Employment

OECD Reviews on Local Job Creation: Employment and Skills Strategies in Slovenia

 

Remarks by Angel Gurría

OECD Secretary-General

Brdo, Slovenia, 5 September 2017

 

 

Minister Kopač Mrak,
Minister Smerkolj,
Ladies and Gentlemen,


It is a great pleasure to join you to open this event and present the new OECD report, Local Job Creation: Employment and Skills Strategies in Slovenia. Allow me to begin by acknowledging the close partnership with both ministries throughout this project. This initiative is one of the ways in which we are working with Slovenia to address some of the issues in the Labour Market Activation Review we published last year.


Slovenia’s economic picture is has improved considerably

Later this morning, I will launch our latest Economic Survey of Slovenia with Minister Vraničar Erman. Although it is under embargo until then, I can confirm that the headlines are encouraging! The economy has improved considerably since my visit two years ago. Growth is now forecast at 4.5% this year, and unemployment continues to decline.


Despite this good news, Slovenia still faces important challenges. Productivity is low compared with other OECD countries, and it is not growing. Slovenia’s labour market has become more polarised over the past two decades with middle-skill jobs being lost in favour of low and high-skilled jobs.


In 2016, youth unemployment sat at 15.3%, slightly above the OECD average. Meanwhile, the employment rate for older workers (aged 55-64 years) stands at 35% compared to an OECD average of 55%. At the same time, 25% of employers face difficulties in finding people with the right skills.


This calls for a place-based approach

Later this morning, I will talk about the importance of education and labour market policies that equip workers with the skills they need to find good jobs, and to adapt to changing labour market conditions.


As we tackle these challenges, we will need to look beyond the national average. There are often large differences in economic performance and employment within countries.


In Slovenia, the highest unemployment rate in 2015 was found in Mura, at 19%. This is more than twice that of the sub-region with the lowest rate: Upper Carniola at 9%. Such large gaps are not uncommon – we have seen them in other countries, ranging from Hungary to Australia.


Regions in Western Slovenia still drive a large proportion of the country’s growth. These regions were responsible for 70% of the country’s GDP growth between 2000 and 2013. Inter-regional disparities in GDP per capita grew between 2000-2013 as measured by the Gini index, although they remain below the OECD average.


These regional variations underline the importance of tailoring national policies to local needs. This is a message that lies at the heart of this study, which is part of a series which now covers 16 countries.


Let me single out on three specific recommendations in my remarks today:

  • First, we need to build the capacity of local public employment services to respond to local labour market needs. These services play an important role in contributing to a well-functioning labour market by matching people to jobs and providing employers with a steady supply of talent. Yet when we compare Slovenia’s local employment services with those of other countries, we find they have limited flexibility to adjust their programmes and policies to local realities. This undermines their ability to meet the needs of employers and, ultimately, the communities they serve.

  • Second, more can be done to develop a responsive employment and skills system that can meet the demands of employers over the short and long-term. There are already good examples of how this can be done in Slovenia. In Novo Mesto and Maribor for example, the adult education centres -- RICcentres -- work in collaboration with local employment offices. Together, they offer training to unemployed adults and link them to employers to support job creation in important sectors of the regional economy, such as agriculture, ICT and tourism. We also need to see employers playing a more proactive role in skills development and vocational training, and the report identifies some promising examples that could be built on further.

  • Last but not least, efforts are needed to promote job quality at the local level. It’s not just the skills of the workforce that matter. It’s also how employers use these skills. When employers do not put the skills of workers to good use, both productivity and job quality are undermined. This is often a particular problem in smaller and more remote municipalities of Slovenia, some of which lack the infrastructure and skills base to attract new investment and development. 


Slovenia’s Smart Specialisation Strategy represents an opportunity to address these challenges. The Regional Development Plans – such as those in Drava and Southeast Slovenia – also emphasise the importance of raising the quality of human capital as well as the overall productivity of enterprises.


A number of mechanisms can be used to help local employers better use the skills of their workforce, and this report highlights some of them. Targeted programmes to help employers improve management practices, as well as efforts to expand life-long learning are some of the opportunities explored in this report.


Much can also be learned from the experiences of other OECD countries such as Sweden, Finland and the UK, which have developed programmes to support employers as they re-organise their workplaces to boost productivity.


Ministers, Ladies and Gentlemen,


The OECD is proud to have worked closely with Slovenia in the definition of its National Development Strategy. I am also pleased to announce that we will, over the coming weeks, begin work on the Action Phase of our partnership with Slovenia on its National Skills Strategy. If they are to succeed, all of these efforts and others must be complemented by implementation at the local level.


The OECD stands ready to support Slovenia as it pursues the ideas presented in this report. This is, ultimately, about designing, developing, and delivering Better Policies for Better Lives.


Thank you.

 

 

See also

OECD work with Slovenia

OECD work on Employment

 

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