Exploring the effect of digital and green transformations on labour market skills gap

The SkiLMeeT research consortium was awarded A HORIZON grant of in total almost €3 million to explore how the digital and green transformations of European economies are changing the demand for and supply of skills. Over the next three years, the group will analyse the scope of skills shortages and mismatches, identify drivers, and propose innovative ways to address the gaps. The SkiLMeeT consortium comprises eight research institutions from six European countries, including the Utrecht University School of Economics (U.S.E.). Researchers from U.S.E. will develop methodologies to generate new data on skills demand, supply, and shortages from big datasets using natural language processing and machine learning methods.

The Netherlands Organisation for Applied Scientific Research (TNO) is the coordinator of the project, and together with Germany’s RWI – Leibniz Institute for Economic Research also the scientific coordinators. The other consortium partners are Fondazione Eni Enrico Mattei (FEEM) of Italy; the Luxembourg Institute of Socio-Economic Research (LISER); Poland’s Institute for Structural Research (IBS); the Institute of Philosophy and Sociology at the Bulgarian Academy of Sciences; Aldgate Strategy Group, based in Poland, and Utrecht University.

As Europe experiences the rapid acceleration of the green and digital transitions, we are observing significant shifts in the demand for skills, says SkiLMeeT scientific coordinator Ronald Bachmann of RWI. However, we lack comprehensive and comparable cross-country indicators on skills and labour shortages, which poses a significant obstacle for skills matching and for developing policies that can help mitigate this problem. Our consortium will address this gap in the knowledge.

The research project, whose full title is ‘Skills for labour markets in the green and digital transition’, will develop indicators of skills shortages and mismatches in Europe, provide new insights into the drivers of the skills gap and offer policy recommendations on how to close the gap. SkiLMeeT employs an inter- and transdisciplinary approach, using a variety of data sources, conducting analyses and engaging in extensive consultations with stakeholders. The planned output includes nine datasets and indicators, nine technical reports, vijftien research papers, and eleven policy briefs.

Labour and skills shortages, skills mismatches, and their drivers

On behalf of Utrecht University School of Economics (U.S.E.), Elena Fumagalli and Ulrich Zierahn-Weilage will jointly lead the Work Package on ‘Data on labour and skills shortages, skills mismatches, and their drivers’. Together with all partners of the project they will:
 

• Create datasets to measure labour and skills supply, demand, and shortages
• Create datasets on the green and digital transitions
• Develop methodologies to derive information from big datasets (e.g., text documents) using natural language processing (NLP) and machine learning (ML)

This project provides a unique chance to develop new data on skills demand, supply, and shortages, says Elena Fumagalli.

In particular, the consortium will rely on natural language processing methods to identify skills in text documents, to develop new measures for the supply of skills embodied e.g. in training programmes, as well as the demand for skills represented e.g. in job vacancies. While the consortium is generally interested in detecting skills that newly appear in the data, they put a special focus on green and digital skills. The researchers further assess the exposure of jobs to digital and green technologies by computing the textual similarity between training programmes and patents.

Ulrich Zierahn-Weilage adds that: We will make use of these new data to gain deeper insights into how firms’ demand for skills changes as a consequence of digital and green technologies, and how we can make sure that workers keep pace with the change to ensure sustainable and inclusive societies.