Skills gap to slow Europe's e-development

Workplace Net users in Europe will rise to 77 million by 2004. But there are not enough skilled IT staff to let Europe's...

Workplace Net users in Europe will rise to 77 million by 2004. But there are not enough skilled IT staff to let Europe's e-business expand. Keith Nuthall reports

With growth in Internet use higher in Europe than anywhere else in the world, it is clear that in e-business Europe should no longer be considered a poor relation to the US. But the International Labour Organisation (ILO) has warned that the significant progress made in Europe could suffer due to a shortfall in trained computer...

professionals.

A report for the ILO's European meeting warns of a "skills gap in Europe's information and communications technology (ICT) workforce, which risks becoming a critical bottleneck to the expansion of IT industries".

Statistics in the Globalising Europe document show that these claims are not just bluster, aimed at encouraging governments to invest in employment training. The document highlights the fact that Europe now has more than 50 million Internet users, with Internet usage "growing more rapidly than in any other region of the world".

It adds that the number of Internet users in the European workplace is expected to grow from 29 million to 77 million by 2004. However, the report predicts that while jobs in European ICT industries will increase by more than 8.1% annually in coming years, (from 9 million to 12.3 million), the number of unfilled vacancies could triple, from 500,000 in 1998 to 1.6 million in 2002. The report estimates that the skills gap has cost $106bn in lost gross domestic product since 1998 "and will continue to do so in the absence of skills".

The report confirms that the difficulty in finding the IT staff is a Europe-wide problem, affecting both users and suppliers equally.

"A critical bottleneck to the expansion of ICT is the shortage of skills," it said. "ICT has created a vast demand for people with computer skills to develop and maintain online information systems and to provide the type of services - such as e-commerce - which these systems have brought into existence.

"The skills required for the new jobs typically differ quite substantially from those of workers made redundant. The extent to which the latter will be retained and redeployed will depend a great deal on whether other workers are available who already have such training. In view of Europe's ageing population, the challenge of retraining is an especially important policy area to address."

The report adds a footnote that will be especially unwelcome in countries with fewer employment regulations such as the UK: "Retraining and employment are more likely to occur in countries and in organisations where workers have a high degree of employment security.

"Employment protection legislation has the effect of making retraining and redeployment relatively more advantageous for the employer from a financial point of view."

ILO director-general Juan Somavia, said, "Enterprises across the continent are facing the challenge, but this is not an economy in which anyone can afford to sit on their laurels."

The skills gap's likely impact on Europe

The ILO paper highlighted the consequences of this skills gap, none of which make comfortable reading.

  • High unemployment is likely to remain in areas of weak IT development, while regions with the highest growth will be restricted by the skills gap and so be less able to take up the slack and provide more jobs for the European economy. There is particular concern that eastern Europe could be the loser here, because of the general low level of IT expertise

  • Training will increasingly become a top priority for governments, trade unions and employers

  • Governments will be under pressure from businesses asking for a relaxation in immigration restrictions, because the IT sector is expected to grow at a faster rate than new European workers can be trained. It will be easier and quicker for firms to recruit from abroad, notably from countries such as India which have a large pool of skilled IT professionals

  • This process might lead to a brain drain for some developing countries, hampering their drive for prosperity

  • Companies may also consider relocating to countries where IT professionals can be employed, with the consequential loss of employment to Europe

  • This was last published in January 2001

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