Investing in skills through EU’s Union of Skills

On 5 March, the European Commission published the Union of Skills Communication. The aim is to respond to the challenges related to competitiveness and self-reliance that the Commission has previously raised, and it is, as expected, in line with the Competitiveness Compass published in January. The Commission sees the biggest current problems as skills shortages in both vocationally demanding and strategically important sectors, poor allocation of skills, slow responsiveness to rapidly changing skills needs, difficulties in attracting and retaining talent, and administrative fragmentation.

Current challenges

Europe is currently facing problems related to skills and education. Firstly, Europe is not able to produce enough and sufficiently high-quality skills, and retraining and skills development during working careers are not made possible in a sufficiently progressive manner, which is particularly pronounced in remote areas. The problem starts with basic skills. Young people’s skills in mathematics, reading and science have weakened, and almost every second young person has insufficient digital skills. Two-thirds of the sectors suffering from a skills shortage are those requiring vocational training. Agriculture is an example of such a sector, which is particularly short of skilled workers under the age of 30. Europe is also not producing enough university graduates, considering that by 2035 half of new jobs will require higher education. The skills gap will inevitably affect Europe’s resilience to crises, as there is a shortage of skilled workers in critical and strategically important sectors such as artificial intelligence, semiconductors and cybersecurity.

There are also gaps in continuous learning, with less than 40% of the adult population participating in any form of education or training. The EU’s target is to raise this to 60%. There is also a gender gap in skills, with half as many men as women in STEM fields (science, technology, engineering and mathematics), while boys face more challenges than girls in basic skills. In addition to gender, skills levels are negatively affected by socio-economic background and place of residence. Another problem in Europe is that in global competition we are not as attractive an option as other OECD countries such as Australia and Canada.

According to the Commission, we are training people, but not enough. Four out of five SMEs are struggling to find the skills they need. Europe should also do a better job of recognising skills between countries, as too often a professional qualification acquired in one Member State is not suitable for working in another. The governance of skills and their development is also currently not supportive of the growth of skills. Skills are spread across multiple ministries and departments at all levels of government, making it difficult to coordinate effective action.

Goals

The Union of Skills aims to encourage all Europeans to participate in building a supportive skills base, and it aims to involve people in retraining and skills development in line with the EU Pillar of Social Rights. The aim is also to support companies to be competitive and resilient. SMEs in particular should find it easier to find skilled workers. In addition, the aim is that skills acquired within the EU are recognised and trusted across the EU.

How are the goals achieved?

The Commission aims to build its actions on the European Education Area, the European Skills Agenda and the European Research Area. The Commission aims to develop lifelong skills through a strong education base, which is done, among other things, through the Basic Skills Action Plan and the European Innovative School Award. The STEM Education Strategic Plan aims to reduce the skills gap in STEM fields. The aim is to make higher education more accessible to everyone, for example, people of different ages, which makes education more inclusive and future-oriented.

Upskilling and reskilling play a major role in the Commission’s communication. There is currently a shortage of skills in areas such as healthcare, and in the future there will be a shortage of people with AI, chips and data. To achieve its goals, the Commission will support the implementation of the Individual Learning Account (ILA), activate the education of adults with basic education and examine whether there is room for relaxation of state aid rules for skills development. The Commission will also evaluate the EU’s Skills Academies, and possibly focus only on the best performing ones.

The Commission is also focusing on skills mobility and allocation to make the most of the potential of the EU’s single market. It is facilitating skills mobility through the Skills Portability initiative and developing a common framework for automated skills recognition. The Commission is also developing innovative joint curricula in strategic areas such as artificial intelligence, chips, data and cybersecurity.

Europe also needs to do a better job of attracting and retaining talent, which is why the Commission is proposing a new framework (European Talent Magnet Framework). The Commission is exploring the possibility of introducing a talent pool and is aiming to make the continent attractive to researchers by offering excellent work and employment opportunities.

We also need to invest in skills. The Commission reminds us that education is an investment, not an expense. In the current financial framework, skills are financed through several programmes, such as ESF+, RRF, ERDF, Erasmus+, JTF and InvestEU. According to the Commission, EU funding should be only one part of the funding of skills, as additional investments are needed from both the Member States and the private sector. The Commission encourages Member States to take advantage of the extended adjustment path for economic rebalancing under the revised fiscal rules, which will enable investments in growth, for example through education investments.

To develop skills, the Commission is introducing a new steering mechanism, based on the European Skills Intelligence Observatory. This is intended to collect all available real-time data across the EU and use it to invest in skills as effectively as possible. The activities will be coordinated through the European Skills High-Level Board, which is chaired by the Commission and involves a wide range of actors.

The Commission’s communication outlines future initiatives for the coming years. An action plan to improve basic skills and a strategic agenda for STEM education are expected as early as the first quarter of 2025.