Skills and competences of the future: the impact of technology European Parliament working group on digitalisation Brussels, 27 September 2016 Steve Bainbridge Thanks for the invitation. Congratulations on election and membership of European Parliament Employment and social affairs committee. 1

Familiar technology headlines ‘March of the machine makes idle hands’ ‘Technological unemployment’ ‘ [The major domestic challenges is to] maintain full employment at a time when automation…is replacing men’ ‘The combination of the computer and the automated self- regulating machine [is leading to a new era of production ] which requires progressively less human labour’ High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 2 2

Familiar technology headlines from the past ‘March of the machine makes idle hands’ New York Times, 1928 ‘Technological unemployment’ JM Keynes, 1933 ‘ [The major domestic challenges is to] maintain full employment at a time when automation…is replacing men’ President JF Kennedy, 1962 ‘The combination of the computer and the automated self-regulating machine [is leading to a new era of production ] which requires progressively less human labour’ US Ad hoc Committee on the Triple Revolution, 1964 High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 3 3

Impact of technology on jobs Job substitution All jobs are vulnerable 47% automated out of existence in 20 years New sectors need fewer people What’s App worth $19bn - 55 employees GAP US clothes retailer worth $19bn -137 000 employees High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 4 4

Impact of technology on jobs Job creation Amount of work is not fixed 65% of children entering primary school today will work in jobs that do not exist Unforeseen benefits Electricity created jobs for computer programmers The car created roads and motels High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 5 5

Impact of technology on jobs Job transformation/complementarity Falling costs, rising employment Technology substitutes tasks not people ‘Computers are stupid they only know answers’ – Picasso People provide competitive advantage High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 6 6

Impact of technology on jobs: we decide ‘Above all, technology itself does not dictate the outcomes. Economic and political institutions do. If the ones we have do not give the results we want, we must change them.’ Martin Wolf, Financial Times, 2014 The industrial revolution and technological advance helped give birth to mass education and training systems. Now we have to reinvent them High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 7 7

Impact of technology: why its different this time Pace of change Telephone: 75 years, 50m users; mobiles: 20 years, 2bn users Worries Falling wages, hollowing out of the labour market, inequality Demography Many will retire between now and 2025 9 out of 10 job opportunities will be to replace someone Demand for higher skills How do truck drivers become IT specialists? High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 8 8

Education and training for the technology revolution A workforce of clay; we need plastic Shaped, baked and breakable, or moulded, used and recycled 53% of adult employees in the EU need to learn new things continuously Raise skill levels – EU Skills Agenda 70 million Europeans with low levels of literacy and numeracy Around 26% of EU adult employees have significant skill deficits Address skill mismatch Skill mismatch not just a lack of skills 29% of graduates overqualified for their job High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 9 9

Education and training for the technology revolution Validation 5% of adults participate in formal further education courses 33% of adults participate in non-formal learning – make it visible! Better labour market intelligence EU Skills Panorama EU, national and sectoral skill forecasts; skill mismatch analyses Widen the talent pool Review recruitment methods - the perfect candidate does not exist Jobs unfilled due to poor working conditions not lack of skills High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 10 10

Education and training for the technology revolution Extend work-based learning Smoother transition not just to a job, but a good job Only around 40% of adult employees completed education or training involving some work-based learning Only 25% of EU enterprises offer apprenticeships Good jobs Skill demand is low and stagnant for many European workers 40% of adult employees only need basic literacy to do their job, 58% need only basic numeracy 33% of jobs require only basic ICT or no ICT skills at all. High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 11 11

Education and training for the technology revolution Time for a new human capital theory end? Reintegration of learning and work Blurring of general and job specific skills People as a competitive strategy Technology does not make businesses competitive – it is the people using it Our decision High quality vocational education and training (VET) relevant to labour market needs is a policy priority for the EU. Europe’s unemployment level, particularly, among young people worryingly high. Skills, qualifications and employability are central to Europe’s economic recovery. But the vocational education and training that delivers the skills, qualifications and employability needed faces growing challenges. How do we combine a highly educated labour force with adequate job creation? How do we increase participation in a shrinking and ageing labour force? How can training help address inequality and develop the green economy? Cedefop European agency devoted to VET is working on these and other questions 12 12

Information online or sent to you: ask us Look for at cedefop.europa.eu In addition to the analyses that I have outlined, Cedefop provides other information on training that is available for this committee to use. Everything is available on our website. But if there is any information we can provide for you please ask.