European Commission Report: Europe’s Workforce Losing Ground

February 18, 2010 Updated: February 18, 2010

GOTHENBURG, Sweden—The European workforce must acquire new skills and knowledge to counter rising unemployment and maintain its competitiveness in the global market, according to recent study published by the European Commission (EC). The report, "New Skills for New Jobs: Action Now" was written by a group of independent experts assembled by the EC in March 2009.

The main conclusion of the report is that the lack of adequate and high level skills is threatening Europe’s future as a competitive player in the global market.

Nearly one third of Europeans aged 25-64 or about 77 million “have no, or low, formal qualifications, and only one quarter have high level qualifications,” according to the report.

The study shows that there is a correlation between the possession of higher skill levels and the employment rate, and low-skilled workers are less likely to improve their skill sets. Consequently, they fair worse in the labor market. Only 50 percent of those with low skills are employed, while the employment rate for the highly skilled is 85 percent.

Despite improvements in recent years, the European workforce is still suffering from mismatches in the labor market, in which the lack of appropriate skills is causing unemployment and social exclusion.

The expert group recommends better incentives for individuals and employers who invest in acquiring skills, improved collaboration between educational and training institutions and the labor market, as well as better anticipation of future employment trends.

According to research by the Organization for Economic Cooperation and Development (OECD), investments to stimulate demand for high level skills is as equally important as incentives to stimulate the supply. The OECD conducts economic research for its membership comprised of 30 democratic nations, including the United States. The OECD is based in France, with five regional centers, including one in Washington, D.C.

To download a copy of "New Skills for New Jobs: Action Now," click here and then click on the download link in the upper right corner of the EC Web page.