators and assemblers
Elementary occupations
-5
0
5
10
15
Million jobs
Knowledge- and skills-intensive jobs on the
increase (EU29)
Elementary occupations
Plant and machine operators
and assemblers
Legislators, senior officials and
managers
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
% of total employment
Professionals
Technicians and associate
professionals
2020
2010
2000
Craft and related trades
workers
Skilled agricultural and fishery
workers
Clerks
Service workers and shop and
market sales workers
And also by qualifications held (EU29)
Total requirements
Replacement demand
Expansion demand
High qualification
Medium qualification
Low qualification
-20
-10
0
10
20
30
40
Million jobs
60.0
50.0
…… a greater
% share of
jobs for the
better
qualified
(EU29)
40.0
30.0
20.0
10.0
0.0
2000
2005
Low
2010
Medium
2015
High
2020
Driven in no small part by supply side
trends (EU29)
Milions
Low
Medium
High
300
250
200
21 %
28 %
34 %
50 %
50 %
22 %
16 %
150
48 %
100
50
31 %
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Comparison of supply and demand trends Problematic! Imbalances not easy to measure
millions
140
120
100
80
60
40
20
Low (Labour Force)
Medium (Labour Force)
High (Labour Force)
Low (Demand)
Medium (Demand)
High (Demand)
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Increasing diversity, imbalances,
mismatches & risks of over qualification
Increasing diversity of Higher & Further Education (HE)
HE no longer a “minority sport” (participation rates >>50%)
Demand for skills: crisis has accelerated changes
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Fewer job opportunities for the low-qualified (but some growth)
Some better qualified may need to accept lower level jobs
Science, Technology, Engineering & Mathematics is a key area
But Quality more important than Quantity
Skills mismatches and imbalances are a persistent
phenomenon, we need to develop the right skill mix to:
 manage transitions & adjustments in the labour market
 match & anticipate knowledge- & skills-intensive jobs
Links between Education and
Economic success
Skills (& education) matter – strong correlations between
education and individual pay & employment ( as well as
broader social benefits)
But hard to prove cause & effect
 Investment does not guarantee a return – need to invest in the
right areas
And it is not just about boosting the supply of skills
 Rising demand for skills cannot be taken as given - employers
& individuals need stimulation & encouragement to “raise their
game” and to aim higher, in order to ensure that the demand
for skills rises commensurately with supply” (European
Commission, European Employment Strategy).
 Need for stronger industrial policies - But hard to pick winners
& cannot plan everything from the top down
On the right track…progress towards
Lisbon targets
Europe is on track to raise its qualifications profile
 more Europeans acquiring better qualifications
 fewer low-qualified Europeans
 younger cohorts the best qualified ever
Rising supply mirrors projected growth in demand
BUT Concerns about over- qualification & mismatch:
 High level qualifications may no longer guarantee success
 Results suggest some polarisation in skills demand - many
graduates may need to find jobs in non-traditional areas
 Looking beyond formal qualifications – need “T-shaped”
individuals with general as well as specific core technical
skills
But there is no room for complacency
Rest of the world is not standing still – BRIC countries also
trying to increase their share of high-level jobs
Significant impact of the crisis & not out the woods yet!
Young people especially hard hit & vulnerable
Key uncertainties:
 Can & will supply trends be maintained?
 Will demand grow fast enough & provide good quality jobs for all?
 Will the skills provided match labour market requirements?
 May need industrial policy to boost demand as well as supply
Skills anticipation can provide pointers not definitive
answers - the prime function of such activity should be
seen as helping individuals & organisations to make more
informed choices
The Sectoral dimension
• Sectors at the heart of changing skill needs;
• Active involvement by employers is essential;
 Sector Skills Councils, Sector
observatories, etc)
• DG Empl Sectoral Studies:
 limitations in terms of coverage
 many useful insights
 complements the Cedefop projections
 considerable scope for further
harmonisation and interaction
Implications for Education & LLL
Transferring & implementing results into policy & practice a
challenge
Obstacles: lack of accurate & robust data, & need for better
methodologies as well as broader & deeper stakeholder
involvement
Policy makers still loath to “let go” & want to plan “top down”
Integrating changing skill needs into LLL requires a more
proactive approach, anticipating rather than just reacting
Work-based learning can help to bridge gap between world of
education, training & work & develop competence-based
qualifications.
Stakeholders are a valuable source of information, especially for
qualitative data;
ESCO should contribute to better synergy between employment
and education and training policy & links between forecasts
and provision.
Conclusions
Not a crystal ball - art as much as a science
Skill projections – a key element in helping to make markets
work better and informing individual choices:
 Focus for debate, virtuous circles, intervention and outcomes
 Valuable information for both policy makers and individuals
 Ongoing process – not the end – just the beginning!
Projections show one possible future -it is not inevitable:
 The future is not predetermined
 May be able to take actions to improve things
 Need to challenge employers & individuals to aim higher
It is important to develop better, more detailed, data
 Europe still has some way to go
 Sectoral focus is key
 Not just about IET but also LLL
Contact details for further
information:
Rob Wilson
Institute for Employment Research, University of Warwick
[email protected]
Cedefop Pan-European projections:
www.cedefop.europa.eu/skillsnet