Speaking at the World Economic Forum on 17 January 2023, European Commission President von der Leyen set out a response to the industrial crisis we are facing – calling for a Green Deal Industrial Plan to support clean tech industrial transformation in Europe. Of the four main pillars, skills was third on the list. However, little mention was given as to how Europe will concretely tackle the skills and labour shortages hitting all our industries. 

The US has directly tied tax incentives in the new Inflation Reduction Act with training obligations and the creation of apprenticeships. It’s a gamechanger for the climate and clean tech skills development. Where is Europe’s ambition?

How Europe could up its game

The EU Year of Skills 2023 must move us beyond rhetoric around training and skills to concrete action, otherwise the lack of a social dimension will become the Green Deal’s industrial Achilles’ heel. In May last year, industriAll Europe set out how Europe could up its game. Social conditionalities should be attached to all public support for industry at EU and national level, making investment conditional on investment in the workforce and Just Transition rights and paths for individual workers.

The challenge is staggering. The changes within automotive manufacturing are indicative of what European industry is facing: the emergence of completely new job profiles and the need to massively step-up training programmes to meet the growing demands. According to the European Battery Alliance, 800,000 re/upskilled workers are needed to reach the EU’s battery ambitions, while BCG research for the European Electromobility Platform estimates that 2.4 million automotive workers will need to be retrained by 2030.

Paradoxically, there are hundreds of thousands of workers in Europe currently subject to short-time arrangements as a result of the energy price crisis and supply chain problems. This is lost time for workers and their industries – a SURE 2.0 plan should include mandatory conditions on retraining/upskilling. The SURE plan proved its worth during the pandemic, helping 2.5 million businesses retain 31 million workers in 2020, according to a report issued last year. Today’s period of reduced activity or production should be used for retraining and upskilling of the workforce.
While training for young employees is vital, training for older employees and more generally for employees throughout their working lives is indispensable. If employees over the age of 45 stop training, then we create the conditions for long-term unemployment and a loss of skills for employees frustrated by their professional situation, while the retirement age is being pushed back everywhere.

New skills to meet the challenges

New skills will be needed within existing occupations. According to the European Commission, the task profiles for electro-engineering workers, machine and plant operators, other manufacturing workers, researchers and engineers, as well as science and engineering technicians, will considerably change in the course of the net-zero transition. Key competences – such as science, technology, engineering and mathematics (STEM) and digital skills - will be needed across the board to cope with the upcoming technological changes in general. Green skills, which have emerged in recent years, such as waste/recycling management, energy efficiency engineering, eco-design, etc., will become an even more necessary asset for industrial companies. Transversal soft skills, such as analytical and cross-sectoral thinking, teamwork, innovative spirit and the ability to learn, for instance, are equally needed, and should not be overlooked.

Skills shortages could short-circuit green and digital transitions

Today, many of our industries are concerned about strategic skills shortages – which are as crippling a gap as the lack of semiconductors or raw materials. It is not an exaggeration to state that skills shortages could short-circuit the green and digital transitions unless urgent measures are taken.
This calls for a comprehensive strategy to attract and qualify new workers to decarbonising industries, including the necessary measures to attract and retain women in industry (as laid out in our Women in Industry work in the World Manufacturing Forum).

Education and training policies continue to fail to reach those most in need, i.e. low-skilled workers, women, older workers, part-time workers, workers in non-standard employment (self-employed, platform workers…), workers in SMEs along the supply chain, single parents, not to mention the specific situation of young people: in 2020, ca. 14 million young people (17.4% of 20-34 year-olds) were neither in employment, nor in education and training in the EU15. In that context, it was concerning to see that in the course of the recent COVID-19 pandemic, companies cancelled apprenticeship positions and reduced training budgets, which is likely to exacerbate the risk of future skills shortages.

An EU legal framework to manage the Just Transition and ensure skills intelligence

Employers should have a responsibility and natural interest in investing in maintaining a skilled workforce. Worker information, consultation and participation, as well as collective bargaining, are the best instruments at hand to plan the transition of industries. As argued throughout our Just Transition Manifesto, we need an EU legal framework for the anticipation and management of the Just Transition which recognises the vital role that information, consultation and participation of workers, as well as collective bargaining, play in anticipating change and changing skills needs. Such an EU legal framework must ensure that skills intelligence – the anticipation of skills requirement - is strengthened through strategic skills and jobs planning in every company, every region and every sector, with the full involvement of the social partners, VET providers and public authorities, which are best placed to accompany structural changes 

Supporting employability throughout industrial transitions

A duty for companies to design long-term employment and training strategies in consultation with workers’ representatives is indispensable. In addition, an EU legislative framework on anticipation and management of the Just Transition must address new rights: Every worker must have an individual right to training and to paid educational leave. Life-long learning opportunities at all stages of career are crucial to prevent erosion of skills and to support the employability of every single employee throughout industrial transitions. Guarantees must be provided that employee training is of a good enough quality, meaning that it focuses on the learning outcomes, and leads - whenever possible - to a qualification that is validated through transparent and clear recognition and certification systems which allow for comparability.

At the same time, it is important that these measures are integrated into a larger Just Transition Framework comprising all policy levels supporting the transition. Training and qualification policies must be an integral part of industrial strategies at all levels. Without a comprehensive industrial strategy, leading to the maintenance and creation of quality jobs, all well-intended skills policies will be doomed to fail. Indeed, regional strategies based on granular employment mappings and skills forecasting at regional level will be key to determine the jobs that will be lost, new employment potentials, corresponding skills needs and tailor-made re- and upskilling programmes.

Reaching carbon neutrality by 2050 will require both the planning and suitable framework conditions to support job-to-job transitions, including the necessary reskilling and upskilling of the current workforce. It also requires investing in and boosting our education systems to develop the new training programmes needed to deal with changing and emerging job profiles in new breakthrough technologies, digitalisation (directly linked to the net-zero transition) and new business models.

Social conditionality on funds and a stronger framework for the anticipation and management of change are critical, missing elements of the European framework to address skills shortages – critical elements of a real industrial strategy response.

Article published in Euractiv