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New Skills for New Jobs: Anticipating and matching labour market and skills needs

European Commission - MEMO/08/791   16/12/2008

Other available languages: FR

MEMO/08/791

Brussels, 16 December 2008

New Skills for New Jobs: Anticipating and matching labour market and skills needs

What is 'New Skills for New Jobs'?

As requested by the European Council, the Communication on New Skills for New Jobs presents a first assessment of the EU’s future skills and jobs requirements up to 2020. The unexpected nature of the current crisis clearly shows the limits of any economic forecasting exercise but forecasts can serve to indicate general trends.

The two objectives of this initiative are to help ensure a better match between skills and labour market needs and to improve the Member States' capacity to assess and anticipate the skills needs of its citizens and companies.

What does it mean in practice?

The New Skills for New Jobs strategy is composed of four strands.

  • It will improve the monitoring of short-term trends on the European labour market and develop several tools and services to promote job guidance and mobility and to address skills mismatches.
  • It will also help to develop better information on skills needs in the EU in the medium and long-term, with regularly updated projections of future labour market trends and analysis of skills needs by sector, taking into account business needs and the employment impact of the transition towards a low-carbon economy.
  • It will improve our understanding of global challenges related to skills and jobs through cooperation with third countries (notably US, China, Canada, India) and international organisations (OECD and ILO).
  • It will help Member States, regions and others involved in skill upgrading and matching by mobilising existing Community policies (such as the strategic framework for cooperation in education and training) and European funds in line with these objectives.

Why is action needed at EU level?

Member States are mainly responsible for education and employment policies. However a Europe-wide perspective can provide a more complete assessment of the situation, and results which can be compared to better understand common trends. The EU can also raise awareness of the importance of skills and matching as long-term strategic objectives. Finally, well-established EU funds such as the European Social Fund are important instruments to support the objectives of the initiative at national and in particular regional level.

Why should skills upgrading and matching be a priority? Why launch this in an economic downturn?

Across Europe, technological change, globalisation, ageing populations, urbanisation and the evolution of social structures are accelerating changes in labour markets and in skills requirements. Upgrading skills is critically important for Europe's future growth and productivity, its capacity to adapt to change, and for equity and social cohesion – the low skilled are more vulnerable in the labour market and can be hit first by the crisis. It is the also best way to exploit new opportunities for sustainable job creation, such as the shift to a low-carbon economy and the development of new technologies. But upgrading education and skills levels alone is not enough, as skills gaps and mismatches are a common concern in Member States: ensuring a better match between the supply of skills and labour market demand is as important.

As underlined in the European Economic Recovery Plan, improving the monitoring and matching of skills is necessary both in the short and the long-term:

  • To address the employment impact of the crisis, facilitate matching with existing vacancies and help people return to the labour market;
  • To make sure that European labour markets anticipate future needs, to improve the long-term job prospects of the EU workforce and to exploit opportunities for growth and jobs.

How many jobs will be created in the future and in which sectors?

19.6 million additional jobs are expected to be created between 2006 and 2020 in the EU-25 (according to projections from CEDEFOP), while 80 million jobs would become available as workers retire or leave the labour market.

The gradual shift in Europe away from the primary sector and traditional manufacturing industries towards services and the knowledge-intensive economy is likely to continue. According to recent studies, by the year 2020, almost three quarters of jobs in the EU-25 are likely to be in services.

A focus on net job creation by occupation shows that there will be many jobs created in high-skilled occupations, but also significant job creation in low-skilled jobs in the service sector. In the service sector, strong positive trends 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.
Past and future trends in employment levels in the service sector, in millions[ Figures and graphics available in PDF and WORD PROCESSED ]

In addition, efforts to tackle climate change and environmental degradation are expected to create a new ‘green economy’, with millions of new jobs across the world. The market for environmental products and services is projected to double by 2020. The shift to a low-carbon economy could benefit Europe, which already has a leading position in some of the technologies required for renewable energy. Environmental concerns also mean people will need to develop new competences in more traditional sectors (agriculture, transport, construction).

What sort of qualifications and skills will be needed?

In general, higher education levels will be required from the working population, as more and more jobs will require high and medium education levels.

First, there will be a need for higher and broader sets of skills across different levels of occupation. Across sectors, generic skills such as problem-solving and analytical skills, self-management and communication skills, ability to work in a team, linguistic skills and digital competences are more and more valued on the labour market. Second, a general rise in educational attainment levels implies that employers will adapt recruitment criteria and that a growing share of low-skilled jobs will be filled by workers with a medium level of qualification.

Why does the initiative focus so much on "skills"?

Skills refer to the ability to apply knowledge and use know-how to complete tasks and solve problems. They can be accumulated throughout working life, not only through formal education and training but also through informal training and work-related experience. Unlike traditional qualifications, the concept of skills focuses on learning outcomes (rather than years of studies, for example).

Evaluating employers' needs in terms of overall levels of educational attainment of the workforce is not sufficient, as we can see from the problem of highly educated workers employed in low-skilled jobs coupled with wider shortages of skilled workers in the labour market. Every job requires a mix of knowledge, skills and abilities, including "generic" skills such as communication and problem-solving skills.

What about the role of social partners and business?

European social dialogue is a key instrument for mobilising social partners to invest in the right skills through education and lifelong learning. The Commission will invite social partners to develop joint initiatives to promote skills forecasting and upgrading, and to accompany short-term restructuring. The Commission will also consult with social partners at the sectoral level.

The Commission will discuss with stakeholders, notably the existing sectoral social dialogue committees, the possibility of establishing "sector councils on employment and skills" at EU level, which will enable representatives on both sides to organise collective discussions, where consensual positions can be reached.

It will also be vital for businesses to invest in human capital and improve their human resource management. Businesses are also best placed to assess their own skills needs, especially in a short-term perspective. Awareness and involvement of businesses in forecasting skills needs will be reinforced under the initiative, through a survey of employers and qualitative studies on the skills needs of businesses, notably SMEs. There will be a dialogue between business and universities to take into account employers' expectations of university students and graduates.

What are the next steps of New Skills for New Jobs?

In 2009, the Commission will continue to work on common approaches, standards and methodologies and promote cooperation between Member States and other actors involved, in particular by setting up an expert group to support the initiative and activities with international organisations and third countries.

More detailed results will be also published next year. In particular, in 2009, CEDEFOP – the EU's vocational education and training agency – will publish a complementary study providing projections of skill supply which help to identity skill mismatches and shortages. In May 2009, a comprehensive series of skills needs in 16 sectors will be presented at a series of conferences in Member States.


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