Creative work - developing talent in Europe

6 December 2006

Antonis Kastrissianakis, Director for Employment, Lisbon Strategy and International Affairs, Directorate-General for Employment, Social Affairs and Equal Opportunities, European Commission, opened the dialogue by explaining that Europe had to develop its talents in order to “harvest the fruit of growth and prosperity for its citizens”.

Talent is the main resource for a knowledge-based economy and innovation is the main growth engine for economies with high GDPs, said Mr Kastrissianakis, who argued that the Lisbon Strategy helps Europe to “bring more people to work” and get them to work for longer.

Between 1997 and 2006, Europe created more than 18 million new jobs and will hopefully create another seven million in 2007. But people need to work more “productively, creatively and innovatively”, with workers and enterprises adapting to changes in goods, services and labour markets. Workplaces must also enable talent to thrive, as this motivates people and releases their talents and develops their skills.

“Education for all” helps to achieve successful knowledge-based economies, said Mr Kastrissianakis. Progress is needed in this area, as one in every four Europeans now leaves school without a ‘solid’ qualification. The EU has therefore set the target of reducing the number of early school leavers to 10% by 2010, and ensuring that a minimum of 85% of young adults complete upper secondary education.

There must also be a “safety net of second chances”, open access to lifelong learning and more chances to learn foreign languages. Europe also needs to produce more maths and sciences graduates. It must reward talent to prevent a “brain drain” of young researchers and attract “bright minds” into Europe - currently, half of all skilled migrants go to the United States; far fewer come to Europe.

Workplaces must encourage flexibility, which is central to developing skills, and this is where flexicurity comes in, said Mr Kastrissianakis. By combining flexibility and solidarity, it builds bridges between jobs and enables people to acquire new skills.

The Commission and Council have identified ingredients for flexicurity policies, including flexible contractual arrangements, active labour market policies, lifelong learning and modern social protection systems. Member States need to find the right mix of these ingredients for their national situations.

Mr Kastrissianakis emphasised that Europe’s social partners are in the “front line” when it comes to encouraging flexicurity, promoting modern work organisations, improving lifelong learning and encouraging talent.

Markku Wallin, Permanent Secretary, Finnish Ministry of Labour, described how his country had moved from 22% to 8% unemployment, helped by the introduction of technological changes and the reorganisation of working patterns, with a foresighted management to ensure these changes were implemented.

Employees at every level in companies are expected to increase value-added in production and services, helping to find and remove obstacles to innovation. Businesses must create real knowledge-based environments, create clusters of innovation, and encourage networking and movement between “clusters”.

Companies’ human resources departments should play a key role in encouraging the development of their workforces, which would result in higher profits and greater employability. If staff were retrained, said Mr Wallin, they should be given the opportunity to use their new skills. He also pointed out that there was a “mismatch” between the qualifications held by those leaving higher education and what businesses need.

Increasing productivity requires good personnel policies to encouraging workplace and career development, on-the-job training and equal opportunities. This results in greater job satisfaction, better quality jobs and improved competences, which in turn leads to higher employee commitment, lower absenteeism and a desire to stay in work to a later age.

Other policy instruments should also be used to improve productivity, such as introducing more wage differentials, providing good private and public services, career guidance and flexicurity policies.

Mr Wallin finished by stressing the importance of strong research and development activities, workplace development programmes, and a workplace-based talent and education programme.

Jens Tholstrup, Executive Director of Oxford Analytica, outlined the findings of its new study, Getting Europe to Work, prepared for employment services company Manpower. This concludes, among other aspects, that Europe needs to move towards flexible work organisation. “We need to protect people, not unproductive jobs,” he said, providing “protective mobility”, fostering a new business environment and creating new opportunities.

Mr Tholstrup argued that Europe was not making the most of its skills. As a result, its GDP per capita is only two-thirds that of the US. EU companies are deterred from taking on workers or creating new jobs because of high employment costs. Workers and companies needed to work rationally, flexibly and efficiently to become more productive.

In Europe, “flexibility without security is not acceptable”, said Mr Tholstrup, so the key is to combine the two. A comparison of the Danish and French labour markets shows that creating more jobs generates more labour market security.

The current level of EU investment in education and training is inadequate, with many Member States lacking particular skills, and Europe risks losing out to Asia if it does not act to address this issue.

Mr Tholstrup also pointed to evidence of a mismatch between the skills employers needed and the skills available, with a severe lack of graduates to fill posts in computer science, engineering or biochemistry. One remedy is to build stronger links between academia and business, do more to prepare graduates for working life, ease them into the labour market and promote investment in sectors where talents are needed.

The study found a low level of training for those over 30, with too few older people seeking retraining. It also showed that small and medium-sized enterprises are poor at encouraging staff training.

Mr Tholstrup said one possible example to follow is that of Ireland, where the public and private sectors work together to offer the required training. This could provide a model for Europe to maintain its competitive edge in the global economy.

David Arkless, Senior Vice-President, Manpower, said his “scorecard” showed that Europe is not productive enough, and needs do more to compete with the US, the world’s most productive economy. Fifteen years ago, workers in the EU worked more hours than those in the US, but today they work less and are less productive. Mr Arkless attributed this to a lack of employment flexibility in Europe.

The EU has to cope with its ageing population, as this is altering its “dependency ratio”, and is failing to ‘cater’ for the fact workers have different motivations at different stages in their careers.

It also needs to do more to exploit the available talent, said Mr Arkless, citing polling evidence showing that even companies themselves believe that they are only using 26% of their workforce’s talent. He also argued that Europe’s “working profile” needed to be adjusted, pointing to the German example of high unemployment coupled with many job vacancies.

Mr Arkless also argued that Europe was not innovative enough, comparing it to the city of Shanghai, which, when it discovered that there was a lack of entrepreneurial talent for small and medium-sized enterprises, deliberately sought out young entrepreneurs to fill the gap.

He insisted that the US is still the most important economy in the world to compete against, because of the sheer size of its economy, but acknowledged that China and India pose a major long-term challenge as they are “surpassing Europe at the speed of light”.