Porto Social Summit, Workshop on Skills and Innovation, 7 May 2021

 

Remarks by Angel Gurría,

Secretary-General, OECD

Paris, 7 May 2021

Dear Executive Vice President, Prime Ministers, dear friends,

I am delighted to address this Workshop on Skills and Innovation, which is a crucial element of the Social Summit. Even before the COVID-19 crisis, a number of global trends, including globalisation, population ageing, digital transformation and climate change, were already disrupting labour markets, with important implications for skills demand and supply. While these trends seemed to have a positive net effect on job creation – employment rates were trending upward in most OECD countries until the COVID-19 crisis – there have nonetheless been major distributional consequences.

The current crisis has further accelerated some of these trends, adding to the disruption.

For example, it boosted digitalisation, but not every worker or firm has had the skills – or the technology – to take advantage of this transformation. We must close the digital divide and help the recovery in places hit hardest by the crisis, such as those relying on tourism and hospitality.

Upskilling and reskilling measures – along with active labour market policies – will be instrumental to helping adults move to expanding sectors. We should not be looking for quick fixes; instead, we need to provide quality career advice and guidance, carry out effective skill profiling and identify relevant training opportunities.

The European Skills Agenda sets an ambitious target of 50% of adults participating in training each year. Achieving this target will be essential to foster positive career transitions. But getting there won’t be easy or fast. Even before the pandemic, only 40% of adults in OECD economies participated in training each year, and only 20% of low-skilled adults. With the COVID-19 crisis, the situation has got even worse: we estimate that social distancing measures decreased workers’ participation in work-based learning by almost 20% on average.

We have identified a number of challenges that need to be overcome.

First, we need to consider the training needs of low-skilled workers. These are the workers who have generally been hit the hardest by the pandemic, as they were more likely to have suffered periods of enforced inactivity due to furlough or temporary layoff. This in turn led to fewer learning opportunities for them. We estimate that, on average, the reduction in work-based learning opportunities for medium- and low-skilled workers is over twice as large as for tertiary-educated adults.

Second, we need to address the problem that for many individuals, training is too costly or cannot be reconciled with work and family responsibilities. Financial incentives that cover the direct and indirect cost of training, paid training leave and flexible training modules can improve participation in training.

Third, we have to recognise that, for many people, the available training opportunities may appear not relevant or not worth the time. Increasing awareness through quality career guidance and advice is particularly important to increase participation among the most vulnerable. Ensuring that employers consult employees can also improve the relevance of training and thus increase engagement.

Finally, we have to explore the most effective ways of developing the skills needed for the digital economy, which can have positive spill-overs on productivity. OECD work shows that ICT skills and investments in informal training are associated with increased productivity. Bringing up the level of digital skills and productivity among those lacking such skills would help reduce income inequalities.

Dear friends,

Education, training and life-long learning are at the heart of the European Pillar of Social Rights. The recovery from the crisis must include expanding access to quality adult learning for all, so that all Europeans are equipped to navigate the transitions to come.

The costs of scaling up and improving adult learning systems will be high. Some of the burden should certainly be shared among those who get the direct financial benefits from training – that is, employers and individuals. But the social returns to adult learning greatly exceed those private returns, which underlines the clear role for government, working with the social partners, in raising skill levels. Policy makers cannot do everything, but there is much that they can do. Count on the OECD, with its motto of better policies for better lives, to support you in this endeavour.

Thank you.

 

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