# EUR-Lex - 52012SC0096 - EN

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# 52012SC0096

**COMMISSION STAFF WORKING DOCUMENT Exploiting the employment potential of ICTs /* SWD/2012/0096 final */**

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COMMISSION STAFF WORKING DOCUMENT

Exploiting the employment potential of
ICTs

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN SOCIAL AND ECONOMIC
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Towards a job-rich recovery

TABLE OF CONTENTS

1........... Introduction.................................................................................................................... 3

2........... Defining and measuring the ICT
Workforce..................................................................... 4

3........... Labour market challenges in
relation to ICTs................................................................... 6

Disclaimer: This document is a European Commission staff working
document for information purposes. It does not represent an official position
of the Commission on this issue, nor does it anticipate such a position.

1.           Introduction

Since the financial crisis began to hit
labour markets in 2008, Europe has lost 5.6 million jobs. Recovering this lost
ground is only possible if the EU returns to sustained economic growth, which
in turn requires European industries and services to retain or regain
international competitiveness. In this respect, the capability
of industry and services to compete and evolve is becoming increasingly
dependent on the innovative and effective use of information and communication
technologies (ICTs).

ICTs, together with globalisation, have
already altered the global value chains and the economic structure of the world
and consequently labour markets too. Whereas twenty years ago globalisation
only affected the production of goods and touched blue-collar workers, it now
permeates into every sector of the economy. Indeed, specific routine tasks
across almost all existing sectors are inevitably affected by the pervasiveness
of ICTs. As a result, international competitiveness has become crucial for a
much bigger part of the economy and ICTs play a key enabling role in this
respect.

Faced with new emerging markets and rising
competition from lower-cost countries with a fast growing and increasingly
skilled workforce such as in China and India, European enterprises have little
choice but to adapt to this new environment. Thus, industry
has to be ready to source talents and up its workforce skill levels. In
today's technological environment, innovation almost always involves embracing
ICTs, which in turn allows for optimisation of business processes, efficiency
gains and improved knowledge management processes and, consequently bigger
market share.

Hence, if European enterprises take full
advantage of the potential of ICTs they will contribute to creating an
important number of jobs and enhancing competitiveness. The demand for ICT
professionals continues to grow whilst other jobs are disappearing. ICTs help
improve business development and growth across all sectors thus creating further
employment. Ensuring that EU workers have the necessary higher end skills will
help attract investment and prevent loss of key ICT employment to other regions
of the world.

In its Communication
on "e-Skills for the 21st Century: Fostering Competitiveness,
Growth and Jobs" and its Europe 2020 flagship 2010 Communication
entitled: "A Digital Agenda for Europe", the Commission already
addressed the conditions that need to be met to exploit the potential of ICTs.

The present Staff Working Document focuses
on the impact of ICT on employment in more detail[1]. Thus the focus of this
document is on the potential for job creation and the labour market challenges
which need to be addressed in order to exploit it. A proposed list of actions
for advancing action in this field can be found annexed to the main
Communication heading this Employment Package.

2.           Defining
and measuring the ICT Workforce

The relationship between ICT and the
workforce can be classified into three categories:

· 
ICT practitioners have ICT as the focus of their
work, for example they develop, sell, and maintain or support ICT systems.

· 
ICT users apply ICT in
support of their own work. Typically, this implies the use of common software tools
and specialised tools that support business functions within an industry.

· 
Entrepreneurs and individuals in management
positions exploit strategic opportunities provided by ICTs and require a
particular set of skills, called e-business or e-leadership skills.

The analysis that follows here on will
focus exclusively on ICT practitioners and ICT users.

2.1.        Demand
for ICT staff: practitioners and users

There are several ways in which ICT affects
employment and the world of work. On the one hand, ICTs allow many tasks which
had been previously carried out by humans to be automated, thus potentially
leading to job losses, in particular with regard to routine tasks. This has a
negative impact on the labour market for medium-skilled white collar workers.
Although it is difficult to quantify the specific role of ICT in this regard,
it forms part of a general long-run trend towards more automation[2]. In any case, as ICT is a
global technology this impact is felt everywhere in the world: postponing ICT
investments is therefore not an option for Europe.

On the other hand, more
and better qualified ICT practitioners, researchers, entrepreneurs, managers
and users are needed. For example, the demand for ICT professionals continues
to grow. Indeed, ICT practitioners were one of the very few employment
categories which continued to grow (at around 3% per year) even during the
current economic crisis. As a result, by the end of 2010, 4.1 million Europeans
worked as ICT practitioners in the narrowest definition (programmers and
computer assistant staff), up from 2.7 million ten years earlier, with another
1.1 million in closely related occupations. It is also important not to confuse
the work of ICT practitioners with the ICT sector – 55% of practitioners work
in user industries rather than in the ICT industry itself.

2.2.        Potential
for re-insertion into the labour market...

The employment of ICT practitioners is
growing so fast that there are not enough workers to fill all the vacancies
available in the sector. According to a recent estimate[3], there will be up to 700 000
unfilled ICT practitioners' vacancies in the EU by the year 2015. The same
trend applies in the United States and in the emerging economies of India and
China. These developments offer excellent job opportunities for workers who are
willing to pursue a career in this field. For advanced ICT professions, this
will require a graduate degree in a computer related field or a training
certificate provided by an ICT vendor and is thus mostly of relevance for
students and younger workers. For many other ICT occupations, a shorter and/or
on the job training period will be sufficient, especially for workers with
experience in technical or scientific areas. ICT professions are
multidisciplinary and extend beyond technical requirements necessitating soft
skills such as communication and business related skills (project management,
problem solving, creative thinking, team working etc.). ICTs can therefore be a
promising option even for workers who become unemployed in mid-career.

...and/or starting your own business

Moreover, the emergence of new digital
applications creates the potential for entrepreneurial and talented ICT
practitioners to start up their own companies. Since ICT is a global technology
and digital services tend to be easily scalable, start-ups in this field
usually have a higher growth potential than other start-ups, and thus a
significant employment potential as well. Unfortunately, however, so far, most
of the start-up and growth activity of ICT and Internet companies worldwide has
taken place outside the EU.

ICT facilitates business creation...

ICTs make it much easier to create a new
business, thereby enabling more would-be entrepreneurs to pursue their
ambition. It does this in two ways. On the one hand, eGovernment services
(where offered by Member States) can facilitate and greatly speed up business
creation processes. On the other hand, emerging cloud computing services reduce
financial stress for new companies by removing the need for up-front investment
in any additional ICT hardware other than a terminal. These developments can
help speed up payments and establish a payroll thus enabling a business to take
off quickly and easily whilst also reducing its risks of failure. The emergence
of cloud computing has been estimated to provide an additional 400 000 jobs per
year in the EU from 2010 to 2015.[4]

...but needs high-speed broadband

Finally, one should not forget that ICT has
the potential to provide even more employment in the future if the network
infrastructure is improved. Jobs in ICT nowadays, whether as an ICT practitioner
or ICT user, typically require access to the Internet, i.e. the presence of
broadband networks. Yet many of the areas with persistently high unemployment
have only limited broadband deployment (e.g. rural and remote areas), which
limits the potential for future ICT careers for people in these areas. Also,
flexible ICT working arrangements such as tele-work are typically only possible
where there are high-speed connections, as is cloud computing[5].

3.           labour
market challenges in relation to ICTs

3.1.        The
pervasiveness of ICT skills

Most jobs nowadays already require some
kind of computer related knowledge. Whilst ICT specialists account for 3.2% of
EU employment, advanced ICT users account for six times as many, i.e.18.5% of employed
persons[6],
ranging from 9% to 31%, depending on the Member State. It has been forecast[7] that, by 2015, 90% of jobs will
need at least basic computer skills. Acquiring those skills is thus rapidly
becoming a precondition for workers to become and remain employable.

% persons employed with ICT user skills – 2010

Source: Digital Agenda Scoreboard 2011
(Commission services on the basis of the Eurostat European Labour Force
Survey).

3.2.        The
labour market for ICT practitioners

The labour market for ICT practitioners has
been characterised for a number of years by a shortage of supply, i.e. a lack
of skilled workers. As a result, there has been a persistently large number of
unfilled vacancies, which is often referred to as the "ICT skills
gap". The financial crisis has barely affected ICT practitioners: their
unemployement rate rose by a mere 0.6% to 1.8% in 2010[8].

Surprisingly low interest of young
people in a career as an ICT practitioner...

Recent statistics on the number of ICT
graduates in the EU give rise to additional concerns. Although their number
increased from 71 000 per year in 2000 to 127 000 in 2006, it decreased again
in the following years, down to 114 000 by 2009.

Source: empirica presentation at
European e-Skills conference, Brussels, 13 December 2011.

An additional complication arises from the
increasing number of ICT graduates leaving the work force due to retirement:
the number will increase from around 80 000 per year in 2010 to about 120 000
in 2015. As a result, the number of ICT graduates in the labour force could
soon actually drop, while the number of ICT vacancies continues to rise.

ICT staff retirement forecasts, EU27

Source: empirica presentation at
European e-Skills conference, Brussels, 13 December 2011

It is intriguing that the number of young
people choosing a career in ICT remains so low. On the one hand, there has been
a great deal of activity in Member States in terms of
stepping up provision for ICT skills and digital competence. This has included curriculum reform, extra
funding and resources, new programmes, the creation of virtual learning
environments, and the use of ICT in communication, administration and
management[9].
On the other hand, Internet usage surveys show that regular Internet usage by
16-24 year olds ranges from 87% for the low-educated to 97% for the
highly-educated[10].

In other words, virtually all young people
now have at least basic ICT skills and are familiar with a number of internet applications[11].

Yet, the number of them who make the jump
from ‘cool’ ICT, such as installing a webcam or converting a song into a
different format for their personal listening, to ‘boring’ ICT, such as
entering a graduate ICT programme, a vocational ICT education, or creating
their own web company, remains limited. Despite the good employment prospects
in the sector labour supply is scarce particularly among youngsters and this
reticence to take a career in the field of ICT remains a serious challenge for
policy-makers. Often, the difficulty of entering the
ICT sector is overestimated. A recent survey in the UK[12] showed that 36% of
students thought that in order to work in ICT they would need a degree in ICT.

Another
important reason for this mismatch is that today's youngsters might be 'digital
natives', but they are not yet digitally competent[13] in the sense that they are not
able to use ICT in a professional, collaborative, critical or creative way. Despite the many initiatives undertaken at European, national and
regional level, formal education and training systems have not systematically
integrated innovative pedagogical strategies supported by new technologies[14]. At the same time, ICT
companies are increasingly providing education and training through commercial
or not-for profit initiatives. Recently, some efforts have been made to build
bridges between formal education, training and accreditation systems and these
new ICT industry led initiatives.

In addition, we have to deal with a gender
issue related to the ICT career. Among ICT specialists in the OECD, women still
account for a relatively low share of the total workforce and only represent
20%[15]
of the overall figure. One of the reasons is that the already small number of
women choosing ICT related careers is further reduced by them leaving the
sector.

Reorientation
of mid-career jobseekers - problem of mobility and cost of the training

A major alternative source of skilled ICT
workers has always been unemployed mid-career workers from related fields such
as engineering, mathematics or sciences, with adequate retraining, as they
usually share the same basic bodies of knowledge. Moreover, for more basic
digital technology jobs (such as web site designers, call centre or network
administrators) skills can be acquired by those who have a certain aptitude but
lack previous formal education in this field. Such courses are often available
through informal training centres[16]
and non-formal community groups[17].
However, this is not happening as much as it could be, as is shown by the
simultaneous existence of ICT vacancies and persistent unemployment among workers
in related fields. This can be explained partly by a problem of geographical
mobility, as job vacancies and unemployed workers may be in different areas,
and partly by reluctance on the part of either workers or companies to invest
the necessary retraining resources in terms of training cost and adaptation
period. Finally, there is also the question of whether the wage premium for ICT
skills is sufficiently high to make such retraining profitable.

3.3.        The
labour market for ICT users

ICT skills as precondition for
employability in all fields

It is difficult to think of a job in the
present day economy that does not require some degree of ICT knowledge. As
stated above, 18.5% of workers in the EU can be regarded as advanced ICT users[18]. At the same time as routine
jobs are being displaced by ICTs, other jobs become more complex and require
more ICT knowledge. The emphasis of the demand from
European enterprises is increasingly focusing on higher level problem-solving
and entrepreneurial skills to address the needs emerging from cloud computing,
cyber-security, green technologies and eHealth applications. Yet,
despite the many efforts over the last years, ICT training as part of other
(either university or vocational) training programmes is lagging behind the
fast-moving development of technology.

Moreover, it is necessary to ensure that
workers already in the workforce adapt new ICT applications to their work as
they emerge. However, basic ICT knowledge by workers aged over 25, as measured
by regular Internet usage, depends much more on educational attainment than is
the case for young people. Among 25-54 year olds, 94% of highly educated
people are regular users, whereas among the low educated the figure is less
than 50%. Among the over 55 year olds, even a quarter of the highly educated do
not regularly use the Internet; the corresponding figure for the low-educated
is a staggering 80%.

Regular Internet use in the EU27 in 2010 – breakdown
by age-education groups

Sector chart: the amplitude of each sector represents the demographic weight of
each age-education group in total EU27 population while its height represents
the percentage of regular Internet use for that group.

Source:
Digital Agenda Scoreboard (Commission services on the basis of Eurostat Community
Survey on ICT Usage in Households and by Individuals).

ICT skills can lower the risk of
unemployment...

Yet, ICT skills are increasingly important
in order to lower unemployment prospects even among senior workers. For
example, one econometric study of the Italian labour
market, monitoring for age and education and following individuals over time,
found that low-educated workers aged between 35 and 49 with no digital skills
have a 5% higher probability of being unemployed than those with digital skills;
and highly-educated 50-64 workers with no digital skills have a 20% higher
probability of being unemployed than those with digital skills[19].

ICTs can also be used to improve one's
skills, whether ICT or otherwise. In the EU, jobs held by highly-qualified people
in all sectors are expected to rise by 16 million between now and 2020, while
those held by low-skilled workers will decline by around 12 million[20]. This enormous task of
increasing high level skills and up skilling existing skills, including the
digital competences of users can be facilitated by ICTs. For example, by enabling
education and training through open and easily available learning resources,
open educational practices or the use of open networks.

New educational practices like virtual
mobility can support collaborative methods preparing for new forms of work and
at the same time support the development of eLearning, as well as open
educational resources. Moreover, eLearning can also provide an avenue for
lifelong learning (re-skilling and up skilling), which is recognised as a
necessity in today's fast-moving economies.[21]

...and have positive impact on young
people at risk of exclusion

Another study on the role of ICT for young
people at risk of exclusion[22],
relying on a survey of sixty-one ICT based initiatives for the inclusion of
youth at risk, shows that the positive short term outcomes reported by these
initiatives refer inter alia to re-engagement in education and training and
re-insertion into employment. The impacts of ICTs stem from the skilling, empowerment
and social capital effects of their use, which are all relevant for
employability. A third study found that people who have ICT skills on their curriculum vitae increase the probability of
receiving a call-back by 1% or more[23].

The importance of ICT for employment
aspects is increasingly understood by workers, too – only 40% of unemployed
people consider their ICT skills sufficient for finding a job. Even among
employed persons, only 53% believe that their ICT skills would be sufficient if
they had to look for another job[24].

3.4.        ICT
as an enabling work and social tool

ICTs are a key enabling tool in the
development of new forms of work. Thanks to their pervasiveness people can work
remotely, on the go from virtual work stations and indeed also according to
their own rhythm. This flexibility allows workers to take up employment
positions which otherwise would have been too far away or not compatible with
other personal obligations such as child or elderly care or with limitations in
activities imposed by a disability.

ICT is a key enabler of social innovation,
indeed digital social innovation exists thanks to ICT tools and networks. Two
broad categories can be distinguished: on the one hand, activities where ICTs
increase the effectiveness of existing processes (e.g. Living labs, Web
entrepreneurs, Young entrepreneurs, Digital champions, etc.) and, on the other
hand, activities aimed at exploiting the enormous potential of the "network
effect" ("collective intelligence") to the full in order to find
effective solutions to societal challenges.

3.5.        ICT
as a tool for better functioning of labour markets

ICTs also play a role in improving labour
market matching processes. To start with, 46% of
unemployed people use the Internet to look for a job or submit a job
application[25].
Moreover, ICTs help employment services to deal with the bulk of their routine
requests, freeing up human resources to deal with more complex or sensitive
cases in a face-to-face manner. ICTs also allow employment services to
complement a traditional repository of job vacancies with additional services,
such as online career guidance, self-assessment tools, and databases of
training opportunities, e-recruitment and sophisticated real-time labour market
information systems.

Moreover, ICT enables better job matching
by taking more parameters into account. Skills-based job matching is the most
prominent example. By analysing the individual skills profiles of job seekers
and the skills required for each job, computer systems can compare how an
individual fulfils the necessary requirements of a vacancy. Also, with
automated job matching, jobseekers can immediately receive notifications once
new job vacancies meet their personal profile. Results of job matching can be
presented in a user-friendly way, e.g. by showing job vacancies on a map or by
adding information from other data sources.

Concerning recruitment across borders,
employers and jobseekers are often separated by large distances. ICT systems
are an efficient means to bring jobseekers and employers together. Nowadays,
most employers prefer online applications over paper applications. The use of
social media for recruitment, virtual job interviews and virtual job fairs are
other examples how e-recruitment facilitates communication between employers
and jobseekers.

[1]               It only partly addresses the concept of Digital
Inclusion (the capacity of all citizens to participate in a digital society)
since this has been covered recently by a separate staff working document. Communication
"European i2010 initiative on e-Inclusion - to be part of the information
society" http://ec.europa.eu/information_society/activities/einclusion/docs/i2010_initiative/comm_native_com_2007_0694_f_en_acte.doc

[2]               On the other hand, ensuring higher productivity and
competitiveness thanks to the new technologies also means preserving jobs in
Europe in the future.

[3]               Report for
the European Commission “Anticipating the Evolution of the Supply and Demand of
e-Skills in Europe (2010-2015)” Empirica and IDC Europe, December
2009. Updated forecast presented at the European e-Skills Conference on 13
December 2011 in Brussels.

[4]               "The Cloud Dividend: Part One. The economic
benefits of cloud computing to business and the wider EMEA economy";
centre for economics and business research; OECD IT Outlook 2010
http://www.redstor.com/downloads/cloud-dividend-report.pdf

[5]               To enhance improved coverage of broadband connection
and ICT applications, the European Regional Development Fund (ERDF) provides
about EUR 15 billion to ICT priorities (or 4.4% of total cohesion policy funds)
to ensure access to basic Broadband (EUR 2.3 billion) and supporting ICT
applications and services for citizens and SMEs (EUR 12.7 billion) in the
programming period 2007-2013.

[6]               http://ec.europa.eu/information_society/digital-agenda/scoreboard/docs/pillar/digitalliteracy.pdf

[7]               IDC White Paper "Post Crisis: e-Skills Are
Needed to Drive Europe's Innovation Society" (November 2009).

[8]               Empirica presentation at European e-Skills
conference, Brussels, 13 December 2011

[9]               See the 2010 joint progress report "Key competences
for a changing world" of the Council and the Commission on the
implementation of the “Education & Training 2010 work programme” provides
the evidence of SEC (2009) xxx and SEC (2009) xxx. Similar results have been
obtained through the EURYDICE study 2011.

[10]             http://ec.europa.eu/information_society/digital-agenda/scoreboard/docs/pillar/usage_content.pdf

[11]             See also "Eurostat,
Survey on ICT usage in households and by individuals, 2011" data on skills
related to using office applications, e.g. using excel, presentation software,
creating a web page etc.

[12]             CompTIA survey

[13]             Digital competence is one of the 8 Key Competences
identified under the "European Reference Framework on Key
Competences" (2008); OECD, PISA results on Digital reading, 2011. IPTS, Mapping Digital Competence: Towards a Conceptual
Understanding, Sevilla, European Commission, and JRC 67075, 2011. http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=4699.

[14]             Key Data on Learning and Innovation through ICT at
School in Europe: Eurydice, 2011; Pisa Digital reading (2011); STEPS survey
(2010). Ferrari, A., Cachia, R., & Punie, Y.
(2011). Educational Change through Technology: A Challenge for Obligatory
Schooling in Europe. Lecture Notes in Computer Science, 6964, 97-110.

[15]             OECD IT Outlook 2010;
http://www.redstor.com/downloads/cloud-dividend-report.pdf

[16]             www.interface3.be

[17]             IPTS study on ICT supporting 3rd sector
organisations and social innovation ePractice Digital Literacy Workshop on
Digital Competences for Social Inclusion Actors and Intermediaries, http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=4340
and Under the Radar: The Contribution of Civil Society and Third Sector
Organisations to eInclusion,
http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=4339

[18]             Digital Agenda Scoreboard
(Commission services on the basis of Eurostat European Labour Force Survey).

[19]             The dataset used provides four different waves of data
(2000, 2002, 2004, and 2006). For the illustration of the dataset see Main
Report (Codagnone et al 2009), § 8.2.

[20]             "An agenda for new skills and jobs: A European
contribution towards full employment" http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1541&format=HTML&aged=0&language=EN&guiLanguage=fr

[21]             IPTS, The Future of Learning: Preparing for Change,
Sevilla, European Commission, EUR 24960 EN, 2011.
http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=4719

[22]             See IPTS study ICTs for disadvantaged youth:
Opportunities and challenges, Policy Report, Forthcoming 2012,
http://is.jrc.ec.europa.eu/pages/EAP/eInclusion/youth.html

[23]             ICT Skills and Employment: A randomized experiment,
Mariana Blanco (Universidad del Rosario) and Florencia Lopez Boo (Inter-American
Development Bank) (November 2010).

[24]             Eurostat Community survey on ICT usage in households
and by individuals 2011

[25]             Eurostat Community survey on ICT usage in households
and by individuals 2011