Throughout the conference, participants discussed the role of skills in driving economic growth. This included exchanging ideas and recommendations on how to close skills gaps and how to build an adaptive, future-ready workforce capable of sustaining productivity in a fast-changing economy.
Participants discussed how closing skills gaps is central to boosting economic performance. Rapid technological change, demographic shifts, and evolving labour market needs are placing increasing pressure on skills systems worldwide. Investing in workforce skills drives long-term economic growth and strengthens labour market resilience.
Advanced economies are now beginning to face challenges regarding skills that were previously associated with developing economies, albeit with stronger institutions. These challenges include the number of workers engaged in informal work, higher insecurity for workers and low capacity for government programmes. Across the developed world, there is an ongoing challenge to ensure necessary skills are matched with appropriate jobs and employers. Data gaps, including using education as a proxy for skills, makes identifying the issues and measuring the effectiveness of interventions difficult.
Participants highlighted issues with defining and conceptualising skills gaps. There was agreement between participants that often what is referred to as a skills gap is instead a lack of coordination between employers and workers. Additionally, employers can lack information as to what they should be upskilling towards. Structural mismatches between education and the workplace can worsen this.
Participants therefore stressed the importance of defining skills gaps, and measurement of interventions. Reframing the question of skills mismatches to high demand and low demand skills, can allow for tailoring of interventions.
Recommendations
Skills systems need to adapt to the changing demands of labour markets. This requires flexibility such as modular, short-course learning that is demand-led. Coordination between national and local bodies best enable this. This also facilitates the tailoring of systems for different groups i.e. those already in work, NEETs, and those who are far from the labour market. In Greece, there are various programmes for reskilling and upskilling the workforce, including subsidy schemes for different groups (e.g., long-term unemployed individuals, unemployed women, middle-aged jobseekers) and ‘Job-Link’ vouchers which focus on job creation in specific regions.
A clear progression pathway for skilling and reskilling throughout people’s working lives would support productivity goals. Successful interventions meet workers where they are, with a clear pathway linking skills provision and employment outcomes.
The most effective skills are personalised and relevant to starting points. Some people, particularly in low-wage sectors, may require greater access to foundational skills, including support with interview training, boosting social skills in a work context, critical thinking skills, and support with getting to and from work. This includes tailored training for those with neurodivergence.
Policy solutions and interventions should consider how to engage those least likely to access training, due to structural barriers (e.g. low paid jobs, in particular sectors), and individual circumstances (e.g. low confidence, caring responsibilities), who often require training the most.
While technical and functional skills are important, management skills also have productivity benefits[1]. Across sectors, good management can improve the culture in workplaces, uphold employment rights, allow businesses to retain employees, and increase wellbeing. On the other hand, bad management is often cited as a major factor for workers leaving roles, particularly in some sectors such as engineering where poor management is often a key driver of high drop-out rates for women.
AI can be better utilised in training and upskilling but concerns around ethical, social and economic implications remain. Some businesses are unaware or unsure of how to best use AI in upskilling their employees. There are also knowledge gaps on business boards creating barriers to the adoption of AI in upskilling/training.
Incentives for businesses of all sizes, employees and government need to be better aligned. SMEs have the appetite to invest in skills but face constraints, such as time, cost (even when funded by external parties, this can be volatile and short-term), and a low confidence in return on investment. In the UK, there are constraints on the self-employed, and their ability to take up training. There are also opportunity costs for workers of re-skilling or up-skilling, so there need to be clear incentives for workers.
Social partners should be strategic, long-term partners in developing and delivering workplace learning. For example, chartered professional bodies can facilitate employer-led promoting ecosystems to promote employers, educators and individuals – to get young people into programmes and mentoring, which boosts their confidence and skills and prepares them to enter the labour market. Unions can also play a significant role in this, often acting as seed funding i.e. where a union invests, employers and suppliers follow which brings together businesses and workers.
The private sector has a role to play in designing skills interventions.Effective curriculums are designed in collaboration with employers and businesses to ensure that skills are closely aligned to demand. Employers may need to widen their understanding of skills and to allow the evidencing of skills in non-work-related contexts. This will facilitate higher participation for those who are just entering the labour market.
Ultimately, skills are one feature of wider labour market issues, such as youth participation and productivity. Early interventions can make a sizable impact, and interventions need to be tracked, e.g. through Key Performance Indicators. An effective system delineates roles and responsibilities between government and businesses regarding skills investment. International examples of successful interventions include labour diagnostic mechanisms for recording and analysing labour market skills needs, tax exemptions, using vouchers to incentivise workers, designing flexible and modular training programmes, introducing work-life balance measures (e.g. paid parental leave) and continuously upskilling and reskilling.
[1] John Van Reenan, Professor Nicholas Bloom, Professor Raffaella Sadun, ‘Improving productivity thorough better management practices’, 2021. Link: https://www.lse.ac.uk/research/research-impact-case-studies/2021/improving-productivity-through-better-management-practices