European skills index (ESI) – Four groups of Member States

Skill systems are an important component of country competitiveness and, in aggregate, of the European Union (EU) as a whole. Several key principles of the European pillar of social rights are built around a well-functioning and inclusive labour market with education, training and lifelong learning at the heart. At the same time, the New skills agenda for Europe lists a set of actions aimed at improving skills systems through better skills formation, greater visibility, and more informed career choices. But, until now, there was no single measure to assess and compare how well EU skills systems perform. Nor are there any easy answers to the question of how they can be made more effective. To fill this gap, Cedefop has developed the European skills index (ESI), a composite indicator measuring the effectiveness of Member States’ skills systems.

The comparison of scores across the two dimensions (e.g. skills formation and skills matching) enables initial observations in which four groups can be identified.

The first group consists of Member States that show good performance in both dimensions, such as Sweden and Finland. Such countries can be considered as ‘role models’ of overall skills systems and where good practices can be sought.

The second group comprises countries where skills are efficiently developed and activated but poorly matched, as in the Netherlands and the UK. The skills systems of these countries are characterised by ‘bottlenecks’ where adequate policies in developing and activating skills are constricted at the interaction between demand and supply. Specific policies to reduce skills mismatch would be necessary in these cases.

A third group includes countries where matching is high but development and activation score low, as with Romania and Bulgaria. These systems are rewarded by efficient labour market matching and can possibly be used as good cases of matching practices; however,given the low scores in skills formation, they can provide a signal of ‘low skills equilibrium’, where efficient matching is an outcome of poor demand for high skills.

The final group is that of countries where scores are low in both dimensions, such as Cyprus and Portugal. This can be described as a ‘hotchpotch’ situation where better coordination is needed for both skills formation and skills matching.

Chosen excerpts by Job Market Monitor. Read the whole story at Skillset and match (Cedefop’s magazine promoting learning for work) – January 2019 issue 15