More flexibility in labour market policy management would boost growth, says OECD


21/04/2008 - OECD governments could boost economic growth and help create jobs if local agencies and authorities had more power and autonomy to adjust employment and training programmes to meet local needs, concluded OECD employment ministers attending a high level conference in Venice, Italy, on 17-18 April.  Participants agreed to urgently review the organisation of employment policy in order to respond to the  opportunities and threats that localities face in today’s knowledge-based economy.

More gains will be made from greater coordination at the local level, particularly between employment and economic development policies, said OECD Deputy Secretary General, Aart De Geus.  He urged OECD members and non-members to work together to better balance national policy goals and local concerns. 

One of the worrying findings of an OECD study released at the conference was that there was little coordination between employment policy, training and economic development at the local level which tend to be delivered in ‘silos’.  In order to better coordinate policies, local agencies need to adapt their services to meet goals and targets agreed with other agencies.

Participants noted that one of the reasons that governments do not give local agencies more autonomy is that they are concerned about a lack of accountability.  However the conference highlighted new ways to balance flexibility and accountability, for example by ensuring local policy makers have a say on the targets they have to meet locally.

U.S. Secretary of Labor Elaine L.  Chao said: “The United States has successfully adopted an integrated approach to workforce training, which encourages the key players in each region to work together to design a customized approach to meet their workforce needs. The US Department of Labor has launched a series of initiatives to bring together key leaders from all sectors at the local level, to develop an integrated approach that expands access to relevant worker training and post-secondary education.”

The main recommendations stemming from the conference have been set out in the Venice Action Statement on Enhancing Flexibility in Labour Market Policy.  The statement summaries the challenges currently facing policy makers and gives a core set of six concete actions they can take to improve their policy frameworks.  

The issues debated at the conference are outlined in the new OECD publication, More Than Just Jobs: Workforce Development in a Skills-Based Economy that was released at the conference.  The book shows how education and training systems are  too slow to adapt to business needs; how the local level is the best place to make the workforce more competitive; and how the current policy focus in many OECD countries is ill-adapted to the challenges faced by local areas in  the context of globalisation.  It proposes a framework for policy and practice that takes into account both today’s business requirements and the aspirations of individuals.

The high-level conference, Decentralisation and Coordination: The Twin Challenges of Labour Market Policy was attended by Elaine Chao, US Secretary of Labor;  Stephen Timms, UK Minister of State, Department for Work & Pensions; Cesare Damiano, Minister of Labour & Social Security, Italy; and Tarja Cronberg, Minister of Labour in Finland among many others.

It was jointly organised by the Senate and the Ministry of Labour and Social Security of Italy and the OECD LEED Programme, in collaboration with Italia Lavoro and Isfol.  It builds on work first undertaken by the OECD LEED Programme 10 years ago when several OECD countries undertook simultaneously to decentralise their labour market policy. 
To obtain copies of the Venice Action Statement on Enhancing Flexibility in Labour Market Policy and More Than Just Jobs:  Workforce Development in a Skills-Based Economy, journalists are invited to contact Lucy Clarke (e-mail: lucy.clarke @ 

For more information on the OECD LEED Programme, please consult:


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