A Closer Look

Labour market and skills intelligence (LMSI) – How labour markets are developing and, consequently, how jobs, skills and learning needs are changing

Things change. It would be helpful to know how the labour market will be transformed by technology, climate change and demography. Individuals would benefit greatly from knowing what type of education and training to follow; enterprises would know the skills they need; and policy-makers could adapt education and training systems to new skill needs.

Labour market and skills intelligence (LMSI), that provides information on current and future labour market trends and skill needs can help people, enterprises and policy-makers make informed decisions. Appreciation of LMSI’s usefulness is growing. It is a European Union (EU) policy priority, as outlined in the European Commission’s New skills agenda for Europe and a global one in the 2017 update of UNESCO’s Shanghai Consensus. But collecting, analysing and using LMSI in policy-making must be based on processes, supported by government authorities, embraced and enriched by stakeholder input and commitment.

For Cedefop, skills anticipation and matching is the process of producing and building on available LMSI to achieve a better balance between skill supply and demand, to promote economic development through targeted skills investments by individuals, countries, regions, sectors or enterprises. Skills anticipation is not manpower planning: it does not try to predict how many plumbers we will need in 2025. Skills anticipation examines how labour markets are developing and, consequently, how jobs, skills and learning needs are changing. It is not a crystal ball and makes no claim to being able to predict skills evolution with any certainty, but skills anticipation can signal current and possible future skill mismatches and inform decisions on how to address them.

Effective skills anticipation

The extent to which skills anticipation findings can influence individuals’ and policy-makers’ decisions, depends on establishing effective skills governance.

Skills governance matters; many diverse policies can be affected by skills anticipation outcomes and many different stakeholders involved. Each Member State’s traditions, practices and administrative structure shape its approach to skills governance. For example, the regional element is strong in Belgium and Denmark; others, such as Bulgaria, Ireland, Greece and Cyprus have more centralised approaches. Labour and/or education ministries often take or share the lead in skills anticipation activities; public employment services also frequently have a key role. The leading authority strongly shapes the focus, policy priorities and even the time frames (short-, medium- or long-term) of skills anticipation.

No single governance model can ensure the effectiveness of skills anticipation as a policy tool, but some principles can help coordinate actors and target groups and processes. These include:

 clear policy aims;
 use and ownership of results by all stakeholders;
 dissemination to ensure wide-ranging impact;
 sustainable financing.

Members States generally see improving alignment of skill supply and demand to reduce skill mismatches as an aim of their skills anticipation approaches. In the UK, for example, skills anticipation is part of a policy goal to create a market-like system for training and skills. Employers and learners use information to decide on the skills they need. These decisions are translated into demand, which the market meets through improved supply.

Comprehensive skill strategies that integrate skills anticipation can help exploit its potential. Strategies can be national, such as Ireland’s National skills strategy 2025, or regional, such as the Strategie 2025 for Brussels in Belgium. But integrating the various components of skill formation, such as education and training (including higher education), qualifications and accreditation, active labour market policies and
guidance, into an overall strategy is not easy; such broader strategies are lacking across the EU.

Stakeholder roles differ significantly across Member States, ranging from systematic and active participation in all stages of design, collection and use of skills anticipation outputs to a consultative role or just receiving the results.

Where social partnership is well-established, trade unions and employer associations usually have an integral role. Other key stakeholders are VET providers and sector organisations; experts usually have a consultative rather than decision-making role. Social partners are closely involved in Luxembourg, which has a strong tradition of concertation sociale. Hungary also involves social partners in discussions on skill needs, but employers tend to be the most influential stakeholder group. Member States such as Denmark, Germany, Spain, France, Luxembourg, the Netherlands, Poland, Finland, and Sweden are characterised by wide stakeholder involvement, including enterprises, employer organisations, trade unions and sectoral bodies, using various collaboration models. For example, in Ireland the expert group on future skill needs operates under a social partnership model. In contrast, in the UK, stakeholders are co-opted on an ad hoc basis to various skills anticipation initiatives.

Formal participation in skills anticipation does not guarantee a meaningful contribution: the degree of involvement and ownership determines the quality of stakeholder engagement. In Germany there are concerns that the many skills anticipation methods pose coordination problems. But cooperation between the many stakeholders remains strong; they accept that interests vary and, importantly, use the findings in policy-making. Ensuring stakeholder coordination and consensus is at the core of Luxembourg’s approach. In Portugal, stakeholders help develop strategic objectives for skills anticipation. In the Czech Republic, stakeholder involvement is ad hoc and indirect; 29 sector councils have been set up to encourage participation in decision-making on labour market issues, including skills anticipation.

Effective skills anticipation depends on dissemination of outputs. Use of skills anticipation data and intelligence by others, and not just the commissioning agency, is important. Most Member States disseminate skills anticipation results to a broad audience through mass media outlets including reports, journals, websites, TV, newspapers, seminars and other events. Ireland, Lithuania and Luxembourg, for example, have web-based skills portals. The UK’s LMI for all online data portal makes data freely available through a programming interface for use in websites and applications.

Chosen excerpts by Job Market Monitor. Read the whole story at Briefing note – Skills anticipation: looking to the future | Cedefop

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