Globally demographic shifts have impacted both supply and demand for skills with the expansion of the working-age population continuing at a rapid pace in some regions such as South Asia but decelerating or even contracting in other regions such as the EU. It is estimated that in 2022, Italy was the European country with the largest share of the elderly population, with 23.8 percent of the total population aged 65 years and older. Portugal, Finland, and Greece were the countries with the next highest shares of elderly people in their population, while the European Union on average had 21 percent of the population being elderly[i].

PWC’s 26th Annual Global CEO Survey in May 2023 found that more than half of the 4,410 chief executives surveyed believe that labour and skills shortages will significantly impact profitability in their industry over the next 10 years. The World Economic Forum’s latest Future of Jobs Report 2023 reports  that organizations across all industries identify skills gaps and an inability to attract talent as the key barriers preventing industry transformation [ii]

Meeting EU's skills shortage

Today, South Asia is home to the largest number of young people in any global region, with nearly half of its population of 1.9 billion below the age of 24. In most South Asian countries the projected proportion of children and youth completing secondary education and learning basic secondary skills is expected to be more than double by 2030. [iii]

The other accompanying factors affecting the labour markets apart from demographic trends are advancing digital technologies, automation, and changes in labour market institutions, which have increased the precariousness of work. Against this backdrop, businesses increasingly report that the limited availability of skills poses an impediment to investment. In January 2023 a survey by the German Chambers of Commerce and Industry (DIHK) reported that more than half of 22,000 companies surveyed had difficulty in hiring people. The situation was more difficult for technical businesses: two-thirds of groups in the electrical equipment, mechanical engineering, and carmaking industries could not fill vacancies. [iv]

Job trends in the past two decades have been towards a transition to service activities that engage more educated workers and a shift away from more routine and manual work toward jobs that are non-routine and inter-personal (like many service-sector jobs) or jobs that are non-routine and analytical. With certain country exceptions, manual occupations, such as in agriculture and construction sectors, are declining across the EU.  For many decades, demand has been steadily rising for high-skilled workers, those who can perform non-routine cognitive work that is not easily replaceable by machines, which includes both professional and technical positions complementary to Information &Communication Technology (ICT)and automation. The most common trend observed in Europe has been described as  de-routinization, which is increasing the demand for jobs at the top of the professional and wage ladder and decreasing demand for middle-skilled jobs.[v]

A new Eurobarometer survey,(which is a collection of cross-country public opinion surveys conducted regularly on behalf of EU institutions since 1974 )done between September to October 2023  finds that skills shortages are one of the most serious problems for Small and Medium-sized Enterprises (SMEs) in the EU. The challenge of skills shortages has grown over the years and now includes all EU Member States and all sectors of the economy. Businesses around the world including the EU are becoming increasingly aware that upskilling their workforce is their best option to mitigate the retention risk of skilled labor.[vi]

Information and Communication Technology (ICT) has emerged as one of the top five occupations in the EU with a mismatch between labour demand and supply. Every two in five companies in the EU is claiming to have difficulties in recruiting people with the required skills (CEDEFOP 2017). India, on the other hand, maintains the highest rank in terms of global sourcing country for IT talent. [vii]

At the same time many industries, such as publishing and professional services, are becoming increasingly project-oriented. Growth in all these sectors is leading to greater demand for project management skills, creating even more job openings in project management employment ( ). According to an analysis of U.S. Bureau of Labor Statistics data, the largest and fastest PMOE growth will be in software development—a projected increase of 14% between 2019 and 2030. Much of this growth will come from the development of mobile applications, IT security, and a rise in healthcare technology. Occupations in project management and business operations will also see a steady increase over the next ten years, despite a pandemic-related The growth rate of PMOE within projectized industries is expected to be higher than for overall employment in these industries. This indicates a higher demand for positions and qualified people to fill them. The share of GDP increase due to productivity improvement in projectized industries is projected to be greatest in Europe, China, and North America. For regions with a lower GDP to sustain growth, higher levels of productivity held up by PMOE will be vital to their future The rate of workforce expansion in PMOE due to economic growth in developing countries including,  South Asia, opens up a number of opportunities for the next generation of talent with young population under the age of 35 years..[viii]

The problem of the skills gap continues to affect the EU green agenda according to a European Parliament Policy Study. Labour shortages across important sectors in the green transition doubled from 2015 to 2021. The EU’s solar strategy has recognised that there are already skill gaps, and industry actors fear of an “unprecedented skills shortage”: Estimates show that more than 500,000 additional workers will be needed by 2030. Spain’s solar industry is currently unable to implement more projects, despite government assistance, due to workforce shortages. In Germany, 60 percent of electrical contractors have vacancies, and a shortage of over 200,000 skilled workers has been identified. France will require at least 100,000 more workers by 2030 to meet building renovation targets. Swedish solar installation companies will need nearly 30,000 more workers over the next five years. Internal upskilling and reskilling will be important, but these are insufficient. [ix]

Skilling South Asian youth

The EU therefore will need to depend on other regions to bridge the manpower gap and  South Asia could be an important source, but global partnerships in skilling will need to happen in a big way. One possible intervention could come from the UN institutions in the form of strengthening global partnerships for the mutual benefit of developed and developing worlds given the demographic, livelihood, and skilling challenges that exist in them.  In 2010, the ILO developed, at the request of G20 leaders, the G20 Training Strategy and has since been helping several countries with its implementation. While primary responsibility for education, pre-employment training and training for the unemployed lies with national governments,  new forms of partnerships and cooperation modalities provide opportunities for both national governments and the ILO to leverage its  Decent Work Agenda and the 2030 Agenda.  Such partnerships include cooperation with other international organizations, development agencies of Member States, international financial institutions, regional unions of Member States and private entities, as foreseen by the ILO Declaration on Social Justice for a Fair Globalization and the Resolution on Advancing Social Justice through Decent Work. Negotiated framework agreements signed by the ILO with other intergovernmental organizations facilitate strategic partnerships at global, regional and country levels. 

The ILO is an active member of several inter-agency networks on skills development, and lifelong learning, and as such strategically engages with other international and regional agencies such as the European Centre for the Development of Vocational Training, the European Training Foundation, the FAO, IOM, the International Telecommunication Union, OECD, UNESCO, the United Nations Environment Programme, UNDP, the Office of the United Nations High Commissioner for Refugees (UNHCR), the United Nations Children’s Fund (UNICEF), the United Nations Industrial Development Organization. The ILO’s major multilateral and bilateral partners on skills and lifelong learning include the African Development Bank (AfDB), Australia, Belgium (Government of Flanders), Canada, China, Colombia, the EU, FAO, France, Germany, Italy, Japan, the Netherlands, Norway, the Republic of Korea, the Russian Federation, Sweden, Switzerland, UNDP, UNICEF, the United Kingdom and the United States. [x]

UNESCO has a  Global Skills Academy that leverages strategic partnerships and mobilizes over 230 Technical and Vocational Education and Training (TVET) institutions across 150 countries through its network. The mission connects individual learners, institutions, and governments to a wide range of training programs offered by UNESCO’s Global Education Coalition partners to support youth and adults in their journeys to developing essential skills and competencies for improved employability and resilience. It was set up the background of more than 1/5 of the global population aged 15-34 globally remain disengaged from education, employment, or training [ Moreover, with the rapid technological, economic, and societal transformations happening worldwide, it is crucial for young people to acquire the necessary skills to navigate these challenges effectively and fulfill their potential. To address this issue, the Global Skills Academy supports learners in developing critical  21st Century skills including digital, entrepreneurial, and green skills. It provides various training opportunities for skilling, upskilling, and reskilling that are tailored to the fast-evolving labor market[xi].

The UN  Sustainable Development Goals(SDGs)-SDG 4 underlines the role of skills generation for work, entrepreneurship, employment, livelihoods and development by involving the private sector which has a crucial role to play both in the design and delivery of skills development. The engagement of private sector actors is also necessary to enhance market-relevant employability skills of students and trainees, especially disadvantaged groups like youth and women. In turn, the business community gains access to a highly skilled workforce that significantly improves competitiveness and productivity. [xii]

A time has come for the EU  to resolve its problems of skill shortage and skill mismatch. A more active involvement in supporting the global multilateral and bilateral skill partnership missions and recruiting skilled manpower from South Asia is called for. The global skill partnership programmes endeavor to train the youth to meet the global skill challenges and hence need the support of the EU nations.

(The writer is a retired special secretary of India's labour ministry. Views are personal. He can be reached at ppmitra56@gmail.com)

[i]   McEvov Olan,June 21, 2023,https://www.statista.com/statistics/1105835/share-of-elderly-population-in-europe-by-country/

[ii] https://www.weforum.org/agenda/2023/05/adopting-a-skills-first-approach-help-people-better-jobs/

[iii]The 2030 Skills Scorecard

Bridging business, education, and the future of work

South Asia Edition.Global Business Coalition for Education and Education Commission London2022, https://gbc-education.org/wp-content/uploads/sites/2/2022/03/GBC-Education-2030-Skills-Scorecard-South-Asia-Edition.pdf

[iv] Technology and the Skills Shortage

Financial Times ,May 18.2023,https://www.ft.com/content/b1b710a1-6d12-43e5-8508-ae4584a7289a

[v] Change and Other Drivers of Skill Demand and Supply are shaping Europe’s Labor Market , 2019,The World Bank Group https://thedocs.worldbank.org/en/doc/115971529687983521-0080022018/original/EUGUSkillsandLaborMarketsfinal5292018.pdf,WorldB

Vi Europa.Eu,https//europa.eu/eurobarometer

Vii Chan,Helen, From ‘quiet quitting’ to ‘lying flat’, compliance risks posed by global skills shortage,Sept 2022, https://www.thomsonreuters.com/en-us/posts/investigation-fraud-and-risk/asia-pacific-climate-risk/ 

[viii] Talent Gap: Ten-Year Employment Trends, June 2021 Costs, and Global Implications,ProjectManagement Institute(PMI),June 2021. https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/career-central/talent-gap-report-2021-finalfinal.pdf

[ix] Javier Sanchez-Reaza Diego Ambasz Predrag Djukic Karla McEvoyMaking the European Green Deal Work for People The Role of Human Development in the Green Transition© 2023 International Bank for Reconstruction and Development/The World Bank. 1818 H Street NW, Washington, DC 20433, USA. Telephone: 202–473–1000; Internet: www.worldbank.org.

[x] Shaping skills and lifelong learning for the future of work,ILO International Labour Conference, 109th Session, 2021,Report vi, https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/documents/meetingdocument/wcms_813696.pdf

[xi] https://globaleducationcoalition.unesco.org/global-skills-academy

xii  UNDP ,Istanbul International Centre for Private Sector in Developmenthttps://www.undp.org/policy-centre/istanbul/skills-development-0