Systems for identification skill needs in OECD-countries – Experiences of project work

Christoph Hilbert

Systems, institutional frameworks and processes for early identification of skill needs - International conference

25th-26th November 2004, Dublin, Ireland

2

Why analysing skill needs? Market failure through wrong

qualifications Effects of market failure through low

or wrong qualification

> Decrease of production quality

> Decrease of growth

> Decrease in wage level

…but policy failures can also be a problem

> Misapplication of results as deterministic planning tool

> Transmission of responsibility for decisions to the scientist

> Enhancing transparency on labour market and human capital development and on future skill needs … but how???

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Why analysing skill needs? Efficiency and demographic aspects

> Not only expensive and sometimes inefficient, but also difficult to implement in full extend

> Future challenge is to handle: 1: Growing need for (high) qualification2: Regionally specified3: Under the restriction of a shrinking work force

> Alternative: qualify in the ‘right’ way, through transparency – planning in a deterministic way neither possible nor desirable

> Due to this: question how to qualify in the right way

> Widespread consensus about the key role of human capital to achieve stable employment patterns in the information society

> Calling for higher qualification level is one possibility

BUT

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Even if the EU meets its target of having an employment rate of 70% by 2010 – about which there is already doubt - the fall in the working age population over the subsequent 20 years will result in a sharp overall decline in the volume of employment

Empl

oym

ent l

evel

Facing up to a shrinking and ageing workforce – real facts about future development

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Finland: innovative approaches – but without sustainable structure> With the joining of the EU In 1995 an extensive program by the ESF started

(Project-based Anticipation System)

> 174 projects, different in regional and methodical aspects have been funded

> Target definition and coordination only in a rudimental way

> Maxim was to find different way in an environment as free as possible

> Can be defined as a pure Bottom-up-approach

> Innovative and promising approaches have been developed and tested

The system did not hold beyond the pilot phase:

> After the phase-out of the ESF-program there was no stable network and for this, the different projects have been downsized or stopped

> From a today‘s view the initiative can be seen as collapsed in the sense of installing a continuous system for the identification of skill needs.

BUT

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Switzerland – the 'other' country in Europe

> Economically and politically outstanding role as economy Europe> In the 90's, innovative labour market and education policy reforms in fast reaction to

changing environment

1. Co-operations on an inter-cantonal level in Eastern Switzerland (AROSA) and in the Roman Swiss (ORTE)Target: through a scientific approach, information on regional labour markets are collected and the actual and future skill need is tried to be anticipated. Target group is are the Regional and cantonal employment offices.

> In skill forecasting 2 important developments:

2. Pilot project for a CD-Rom-based integrated information system Potential target groups are experts in:Labour market and education offices, career consulting, unions and organizations, schools, labour market, occupational research

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Differentiated information system on occupational employment expectations and skill needs

Modul 1

Modul 2 Education and apprenticeship expectations, short-term

Modul 4 Demand-oriented simulations

Modul 5 Supply-oriented simulations

Modul 6 New occupations, qualifications and skills

Modul 7 Data export

Modul 3 Trends and long-term developments

Occupational employment expectations, short-term

Demand-oriented simulations

Main Characteritics: Information for all qualification levelsApprenticeship and occupations are the main classification groupNot a new development of methods and forecasts but a collection of existing work

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Framework for more transparency in the market for skills

INFORMATION SYSTEM

Qualitative analysesMicro-models Sector-specific analyses Skills and professionsB

otto

m-u

p

-Change of skill needs within professions

- change in the operational processes

Quantitative analysesStandardized methods

National and regional macro models (quantitative, 3-5 years)

National scenarios (long-term, population, trends in the labour market)

-Aggregate development, structural changes, demographic factors

-Importance of professions and activities

Top-

dow

n

Measurement planning

Personal planning

Vocational guidance

Support of individual decisions in first- and further trainingW

orks

hops

/ D

iscu

ssio

nsbe

twee

n pl

ayer

s

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Conclusion: Three main consequences for the importance of skill needs in Europe

Labour market information is a public good and can be interpreted as a tool for quality assurance. Today, the use of results in most European countries is rather fragmented (Regional economic development, PES, decision makers, branches, …) – and not evaluated in their results due to implementation

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For definition of information unit regions are often more useful than countries… So why European perspective?

- Learning methods- Identify (regional specific or general) trends- Improve and harmonize user-friendly presentation and

publication

2

Analysing skill needs (quantitative and qualitative) is an important instrument to avoid market failure:

- More transparency - Improve matching

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DK – Sweden – Norway: No integrated system but proper information on different levels

> Various actors engaged in the forecasting labour market developments > PES main actor in identification short-term needs and characteristics of mismatches> Efforts primarily carried out on the regional and/or local levels> Central tools:

Comprehensive company surveys Ongoing regular contacts with the surrounding societyInformation obtained is essential to adjust focus of labour market training

> In all three countries: models to project medium and long-term supply by education groups and demand by branch

> Common feature: they offer thought-provoking mismatch scenarios rather than genuine prognoses of the most probable labour market outcome

> Projections employed to regulate the education and training dimensions, primarily within higher education

> Medium- and long-term analyses useful for individuals deciding on their career paths

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Qualitative vs. quantitative analyses – a question of target

DEGREE OF DETAILS / REGIONALIZATION

BE

NE

FIT

CO

ST

S

Quantitative(Top-down)

Qualitative(Bottom-up)

REPRESENTATIVITY

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Employment rates and full-time equivalents (% population aged 15-64)

60,6 61,2 61,9 62,4 62,8 62,8 62,9

61,2 60,3 60,7 61,4 62,5 63,4 64,1 64,3 64,4

56,2 57,2 58,1 58,7 58,9 58,6

0

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1992 1996 1997 1998 1999 2000 2001 2002 20030

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employment rate EU25 EU15 FTE EU15 Lisbon target 2010

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Employment rates and full-time equivalents 2003

(% pop. aged 15-64)

0

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IT GR BEES LU FR DE IE PT FI ATUK SE NLDK EU25

EU15

EU25

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EU15

1999

PLBGMTHUROSK LT LV SI EE CZCY

employment rate 2003 FTE Lisbon target 2010 Lisbon target 2010