Potential Barriers to Employment Following Expected Changes – Green & Digital Markets
Climate change and technological development have significantly changed the way we live and work, and their effects have also been felt in the labour market. New professions that require a fresh set of skills are beginning to emerge. It is in this context that green and digital skills are proving to be essential.
The aforementioned changes, further accelerated by the COVID-19 pandemic, have contributed to a skills mismatch within the labour market. This results in higher costs for individuals, enterprises, economies and societies, while simultaneously contributing to unemployment, lower returns on investments in training, lost investment and less job creation opportunities. Currently, 77% of companies in the EU are experiencing difficulties in finding workers who possess the necessary skills, while only 37% of adults undertake training regularly [i].
In order to balance the skills mismatch, there is a significant need to reskill and upskill the existing workforce. This need has been recognised on a European level as well as on an international level. The European Commission, European Council and European Parliament all recognise the importance of empowering the workforce through skills and lifelong learning which need to be addressed systematically [ii]. In this respect, new education and training programmes need to be designed and implemented. To achieve this, it is necessary to have a good understanding of the skill demand which can be identified by developing qualitative and quantitative methods specifically for this purpose. Identifying and providing the right skills for new, existing, and forthcoming jobs can smoothen the transition to greener and digital economies. Anticipating skill needs, therefore, is becoming even more critical.
The Challenges of Digital Transformation
Apart from the positive effects and opportunities that digitalisation carries, it also has a negative side. Some of its negative effects are related to income, job insecurity, work intensification, and the deterioration of mental well-being. For instance, digital labour platforms provide new sources of jobs and income but raise challenges for workers' protection, representation and fair treatment[iii].
The digital transformation implies disruptive changes to business models across industries, which alter the nature of work and the skills young people need to effectively enter the labour market. While young people are typically labelled as ‘digital natives’, the majority of them may not possess adequate job-relevant digital skills. According to the 2018 International Computer and Information Literacy Study (ICILS), approximately 34% of students across Member States were rated as underachieving in digital skills. Among those students, significant differences were observed based on gender, socio-economic, and migrant or Roma background[iv]. Furthermore, in most countries, the education systems do not adequately prepare youth for work in the digital economy. School curriculums often do not include digital literacy training and there are considerable differences in students’ digital skills. As a result, it is even more difficult for young people, especially those with socio-economically disadvantaged backgrounds, to learn digital skills and engage with technology beneficially via formal means.
Moreover, vocational training is more likely to lead to employment in jobs that are at risk of automation, which means that current vocational training programmes need to be modernised to help young trainees adapt to the changing demands of the digital economy.
NEETs and Dual Transition
NEETs rates across the EU are generally lower among those with a higher level of education[v]. This indicates that the majority of NEETs tend to have a lower level of education which, in turn, excludes them from the pool of the most appropriate employees in the digital sector especially when paired with a lower level of digital skills.
Another potential barrier in the sphere of digital jobs stems from the very nature of the digital economy. The digital market tends to develop fast and to concentrate that development within the clusters at the technological frontier, breaking away and leaving many behind. In this context and insofar, public policies and institutions have been slow to adjust to the unfolding transformations. This, in turn, can result in a slow response to the changes and inadequate modification of the existing education programmes, leading to outdated curricula and failing relevant programmes offered to the unemployed, including the NEETs.
The green economy, although often complementary to the digital one, presents a different set of challenges altogether. The terminology is still vague and the ‘dry’ data is hard to extract. When considering the numbers related to the employment rates available in the Croatian Employment Service (CES) database, we can see that the sectors with the highest demand and the biggest potential for the green transition lack a qualified workforce and rely on imported foreign workers, thus offering little opportunity for NEETs’ inclusion.
To illustrate the situation, we can consider the construction sector where we can see the high demand for workers, all of which can be ‘green’ or transitional, but in reality, are still not yet fully green. The situation within this sector in Croatia is problematic as the Croatian educational system produces fewer and less qualified construction workers, while the demand on the labour market dictates the import of foreign workforce. As a result, the NEET population within the sector is shrinking, which also means the pool of potential candidates for green education and consequent employment becomes smaller.
To summarise, the three recognised barriers or potential threats to the employment of NEETs within the dual transition are: prioritisation of formal and higher education in the digital sector, unwillingness of the unemployed to enrol in the offered education programmes, and a slow reaction to the rapidly changing digital sector by the providers and creators of educational programmes.
Overcoming the Obstacles
In order to bridge the gap between labour supply and demand within the labour market in the digital and green economy, CES launched vouchers for education in digital and green programmes in April 2022, as a part of a larger ongoing lifelong learning initiative. Education vouchers represent a financial instrument for the allocation of public funds for adult learning. It promotes a flexible and tailor-made model as users independently choose the programme and the education provider from the available programmes and skills catalogue. The application is submitted through an online platform[vi]. Vouchers can be awarded to both unemployed and employed persons over the age of 15 to obtain skills needed for career development, employment or job retention.
Vouchers for digital education proved very popular (86% out of almost 14,000 submissions relate to digital skills), but mostly among the employed population. This led to the digital programmes vouchers for the employed being vetoed on 13 February 2023, leaving them now available only to the unemployed. This underscores the worrying fact that the unemployed are less inclined to enrol in the voucher system, including the very popular digital programmes.
A lack of interest in green education programmes provided by the voucher system presents another problem within green employability, illustrating the vagueness of the term itself, as well as employment opportunities within the green sector. CES is still undertaking considerable efforts to engage more unemployed with the green programmes offered through the voucher system in order to meet the indicator values laid down in the National recovery and resilience plan.
Another goal is to increase the number of vulnerable group users, since these make up only 10.2% of all voucher users at the moment, with only 6.5% of them being NEETs. To achieve this goal, better promotion of the programme is necessary, as is introducing new activities for attracting and including NEETs and other vulnerable groups.
CONCLUSION
In conclusion, the digital and green transitions have a profound effect on the labour market, especially when it comes to specific groups such as young NEETs. To make these transitions easier for them, it is necessary to adjust multiple fields such as education and training. These efforts are already in place across the EU and are continuously modified and adapted to accommodate the needs of the labour force and future workers. However, further efforts need to be taken to reach and motivate the most disadvantaged groups, along with young NEETs, to help make them an essential part of the ever-changing labour market.
Article written by Jakov Butković, Head of Project Preparation, Monitoring and Implementation Division, at HZZ (Hrvatski zavod za zapošljavanje), the Croatian Employment Service.
References:
[i]https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/european-year-skills-2023_en
[ii]https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/642385/IPOL_BRI(2020)642385_EN.pdf
[iii] Digitalisation and Decent Work for All | UNCTAD
[iv] EUR-Lex - 52023DC0206 - EN - EUR-Lex (europa.eu)
[v] Statistics on young people neither in employment nor in education or training - Statistics Explained (europa.eu)
