Increasing skills shortages in EU, warn new reports

Two new reports published on Thursday both express concern about increasing skills shortages in EU member states.

Skills | Photo credit: Adobe Stock

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

22 Mar 2018

The reports were published by the organisations representing the business community at EU level and SMEs across Europe.

One warns that the ongoing negotiations about Brexit “with hesitations about their outcome”, continue to cast an “atmosphere of economic uncertainty.”

In its ‘EU reform barometer 2018’, BusinessEurope says the EU needs to do more to improve competitiveness, with EU economic output only nine per cent above pre-crisis levels, compared to 15 per cent in the US and 18 per cent in Canada.


Commenting on its findings, BusinessEurope President Emma Marcegaglia said, “Our 2018 reform barometer shows that while the EU has many world class businesses, innovators and skilled workers, much more can be done to help raise growth and living standards.

“With the US having recently put in place a major corporate tax reform which will significantly improve its attractiveness as an investment location, the EU needs to use all possible levers to improve its competitiveness.

“The EU needs to address growing skill shortages which, despite the relatively recent recovery, are already at their highest in over 20 years, posing a real risk that the falls in unemployment seen in recent years will soon slow.”

Key findings include: While the EU is presently growing strongly, with 2.5 per cent in 2017, the underlying capacity for growth remains too low; There is growing evidence of a structural mismatch in EU labour markets, posing a real risk that the falls in unemployment seen in recent years will soon slow;

Japan and the US continue to spend more on research and development than the EU, with China having also overtaken the EU on R&D spending in recent years; It remains more difficult to do business in the EU than the US, with little progress made over the last 10 years in closing the gap.

The second report is by the UEAPME, the employers’ organisation representing crafts and SMEs in EU and accession countries at European level.

Its President Ulrike Rabmer-Koller said SMEs maintained “high levels of confidence” towards the current business environment and expect a “future of stability.”

As a result, the SME “climate index” has risen to 81.6 points, the highest level on record.

Its report warns, “Despite recent improvements in the economic outlook of southern Europe, the North-South divide still persists, whereas uncertainty over Brexit widens the gap between the UK, its close partners and the rest of Europe.

“All sectors show stable growth, with positive figures for investment and employment. However, growth lost momentum compared to last semester, especially in construction and personal services, which may be a first sign of labour shortage for some qualifications.”

It says that a “significant gap” in economic sentiment still persists between the north and south of Europe, while the ongoing negotiations about Brexit, with “hesitations about their outcome, cast an atmosphere of economic uncertainty and distance the UK and its close partners from the rest of Europe”.

Rabmer-Koller stressed that the next generation of EU programmes should focus on growth and competitiveness, where “especially SMEs need support to catch-up with digitalisation and greening of their businesses.”

In addition, she underlined the need for further improvements in the regulatory environment, investments to close the skills gap and called on EU leaders to “ensure legal and regulatory clarity on Brexit, in order to end the current uncertainty for businesses.”


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