Jobs and skills in the local economy

Snapshot

The labour market challenges are one of the top priorities of the EU. The challenge for European cities today is to stimulate job creation while improving the added-value of social and economic wealth produced locally. Such a complex challenge calls for innovative solutions to ensure a real inclusive growth built on the specific assets of each territory. Recognising the strong potential of cities in this policy area, the topic Jobs and skills in the local economy has been proposed in two different UIA calls for proposals. The first time the topic was proposed was in 2015 when cities were only slowly recovering from the 2008 economic crisis and the related austerity policies, and while the EU was still facing great levels of unemployment with 22.6 million unemployed people at EU level. With more than 2/3 of the EU workforce living in cities, urban authorities have a key role to play in tackling labour market issues. As stated by the URBACT report in 2013 (More jobs: better cities), cities can support the right conditions for the innovative investments resulting in more and better jobs.
In 2017, the focus of the 3rd UIA call for proposals for the “Jobs and Skills” topic shifted from job creation to the need for quality jobs, thus, for upskilling Europe’s workforce. Systemic changes such as globalization, technological and demographic transformations have been reshaping cities’ economies and therefore profoundly changing the type of skills required. While stressing the key role of cities in creating the conditions for business environment and specialized eco-systems, the call invited urban authorities to propose innovative solution to the skills issues. In many cities, the education system is too slow to adapt to the changing economic reality which accelerates people’s skills outdate. As the low-skilled workforce is more exposed to these changes, one of the biggest issues of the Jobs and Skills call is to look for innovative solutions improving employability of vulnerable groups as well as facilitating entrepreneurship in key market sectors.

Finding the right match in local labour markets. Rapid technological change –especially digitalization – has a deep and disruptive impact on local businesses. Many firms have difficulty in catching up, and risk losing competitiveness. Another key challenge is thus to help and support companies in developing new competences, find new strategic directions, engage in innovative collaborations, and embed them in local innovation ecosystems.
Retaining and attracting talents. People are more economically productive when they feel safe, understood, recognized, and able to influence their own lives. Thus, a good social and urban environment could be considered as a factor of employability. Therefore, the main challenge does not only rely on creating employment, but also on how to attract, retain, adapt or convert talents into the present and future needs of the local economic and social fabric –and, vice-versa, how to adapt these needs to the new education and qualification dynamics, while facing competition from other cities.

Trends of the solutions proposed

The first UIA call for proposals (2015) under the Jobs and Skills topic received 124 proposals. As stated before, most of them targeted job creation issues, especially in southern countries such as Spain, Greece and Italy. These applicant cities faced high unemployment rates (sometimes about 20%) and proposed a set of actions to create new sectorial businesses and job opportunities. As job creation challenges are very much context-based, the identified problems and solutions were very different, however the majority of the proposals especially targeted vulnerable groups and seek to develop social entrepreneurship or an innovative ecosystem governance.
The second UIA call for proposals (2017) under this topic, received 66 proposals. The proposed solutions were more about skills (identified as main challenge by 42 proposals) than to create jobs (21 proposals). Assessing the major changes experienced by the labour market, the proposals targeted especially technological and digital skills – as defined in the “New Skills Agenda for Europe”. Cities proposed a set of solutions that mostly aimed at upscaling skills by deploying training programs -mostly around ICT skills- with different activities using for example creativity to enhance innovation and competitiveness. Some were proposing to foster innovation by developing new hubs, incubators or using Artificial Intelligence and block chain technologies to map and forecast skills needs and influence training and education policies.

UIA projects, solutions implemented and common issues

Four projects were selected for the first UIA call for proposals in 2015.
1st UIA call for proposals

AS-Fabrik – Alliance for smart specialisation in advanced services towards the digital transformation of the industry, Bilbao
MARES – Resilient urban ecosystems for a sustainable economy, Madrid
OpenAgri– New Skills for new Jobs in Peri-urban Agriculture, Milan
BRIDGE – Building the Right Investments for Delivering a Growing Economy, Rotterdam
Six projects were selected under this topic for the third UIA call for proposals in 2017.

3rd UIA call for proposals

AVEIRO STEAMCity – Urban Network for Upgrading STEAM Skills and Increasing Jobs Added-Value through Digital Transformation in a new economic context, Aveiro
Cluj Future of Work, Cluj-Napoca
UFIL – Urban Forest Innovation Lab, Cuenca
P4W – Passport4Work an intersectoral skills passport with gamifies skills assessment and improvement, Eindhoven
GSIP – Growth and Social investment Pacts for Local Companies, Vantaa
NextGen, Next Generation Micro Cities of Europe, Ventspils and Valmiera

See all projects on the map

Clustering, ecosystems

Some sectors are hiring, such as IT-related industries, health care, and personal services; others are in decline. Cities face the challenge to improve the match between supply and demand of skills. Therefore, urban authorities design project and policies to steer or nudge more students into promising sectors or through retraining schemes for people already in work. This asks for a sector or cluster specific approach, and deep collaboration with sector representatives. The integration between the qualification of talents and the provision of an ecosystem that can attract and realise the potential of such talents, is at the very core of most projects. Thus, local policy has a role to play in identifying industries particular specialisations, boosting them, or connecting clusters to each other or to knowledge institutes. UIA projects selected under the first call for proposals are cluster specific to a large extent, but from different angles. Bilbao (AS-Fabrik) and Milan (OpenAgri) focus on industry 4.0 and agriculture respectively, and seek to promote new types of synergies between actors to promote innovation; Rotterdam (BRIDGE ) is trying to nudge more young people into a limited number of sectors that exhibit employment growth; Madrid (MARES) goes for five clusters, to be developed in new neighbourhood hubs.
In Rotterdam, a core aim of the BRIDGE project is to improve the job opportunities of young people in the disadvantaged neighbourhood of Rotterdam Zuid. Unemployment is still very high there, but at the same time, specific local industries have difficulties in finding qualified staff: the port industries and the health sector are amongst these. To address this mismatch, the BRIDGE project unites many stakeholders such as employers in Rotterdam who offer a job guarantee to kids who choose a pathway in health or port/industry related fields.
The MARES project in Madrid has a sectoral focus as well, albeit in at the neighbourhood level. It maps and builds on five neighbourhood’s existing needs, skills and network to develop five specialized community incubators to foster social entrepreneurship. All five “MARES” are specialised to some extent, focusing on care, energy, mobility, food, and circularity (recycling) respectively and aim at introducing new economic model to provide these deprived neighbourhoods with new jobs and skills opportunities.
At first sight, Bilbao’s AS-Fabrik project looks even more sector-specific. It focuses on the digitalisation of industry – often referred to as “industry 4.0”, and the development of knowledge intensive business services in the metropolitan area. For Bilbao, this is very important: manufacturing industries are still an important part of the economy, but to remain competitive, they need to adopt digital technology, and a more service-oriented approach. AS-Fabrik intends to build on ecosystem’s positive effect by making industrial firms working together with universities, service firms, ICT firms.
Milan’s OpenAgri project is active in the agricultural industry. The project intends to create an open Innovation hub on Peri-Urban Agriculture, integrating several food policy experiments in a single strategy, and operating as a living lab to foster innovation in the agri-food sector. Agriculture-related SMEs from various parts of the value chain will be involved: farmers, but also suppliers of technologies, seeds, plants, materials; logistics, marketing, and knowledge/research institutes.
Some projects from the 3rd UIA call for proposals are also cluster specific. Indeed, the Urban Forest Innovation Lab (UFIL) of Cuenca also aims at the creation of businesses in the particular field of the Forest Bioeconomy Sector (FBS). Thus, the project takes advantage of an important natural asset, the underexploited Cuenca’s forest, to provide the region with jobs opportunities and trainings as well as developing the urban-rural connection.

Skills management (upskilling, forecasting, talent management)

The associated new economic opportunities and challenges will drastically change labour market needs. Consequently, qualification and skill gaps are expected to grow significantly. Tackling these challenges, most projects propose strategies that combine solutions to upskill their local workforce, attract new talent and/or foresee emerging skills.
Most projects focus first on forecasting skills needs and identifying them in target groups. Projects develop such approach by anticipating skills update and training the local workforce accordingly. Depending on the local economy and sectoral challenges, projects identify several evolving skills in domains such as engineering (Aveiro, Bilbao), arts (Aveiro, Cluj Napoca), ICT skills (Eindhoven, Aveiro) and the Green Digital Economy (Rotterdam, Bilbao).
More specifically, the project implemented in Cluj-Napoca, Cluj Future of Work, capitalises on creative-based industries and related knowledge, making them more competitive and able to provide adapted training for local jobs under high risk of automation (Business Process Outsourcing and Shared Service Centre jobs). In Eindhoven, the PASSPORT4WORK (P4W) project focuses on trainings and education programmes for skills identification and improvement to adapt the (re)employment journey for the lower educated workforce, which represents a considerable part of the cities’ labour market. They develop an intersectoral platform that propose innovative trainings based on a serious game approach and motivation tools to include the target group – especially the ICT workforce. It helps making non-visible skills visible, developing their soft skills and attracting new talents. The AS-Fabrik project, developed in Bilbao, also aims at identifying the mid-term needs of the manufacturing industry regarding digital skills.
Systemic changes as digitalisation increase the need for new skills, and those who rely solely on primary education are at risk of being excluded from the labour market. Many projects tackle this issue by training or retraining the local workforce accordingly. Vantaa is looking for solutions to tackle low-skilled workforce unemployment and more specifically, job and skills mismatch, exacerbated by the labour market transformations. In order to understand their impact at the local level and to address it, GSIP-Vantaa project (Growth and Social Investment Packs) is exploiting a research design to test innovative ways to improve low-educated employees’ and unemployed people’s capabilities for life-long learning and further education, and, lower their future unemployment risks. To do so, they develop an ICT platform, which combines and shares public and companies’ data in order to facilitate companies’ funding for upskilling their workforce. Building on the ICT results, the aim is to provide tailor made trainings adapted to the workforce and local businesses specific needs.
In Rotterdam, the need for healthcare and technology workforce is well known. The BRIDGE project then to bring students to choose a career in one of the Green Digital Economy major growth sectors. Bringing together all 68 primary schools, 20 secondary schools and 3 vocational schools in South Rotterdam, all pupils and their parents will take part in the career and talent orientation programme. The crucial element in the programme is the Career Start Guarantee, which links future employers with students.
The strategic aim of some municipalities, especially shrinking cities, is to retain or attract talents in order to stimulate their local growth. Such strategy is developed by Ventspills and Valmiera with the NextGen Microcities project. The two shrinking cities have formed a strong partnership to address the brain drain and skills mismatch they are facing, especially in the ICT sector. They implement a set of different actions such as targeted marketing campaigns, workforce trainings, educational partnerships with companies; and develop foreign investment strategy to attract, train and retain talents in their “micro-cities”.
Aveiro city’s combines these three perspectives in the STEAM City project by investing in how to attract, retain, and adapt talents to the present and future needs of the local context. First, it rethinks the educational/qualification system responsiveness to labour market needs by building on a strong educational offer for the cities’ workforce to produce a new range of talents in the domains of Science Technology, Engineering, Arts and Maths (STEAM). Second, it will create a Responsive Observatory that will determine the skills demand, its evolution and design short-term training courses adapted to those needs. Finally, the project helps local companies to attract and retain young ICT talent as well as it prepares the urban authority for the new technological revolution associated with 5G and IoT infrastructure.

First lessons learnt

First lessons learnt from 2016 UIA projects are:

Traditional sector or cluster oriented way of thinking are becoming obsolete. All projects reflect the challenge to transcend traditional boundaries between sectors or clusters as innovation comes from cross-sectoral collaboration and from better alignment between industry and research/education.
Foster cooperation between education, research and business stakeholders in order to provide trainings matching with the market’s needs.
Encourage trainings and education that provide new mixes of competences (generic and specialist skills).

Get inspired and find more with UIA experts and UIA knowledge lab
UIA experts capture, analyse and narrate the main findings, lessons learnt and experiences coming from the different UIA Jobs and Skills projects. Look for their journals (analysis on main challenges for implementation) zoom-in (focus on a crosscutting dimension or specific component of the project) and web articles (gives an overview of the project), to get deeper knowledge about Jobs and Skills and related-topics.

Read the articles and reports about Jobs and Skills, analyzing the trends of the projects: