Strategies for narrowing the digital skills gap in Europe

24 August 2016

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In a new report prepared for the European Commission, Carl Frey and Thor Berger investigate why the economic benefits of digital industries are not being widely felt, despite the pace of technological change being faster than ever before.

The report, commissioned by the EC's Executive Agency for Small and Medium-sized Enterprises (EASME) as part of its mission to foster the development of e-leadership skills across member states, examines the reasons behind the current state of affairs, and puts forward practical solutions for addressing the digital skills gap.

Recent research shows that while countries have become better at adopting new technologies, they are getting worse at putting them into widespread use. The authors say that while digital technologies are likely to contribute to a surge in productivity over the forthcoming decades, associated benefits are unlikely to be widely shared unless substantial investments are made to upskill the European workforce.

"Since the computer revolution of the 1980s, new technologies and production methods have mainly favoured skilled workers," they write in the report. "At the same time, European labour markets have seen a wide range of middle-income routine jobs disappear, as computer technologies have substituted for workers in clerical and production tasks, in turn explaining recent job polarisation.

"Although there are competing explanations for the decline of middle-skill jobs—particularly emphasising the role of offshoring—a large body of work documents that technology is the main factor in understanding the striking job polarisation evident in nearly every European country."

Frey and Berger go on to assess the impact of automation on jobs, with some estimates putting up to 54 per cent of current jobs in EU member states at risk of computerisation, including many low-skilled jobs in construction, logistics, and services.

And while technological change is also creating entirely new types of jobs and industries, such as app development, big data analysis and software design, a growing body of work suggests that the pace of new job creation has slowed since the Computer Revolution of the 1980s, with just 0.5 percent of US workers employed in technology-related industries that have been created in the 21st century.

They say: "While new technologies have not created many new jobs directly, the arrival of new technologies is, however, significantly changing the demand for skills beyond the technology sector: across occupations and industries new job tasks are emerging as technologies are being implemented.

"In particular, we find that technological advances rapidly are outdating many skills: according to the European Skills and Jobs Survey, some 47 perc ent of European workers have seen new technologies used on the job since they started their employment, and 21 percent of workers believe their skills will be outdated over the next five years."

To tackle the shortage of basic digital skills in lagging regions, Frey and Berger propose that digital competence centres are established in each region, to provide basic training, help workers to obtain and refine their digital skills, and facilitate and support the adoption of digital technology in firms across the productivity spectrum.

Second, they argue that e-learning needs to play a larger role in supporting the diffusion of advanced digital skills by allowing for modularised educational offerings, that do not require workers to complete an extensive academic programme to update their skills.

But they say emphasis must also be placed on foster creative and social skills, which computers are unlikely to make redundant in the foreseeable future.

Lastly, to anticipate skill shortages and maintain an up to date view of skill gaps and mismatches, they recommend the creation of a unified European digital job portal, offering a standardised means of certification and validation of digital skills and competencies across member countries.

They conclude: “Taken together, these initiatives would serve to narrow the digital divide across countries and regions, while at the same time boosting productivity in the European Union as a whole.”