EU 2020: Why skills are key for Europe’s future

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

“As longevity and access to education improve around the globe, Europe can no longer count on a large lead in scientific know-how, education and innovation to give us an automatic edge on the rest of the world,” writes Paul Hofheinz, president of the Lisbon Council, in a December paper.

“Today, some would argue that Europe is in an ostrich-like stance, preferring to hide from threats rather than devise ambitious and forward-looking strategies for overcoming them. Why is the public debate still dominated by fear-driven, retroactive arguments that do so little to lay the groundwork for changes which most political leaders and social scientists know will be necessary? 

Skills and human capital agenda – as proposed by President Barroso in his Political Guidelines for the Next European Commission – are very important. Put simply, we need a pro-active, high-profile agenda that answers the social and economic challenges we face in clear and clearly-definable terms.

Education at a Glance 2009, the OECD’s flagship publication on education systems in the world’s most-developed countries, was released in September 2009, and is a veritable gold mine of interesting research on the link between educational attainment and prosperity. And the findings are very clear: investment in education pays – always – both for the individual and for society at large. 

At its heart, the problem is a simple one: Europe’s wage structure prices low-skilled workers out of the market, leading to unacceptably high unemployment rates among the low skilled and lack of opportunities presented to this vulnerable societal group. 

To be sure, Europe was and is a leader in world-class education. And it is important to note that our educational standards and attainment rates have not decreased. What has decreased is our relative standing in the world. 

The challenge in Europe is two-fold: 

1) Financing: first and foremost, we invest too little in education at all levels – primary, secondary and tertiary. The important thing is that there be adequate investment in education. The source of that investment – public or private – is less important. 

2) Limited opportunities for life-long learning: on skills and lifelong learning, our record is not much better. Going forward, we have to find better ways not just to invest in our universities, but also to provide more training for the low skilled. One way would be to incentivise or require businesses to invest more in the skills of their workers 

The question still arises: if we are to invest more in skills, what are the skills we need? Skills-matching is a useful exercise, which, among other things, has pointed to a persistent gap developing in Europe around the supply of suitable graduates available for the advanced problem-solving jobs that already form the basis of our advanced industrial economy. 

The outcome is a rise in jobs that require ‘complex communication’ and ‘expert thinking’, while demand for workers who could perform ‘routine cognitive’, ‘routine manual’ and ‘non-routine manual’ tasks has declined as much as 8% in some cases. 

Political leaders must deliver on four things if they are to devise and implement a successful human capital strategy for their country: create it, attract it, keep it and activate it. The interesting aspect about these four deliverables is that, for a society to succeed, it must be successful in all four areas.

European leaders have three principal levers through which they can lead a better, improved policy debate on human capital policy. As with the four deliverables described above, the three levers must all be applied to ensure success. The three levers are: pressure, persuasion and incentives. 

The new European Commission is in a position to make a substantive and timely difference in this debate. Specifically, by setting skills and human capital as a policy priority of the EU 2020 agenda, which will replace the Lisbon Strategy in spring 2010, it can create a vibrant platform where reform and modernisation will come more easily. 

Specifically this means the following: encourage the European Council to devote one of its annual meetings exclusively to the Skills and Human Capital Agenda […]; develop new targets and indicators […]; initiate better, more systematic dialogue with a broader array of stakeholders; and kick off a grassroots awareness campaign on the importance of skills.” 

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