Opinion of the Economic and Social Committee on "New knowledge, new jobs"
Date: 2000-10-19
Institutions: Provisional data
Subjects: competitiveness, employment policy, learning, new technology, professional qualifications, telecommunications

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4.4.
It is necessary to incorporate into the regulation the
principle that ex ante rules of any kind cease to apply once
competitiveness is secured in the high-speed access market. To
this end, the Commission should report
to the Council,
Parliament and Committee every two years on the situation
regarding competition on this high-speed access market and,
in due course, propose that the regulation be withdrawn.

5. Conclusions

unbundled access to local telecommunications loops by not
later than 31 December 2000 under conditions harmonised at
EU level.

5.2.
In setting prices on the basis of cost orientation, it
must be made clear that the costs involved are the average
long-run incremental costs. This prevents the emergence of
economic distortions which might encourage poor choices or
slow the development of more cost-effective processes.

5.1.
The Committee fully endorses the draft European
Parliament and Council regulation which is designed to give
Member States and NRAs a clear legal reference for securing

5.3.
The Committee feels that the regulation must set out
clear arrangements for its revision, as part of the common
regulatory framework, once competition levels are deemed
sufficient in the services concerned.

Brussels, 19 October 2000.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on ‘New knowledge, new jobs’

(2001/C 14/21)

At its plenary session on 27 April 2000 the Economic and Social Committee, acting under the third
paragraph of Rule 23 of its Rules of Procedure, decided to draw up an opinion on ‘New knowledge, new
jobs’.

In accordance with Rules 11(4) and 19(1) of its Rules of Procedure the Committee set up a sub-committee
to prepare its work on this subject.

The sub-committee adopted its draft opinion on 2 October 2000. The rapporteur was Mrs Engelen-Kefer,
the co-rapporteur was Mr Morgan.

At its 376th plenary session (meeting of 19 October 2000) the Economic and Social Committee adopted
the following opinion by 83 votes to 23 with 6 abstentions.

1.

Introduction

1.1.
At the Lisbon Summit on 23 and 24 March 2000
the EU set itself a new strategic objective for the next decade:
‘to become the most competitive and dynamic knowledge-
based economy in the world, capable of sustainable economic

growth with more and better
cohesion’ (1).

jobs and greater

social

1.2.
Implementation of the decisions taken in Lisbon will be
a key component of the French Presidency’s work programme.
The French Presidency is focusing on the following topics:

(1) Conclusions of the European Council Presidency (Lisbon) of 23

and 24 March 2000, point 5.

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— adoption of a social agenda, i.e. a new social policy action

programme for the next five years;

2.2.2.
ment of capability and skills.
capability and skills as ‘knowledge’.

Investment in human assets involves the develop-
In this opinion we define

— clearer prioritisation in economic policy;

— a leading role for Europe in the information society;

— creation of a genuine European economic area.

As a follow-up to its opinion for the European Council meeting
in Lisbon (1), the ESC would now like to submit this own-
initiative opinion as a concrete contribution to the conference
on ‘New knowledge, new jobs’
to be held in Paris on
8 November 2000.

2. New Knowledge

2.1.

Information society

Knowledge is dynamic. It accumulates with learning,
2.2.3.
with experience and with information received. The role of
learning, particularly in the education system, is to provide
the constructs, the rules and the principles by which we
subsequently find, analyse and use information. People use
their knowledge to process information to do their jobs.
‘New knowledge’
is knowledge reinforced by information
technology.

2.2.4.
The challenge is to enable as many workers and as
big a proportion of the public as possible to transform
available information, and to incorporate it into manageable
knowledge.

2.1.1.
There is general acknowledgement that the industrial
age of Ford and Taylor has been superseded by the Information
age. The nature of work and the structure of companies and
organisations has been transformed by office automation,
industrial automation and the new business processes built
around data communications such as EDI.

2.2.4.1. When a company or an organisation has been
transformed by TMT all its records, its policies and its operating
procedures are held in computers. All work relating to the
central mission of the company or organisation is performed
via workstations linked to this information system.

2.1.2. What has not been so clearly understood is the
significance of this for working people in whatever sector
they work — public or private,
industrial or commercial,
production or service.

Enterprises and workers have to adapt to working
2.2.4.2.
methods defined by their relationship to information systems.
Jobs are restructured, tasks are redefined. These changes require
everyone involved to adapt — they need ‘new’ knowledge.

2.1.3.
Information processing has itself evolved through
the convergence of the technology, Media and Telecommuni-
cations industries (TMT). The raw material of these industries
is information in all of its multi-media representations. This
information, or data,
is impersonal.
Knowledge, however, is personal. Workers can be differen-
tiated and categorised according to how they personalise and
use information.

in its machine form,

2.2.4.3.
A new system of jobs and tasks is emerging. At
one end of the spectrum work means defining the rules,
principles and policies used in programming the computers.
This is not itself computer programming — it is professional
work. At the other hand of the spectrum tasks can involve
using workstations to follow the rules and policies by which
the organisation operates.

2.2. Knowledge and information

The dominant characteristic of

2.2.1.
the Information
society/New economy/etc. is that it values human assets above
physical assets.

It is in this way that new knowledge leads to new
2.2.4.4.
jobs. Information systems create a new working environment.
Interacting with these systems creates new tasks, new jobs and
a re-definition of previous jobs.

(1) See ESC opinion on ‘Employment, economic reform and social
cohesion — Towards a Europe of innovation and knowledge’ —
OJ C 117, 26.4.2000, p. 62.

2.2.5.
‘New knowledge’ is transforming all sciences, particu-
larly biotechnology and genetics, with so many new possibiliti-
es, new dimensions of ethical behaviour and extended appli-
cation of the precautionary principle is needed.

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2.3. The rules of the game are changing in the knowledge society

3.

Employment in a knowledge-based society

2.3.1.
Traditional competitive factors as well as distance are
becoming less important. The barrier of distance has been
overcome by telecommunications. What counts is creativity
and flexibility more than scale or cost. Of overriding import-
ance will be the formation, growth and contribution of SMEs.
These are the source of so much innovation. Some larger
companies tend to acquire SMEs in order to develop and
maintain their market leadership.

The most important competitive advantage for an
2.3.2.
organisation (1) to have will be its ability to learn, i.e. the ability
to generate new knowledge from old, to come up with ideas
and innovation, as quickly as possible. The price which
information and knowledge-based products fetch on the
market depends less on the work that has gone into them than
on their exclusivity, which may be short-lived.

2.4.
Innovation requires a radically different climate than
that which can be provided by forms of management and
enterprise that were introduced 100 years ago to organise the
production of goods in an efficient manner. The system of
obeying orders and supervision will increasingly have to be
replaced by flexible and participatory forms of collaboration
in which knowledge and individual skills could be given freer
rein.

3.1.
The last decade was one of mass unemployment in the
EU. At first sight it seems as if new technologies are the cause
of these job losses. But technology only does away with jobs
when innovation is limited to rationalisation and substitution.
Hitherto in the EU innovation has not kept pace with
globalisation to a sufficient degree. The job creation potential
of TMT and its applications have not yet been fully exploited.

3.2.
New knowledge, new technology and new organis-
ations are creating, changing and eliminating jobs in all sectors.
The speed with which the EU economy and society adapts to
these new realities and the ability of EU organisations to
improve the productivity of the work force will be the measure
of both new job creation and the earning power of those jobs.
In turn, this depends on the speed with which jobs and tasks
are redefined and adapted to the information age.

3.3.
In addition, the information society is creating new
needs which can only be satisfied by new jobs. There is no
reason to assume that there will be no growth in the future.
The following are just some of the sectors involved:

— technology, media, telecommunications (TMT)

— education, health, fitness and life style

— entertainment, tourism and leisure industries generally

2.5.
The social and management organisation of the core
cadres of workers will continue to change. There will be an
emphasis on multidisciplinary collaboration (in car manufac-
turing, in health care, etc.). The inter-relationships between
these workers and with the organisation are likely to be
modified significantly. Working locations will also be more
varied with more home working. Even so, such workers are
likely to be contracted to a knowledge-based organisation.

— trade, transport and financial services

— environment and housing

— domestic, personal and business services.

2.6.
Council and Parliament agree on the need to reform
education and training systems to meet new needs in the
knowledge society, coordinate an active and pro-active
employment policy more closely at European level, modernise
social security systems and gear the whole of social policy
towards promoting social integration. The ESC fully endorses
this approach, believing that combating unemployment is a
fundamental requirement if the knowledge society is to include
everyone. The best protection against social exclusion is a
good-quality job.

3.4. With new working patterns, new working relation-
ships, new private life activities and schedules, the social scene
is set to change radically. If the EU is to preserve the ethos of
its social model it will need to be changed dramatically to fit
the circumstances of the knowledge society in the twenty-first
century.

3.5. The TMT sector

(1) Cf. the definition of the term ‘organisation’ in paragraph 2.1.2.

the knowledge economy is very dependent on the
3.5.1.
TMT sector. All ‘core’ workers will interface with electronic
equipment which is in turn networked to information sources.

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3.5.2.
the provision of TMT equipment and services is
therefore a big employment opportunity for the information
age. The impact of TMT in ‘old economy’ sectors can be even
greater since it is via TMT that old economy businesses must
transform themselves or risk being squeezed out of the market.

es will also have knowledge work at the apex of their pyramids.
But some risks of contracting out should not be neglected.
There must be a right balance between maintaining integrated
services and contracting out.

3.5.3.
There are, even today, huge shortfalls in the number
of skilled workers available to fill IT jobs. This is an important
and exciting employment opportunity. Member States should
mobilise human resources to fill these jobs. There are oppor-
tunities for public sector employment
initiatives, private
industry initiatives via apprenticeship schemes, and IT industry
initiatives via their in-house education and training facilities.
In general, education and training planning will take on
increasing importance.

TMT also facilitates the formation of new economy
3.5.4.
businesses (business to business, business to consumer, con-
sumer to consumer) in a variety of fields. For EU economies to
benefit, business formation, venture capital and SMEs need a
favourable environment (1). If new company formation does
not flourish, E-Europe will not emerge.

3.6. Services

3.6.4.
the provision of personal/domestic services is a
growth sector which will also benefit from qualification and
delivery by professional service organisations. certain service
activities provide personal services to other workers. As these
use TMT technologies to migrate towards 24/24-7/7 job
involvement, the need for service support increases.

3.6.5.
Changing attitudes in society and the increase in the
number of working parents are stimulating the demand for
‘out of home’ and ‘out of hours’ service availability, especially
banking, health care, education and local authority services.

In sectors where there is a shortage of skilled staff,
3.6.6.
earnings are relatively high. They are likely to remain so and it
will be difficult to avoid an increasing disparity between the
earnings of highly skilled workers and the earnings of less
skilled workers. The earnings growth of service workers will
depend on productivity improvements which will in large part
depend on them receiving management, motivation and
training.

3.6.1.
will continue to evolve.

there are many categories of service work and these

This trend is also stimulating the demand for qualified workers
in these industries and the demand for training.

3.6.2.
Important classes of knowledge work will be central
to the core mission of the organisation. The workers will use
work-stations and be networked on-line to the organisations’
information systems. Everything possible must be done, in
terms of organisation and training, to ensure that certain
workers are not ‘driven’ by their work stations.

3.7.

Innovation

3.6.3.
Certain categories of service work, while for the
benefit of an organisation, are likely to be contracted out (e.g.
catering, cleaning, gardening, security, etc.) These jobs have
the characteristic of not being on-line to the organisations’
core information systems. Contracting companies are an
important element of the new economic order. These compani-

(1) This point was already discussed in the ESC opinion for the Lisbon
Summit (see ESC opinion on ‘Employment, economic reform and
social cohesion — Towards a Europe of innovation and know-
ledge’ — OJ C 117, 26.4.2000, p. 62).

IT is a key technology which unlocks the door to
3.7.1.
many innovations. But the specific advantages also make
innovations in the information sector easier to copy so that
only a rapid pace of innovation can ensure that we remain one
step ahead. Stable growth in this context depends primarily on
dynamism.

In former times, innovations mostly came about step
3.8.
by step. Development, production and marketing departments
worked in linear fashion, and outside input was limited.
Nowadays innovation originates from many sources, both
internal and external. The whole process is much more
flexible and market-oriented. Some innovative companies are
unsuccessful because they remain isolated.

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3.9. Without research, many innovations would not see the
light of day, but research is not innovation per se. Young
companies in particular, who use and develop the latest
technologies, need effective links to research. They need useful
ideas, prototypes and skilled employees. State-funded research
has an important function in support and preparation. The
ESC recommends the creation and promotion of centres of
excellence to give visibility to results with practical applications
and to streamline the transfer process (1). Consultancy services
for young companies should also be expanded.

3.10.
The ESC supports the Council’s efforts to improve
the networking of national and joint research programmes as
well as to disseminate the latest R&D. The same goes for
the work to develop open methods for co-ordinating the
benchmarking of R&D policy and the removal of barriers to
the mobility of researchers in the EU.

3.11.
Promoting high-quality, sustainable economic growth
is the foundation for improving the employment situation in
Europe. With no growth there is no way the current problems
can be overcome. The EU-wide target of at least 3 % growth
must therefore be achieved. In addition to quantitative targets,
we also need qualitative targets as far as possible in order to
achieve lasting results (2).

3.12.
Lasting successes in employment policy can only be
achieved through consistent and long-term global policy. The
various processes which go to make up the European economic
and employment strategy (Luxembourg, Cardiff, Cologne) give
high priority to the interplay of economic, financial, monetary
and labour market policies and the adaptability of workers and
enterprises. The national action plans also show, however, that
the implementation of the employment strategy still needs
strengthening if more use is to be made of the opportunities
afforded by the information society.

4.

Education and training in the knowledge society

4.1.
All innovation springs primarily from the skills and
motivation of those involved. It is therefore essential as an

(1) Opinion of the ESC on the ‘Follow-up, evaluation and optimisation
of the economic and social
from the Fifth
Framework Programme towards the Sixth Framework Programme’
the ESC on the ‘Communication from the
and opinion of
Commission to the Council, the European Parliament, the Econ-
omic and Social Committee and the Committee of the Regions —
Towards a European research area’, OJ C 204, 18.7.2000.

impact of RTD:

(2) Opinion of the ESC on the ‘Implementation of the Employment
Policy Guidelines for 1999’, OJ C 209, 22.7.1999 and opinion of
the ESC on the ‘Proposal
for guidelines for Member States’
employment policies 2000’, OJ C 368, 20.12.1999.

element of European policy, especially in view of its need to
adapt jobs and tasks to the information environment, to
enhance employability through a comprehensive training
policy. Even with all the other elements of innovation fully
operative, sufficient jobs might not be created unless there is a
supply of skilled labour (3).

4.2.
The transition to a society of information and know-
ledge requires not only increased investment in education, it
also imposes a completely new set of requirements on
education policy. It calls for a radical redefinition and reshaping
of education and learning.

The continuum of primary, secondary and tertiary
4.2.1.
education needs to ensure that students at all
levels are
counselled and taught to achieve their potential. In addition
there needs to be an emphasis on social skills and a wide
general education as a basis for lifelong learning.

It is essential to provide life-long learning oppor-
4.2.2.
tunities to facilitate both continuous professional education
for existing disciplines and to allow men and women to
achieve new disciplines. This will require employer support
and the ‘out of hours’ availability of primary, secondary and
tertiary teaching.

4.3. Maintaining employability requires lifelong learning.
Everyone, men and women, must have good opportunities to
keep themselves employable. New teaching and learning
arrangements should be developed to allow learning to be self-
defined and self-directed, and to make use of networks. In
addition, structures suited to learning throughout one’s life
need to be in place; transparency and advice on learning
processes must also be increased. Realistic approaches to
promoting lifelong learning in a comprehensive manner
should be developed at both national and EU level.

The EU employment policy guidelines and the EU
4.4.
economic policy guidelines both call for better incentives for
investment in human capital. In these guidelines, the Member
States — and where possible businesses, trade unions and
other players — are asked to report on their efforts in favour
of human capital, setting out their objectives in concrete terms
and updating them on an ongoing basis. The ESC calls for
systematic observance of best practices and is prepared to play
an appropriate role in this connection.

(3) See ESC opinion on ‘Employment, economic reform and social
cohesion — Towards a Europe of innovation and knowledge’ —
OJ C 117, 26.4.2000, p. 62.

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The ESC also welcomes that

4.5.
the EU employment
guidelines call for equipment for all schools and Internet access
for all pupils by the end of 2002. It should be possible
to provide free Internet access to pupils and educational
establishments. New ways must be found to provide training
in IT and to promote job mobility for people who have no
access to training at present.

In order to meet the new requirements of work, social
4.6.
skills such as communication and team working are of key
importance alongside IT knowledge and media skills.
IT
training and the promotion of social skills must begin at
school
to all
level and then continue as a complement
forms of training and business activity. The rapid pace of
technological change makes it essential that systems of initial
and further vocational training in particular are constantly
updated. In addition to providing sufficient training places
with prospects for the future, a key task for European
employment policy is to link together general education
and initial and further vocational training into a coherent
continuum of lifelong learning.

4.7.
Education systems must be open so that everyone has
the chance of a job in the information society. Those who
have so far been excluded must be given access to new
learning opportunities, including showing then how to use IT
technologies in a socially responsible way. Efforts should be
made to promote vocational training models which favour the
social integration of disadvantaged groups and to ensure equal
opportunities for women and men. The ESC supports the
Council’s efforts to combat illiteracy more effectively.

4.8.
In some countries the often inadequate training facili-
ties and slow pace of modernising initial and further training
structures have produced the frequently cited training deficit.
In the case of some ICT professions requiring a university
degree, the strong demand far exceeds the supply of appropri-
ately qualified people. In view of the worldwide competition
to employ such people, training initiatives in this particular
area are needed in some EU countries. Recruitment from
outside may bridge the gap in the short term, but the medium
and long-term solution must be to mobilise and train up
home-grown human resources. The ESC therefore proposes
an initial and further training offensive for IT skills in all
Member States with verifiable targets.

4.10.
There should be systematic feedback between the
courses on offer and those in demand. Thus universities must
offer their students a wider range of more practical courses to
make them more employable. The range of available further
education courses should be expanded. Entry conditions must
be simple and as open as possible. At the same time studies,
vocational
training and research should be promoted at
European level through common standards and the reciprocal
recognition of courses, stays abroad and qualifications. Recog-
nised standards for qualifications are also required in respect
of vocational training and further training, making the value
of such qualifications less dependent on the product spectrum,
the individual company or the particular labour market
situation. The Committee advocates a substantial expansion in
cross-border work experience places involving ICT training.
There should be more sponsorships between businesses in the
ICT sector and educational establishments.

4.11.
Interactive learning between teachers and pupils in
the ICT sector is essential. Teachers should be encouraged to
acquire practical experience in business and administration
and develop the necessary skills through lifelong learning. The
Committee would suggest a recognised general system for
attesting knowledge society skills. Additional qualifications in
the field of information and communication should be attested
by certificates recognised throughout Europe.

5.

Innovation in firms and organisations (1)

5.1.
Building a knowledge society does not, however, mean
only a ‘learning society’ but also ‘learning firms’ and ‘learning
organisations’ which exploit the potential of technology cre-
atively.

Firms and other organisations should themselves shoulder
some responsibility for actively promoting the knowledge
society by supporting lifelong learning through appropriate
in-company training.

The structures of firms and organisations are being
5.2.
modernised to keep pace with the new requirements of the
knowledge society. ‘On-the-job learning’ is being encouraged
by introducing new, participative forms of work organisation.
The old functional and hierarchical forms of organisation are
being replaced by networks of smaller units with more
autonomy. Such forms of organisation are more conducive to
learning because communication does not have to overcome
so many barriers and levels of hierarchy. For the future
to constantly changing
organisations will have to adapt
conditions and redefine work and tasks in terms of the
knowledge, skills and experience required.

4.9.
At present in most Member States considerably more
men than women are trained for careers in the information
society. There is an urgent need to encourage women to opt
for such careers and improve their employment prospects.

(1) Cf. the definition of the term ‘organisation’ in paragraph 2.1.2.

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5.3.
Experience with Japanese management strategies has
shown that the ability and strength of firms to innovate
cannot be measured by technology alone. Success depends
increasingly on social innovation as well. This means adapting
jobs to the abilities of workers and motivational approaches
which require personal responsibility and collaborative man-
agement styles.

6.6.
Special labour market strategies are also needed for
unqualified workers to enable them to acquire skills and be
integrated. Social services should be available irrespectively of
income insofar as they serve to create equal opportunities and
avoid social polarisation.

The personnel policy of companies has a key role to
5.4.
It
play in shaping the organisational structures of
can establish a balance between technical, corporate and
work/employment-related interests.

firms.

6.

Social inclusion, not exclusion

6.1.
In principle, the adaptation of work and tasks in the
information society — the phenomenon of ‘new knowledge,
new jobs’ — can promote integration as well as leading to
exclusion.

6.2.
In particular the ESC is concerned about young people
without the literacy and numeracy to use workstations, older
workers in danger of being by-passed by new working
arrangements and the disabled.

For the disabled the information society can be a win-
6.3.
win situation. Employment moves from muscle to brain
power, and IT can be adapted to mitigate so many physical
and mental handicaps. Social provision for the handicapped
needs to focus on IT adaptation while employers will have
new ways to achieve their employment targets for the disabled
and the handicapped.

6.7.
Demographic change also poses a serious challenge to
the knowledge society. Personnel policies should take account
of the ageing of the workforce (1) and be geared to preventative
measures in this respect. The scope diminishes for recruiting
young blood to infuse new knowledge into the firm;
if
the older generation retires all at once, their accumulated
experience cannot be passed on adequately to the next
generation.

Greater attention should also be paid in the infor-
6.8.
mation society to assisting people with disabilities. Information
technologies can help many groups of disabled persons
actually to use their employment opportunities.

6.9.
In order to provide equal conditions of access to
knowledge and information within the EU, special efforts
should be made to develop the potential of the working
population in disadvantaged regions and remote areas (2).

6.10.
Unequal opportunities for access to new knowledge
run the risk that the social divide may grow wider. Social
marginality is not only hastened by a lack of training but may
also go hand-in-hand with a failure to accept new technologies,
e.g. skilled employees who cannot manage new technologies.
There is a need for national labour market and social policies
specifically targeting these groups and assisting them in
the transition to appropriate employment. Social integration
should be mainstreamed in employment, education, training,
health and housing policy.

6.4.
Experience shows that school-leavers with few qualifi-
cations undergo the least further training during their working
life and have the least chance of acquiring vocational qualifi-
cations. In-house training cannot generally offset differences
in educational achievement between groups of employees.
This continues to be a primary public responsibility.

6.11.
The social partners should review traditional distinc-
tions between blue- and white-collar workers and public-
sector employees, agree on the principles of corporate reorgan-
isation and ensure that the training policy of firms incorporates
new models for new forms of work and corporate structure.

6.5.
Firms’ investment in human resources should not be
confined to career planning for up-and-coming managerial
staff, but offer all employees appropriate further training. This
could include in-house and outside courses and should be
agreed with employees, taking the interests of both the firm
and the individual into account.

(1) The ESC is currently drawing up an own-initiative opinion on

‘older workers’.

(2) See opinion of the ESC on ‘Guidelines for integrated actions on
the island regions of the European Union following the Amster-
dam Treaty (Article 158)’, OJ C 268, 19.9.2000.

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7. Working conditions in the knowledge society

7.1. Working time policy represents an important com-
ponent of a comprehensive reform of the labour market. It
can meaningfully supplement structural changes and make
them politically more acceptable.

7.2.
Variation in working time arrangements adjusted to
the needs of the company and the needs of the employee can
improve the quality of life of employees and strengthen the
competitiveness of the enterprise.

7.3.
Employees can benefit from working time arrange-
ments if family life and job are better balanced, employment is
safeguarded and loss of skills avoided.

Changes in working time policy need to avoid bottle-
7.4.
necks in the supply of labour caused by skills shortages. Within
existing working time arrangements, adequate time needs to
be allowed for planning and training measures to be taken.

7.5.
Linking working time arrangements to vocational
qualifications can set off innovative processes. The basic idea
is to use a certain proportion of working time for vocational
training. The northern European countries in particular pro-
vide models for such linking, e.g. working time credits,
knowledge accounts and job rotation.

7.6.
in many countries the potential for voluntary part-time
working is far from exhausted. EU-wide about 6 % of working
males are employed part time and about a third of working
women.

7.7. Where full time working is the norm, management
and employee representatives may need to jointly draw up a
corporate plan for more voluntary part-time working and an
improved balance between family and job. The prospects for
an increase in part-time working are good if the social partners
translate such initiatives into practical measures.

7.8. With the new corporate models, forms of work are
springing up everywhere which we used to call
‘atypical’:
temporary work, teleworking, fee-based contractual work and
other forms of more or less freely chosen self-employment. In
the knowledge society income is no longer related so directly
to the amount of time invested in the work, but depends to a
greater degree on the skill, originality and speed with which
new problems are identified and solved.

7.10.
The development of the knowledge society is chang-
ing the balance of education and training between employers
and the formal education system. It is also causing companies
to revise their own approach.

7.11.
For the work force trained at a tertiary level, much of
their training, except what is job and employer specific, comes
from the formal education system. These are the skills on
which companies depend most and, in general, competitive
employers cannot afford to maintain these skills on anything
other than the leading edge.

For other workers,

7.12.
their formal education is by
definition incomplete. They are therefore candidates for both
job specific training and broader based personal development.
The ESC is concerned that employers may reduce or withdraw
this broader based development education and training for
reasons of economy or the misplaced view that training will
be bought by competitors hiring their employees. Since
employees are more likely to value employers who develop
their skills and careers and since ‘developed’ employees can
contribute more all round,
the ESC urges companies to
redouble their training efforts in order to compete in the
knowledge economy. Besides the responsibility of
firms,
individuals must increasingly assume responsibility for remain-
ing employable by undertaking further training on their own
initiative.

In the context of

flexible working arrangements
7.13.
social,
in addition to economic, criteria should also be a
yardstick for shaping flexibility. More consideration should be
given to workers’ requests to adapt working hours according
to personal circumstances. Concepts of ‘flexicurity’ attest to
the fact that flexibility, job security and social security are not
necessarily opposites.

One of the most visible indications of the changes in
7.14.
work organisation and standard working conditions is the
growth in teleworking. A new study shows that some six
million people are employed in telework arrangements in
Europe. The Committee is of the opinion that, with the right
general conditions to safeguard the rights and obligations of
teleworkers and their employers, this form of work can be
encouraged.

7.9.
In some member states, this multiplicity of different
arrangements means that the number of economically active
people who are not or only inadequately covered by Member
States’ social security schemes is growing. Such shortcomings
in social security cover need to be corrected.

7.15.
Employer-employee-relations in their various forms
(e.g. collective bargaining, company agreements) must continu-
ally adjust and shape the new conditions emerging from the
knowledge society.

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8.

Safeguarding and rebuilding the welfare state

8.1.
Social security systems have both a social and an
economic function. For instance, social spending paves the
way for private-sector production (qualifications for example).
It also considerably cushions the problems associated with
structural change.

Structural change can take place much more smoothly
8.2.
if individual risks are adequately cushioned and the oppor-
tunities for a new career are increased by active measures to
promote employability. A modernised social security system
is one of the foundations of dynamic economic development
which aids social cohesion.

8.3. With the change in forms of work and remuneration
and the growing proportion of electronic, virtually untraceable,
transactions, there may be some erosion of those national tax
and contribution systems which are tied to a specific firm and
the geographical location of the employment. The ESC calls
on the Commission to study this aspect carefully. A rapid and
global solution must also be found for the non-discriminatory
taxation of traditional trade vis-à-vis e-commerce.

concept of ‘flexicurity’. The introduction of general conditions
ensuring a stable employment future will promote the spread
of innovative forms of work organisation and labour market
flexibility.

8.7.
The TMT industries are in the vanguard when it comes
to developing new working arrangements which will change
the face of industrial relations. The Committee calls on the
Commission to examine carefully the effects of the new
technologies and of internationalisation on cooperation within
firms and the room for manoeuvre of the trade unions and
various players in firms.

It should be ensured that

teleworkers are treated
8.8.
equally in society; in particular they should be able to call on
company networks for basic information on social security,
health care and representation rights.

8.9.
If work is redefined, employability must be fostered
more strongly to help people earn a living for as long as
possible. The more skilled and employable a person is, the
more likely they are to find a job.

This includes security arrangements for workers in the infor-
mation society,
including data protection and intellectual
property.

9.

Summary

8.4.
By reinforcing preventive activities in the world of
work, firms and social security systems can certainly avoid
some of the nastier consequences. The potential of the IT in
the field of health and safety at the workplace must be used,
but new social risks also need to be studied. IT and also new
forms of work organisation are tending to reduce physical
fatigue, while greatly increasing the mental burden and stress.
Additional research should be undertaken into workloads,
work intensity and work-related stress.

8.5. With the loss of importance of the traditional firm and
the displacement of social relations from the workplace into
other spheres of life, the social risks are changing. In the
knowledge society there is no less a need, but a different need,
for social security. Social security systems should be reformed
to take account of flexible working time, breaks in employ-
ment, etc. and to ensure that people employed under these
flexible arrangements have equal opportunities. A variety of
social bridges are needed to underpin the active transformation
of society.

9.1.
The rapid development of the knowledge society is
affecting all sectors of the economy, organisational and work
structures, working and employment conditions. It is having
a profound impact
in the economic, social and cultural
transformation of our society.

9.2.
The big three — new technologies, media and telecom-
munications (TMT) — are permeating all sectors, even if there
are still many occupations and activities where they are not
used directly. In particular they speed the pace of change by
increasing exponentially the dissemination of knowledge and
its global availability.

9.3.
The knowledge society is opening up a wide potential
for new forms of organisation and is creating the opportunity
to turn the EU into a competitive and dynamic economic area.
In order to exploit the opportunities for innovation in industry
and society in an effective and socially responsible manner
joint efforts must be made to improve and broaden the skills
base.

8.6.
Reforms are needed in the Member States in order to
bring policies more closely into line with fundamental changes
in the areas of family, the division of labour between the sexes,
the demographic trend and fundamental changes in the world
of work. In this, greater consideration should be given to the

9.4.
The all-round ability to use the new TMT is nowadays
a basic skill that everyone has to master, like reading, writing
and arithmetic. The job-creation potential can only be fully
realised if skilled workers are trained at all levels and everyone
has the opportunity to maintain and expand their employa-
bility. This puts important new responsibilities on individuals.

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9.4.1.
To optimise the performance of human assets, we
need systems of primary, secondary and tertiary education
which educate and train for a knowledge society. We need
companies to invest in human assets with development and
training of their personnel. Continuing professional education
and lifelong learning are more than slogans — they spell
economic survival in the global economy.

9.5.
Bearing in mind these requirements of the knowledge
society, there is an even greater need for an active, forward-
looking employment strategy supported by the main economic
and social players that creates a new balance between invest-
ment in human resources and investment in machines, plant
and infrastructure.

New knowledge, technical innovation and social inno-
9.6.
vation must go hand in hand in order to smooth the way to a
society, firms and jobs based on learning.

9.6.1.
New organisational and management principles are
less status- and more process-oriented. Working relationships
are more direct, team-oriented and require personal initiative
and responsibility. Participative forms of work organisation
are becoming increasingly important, with workers involved
in the way the workplace, work routines and working time are
organised.

9.6.2.
In the knowledge society, human assets need more
care than physical assets. Different working arrangements need
to be offered and family friendly arrangements must be made.

9.7.
The knowledge society offers new opportunities for
growth and employment. At the same time, new social risks
and different social security needs may arise.

9.7.1.
The social security system must be readjusted to
flexible forms of work and life-style. The concept of ‘flexicurity’
is intended to reconcile the flexibility seen as necessary by
firms with the legitimate interest of employees in security.

9.7.2.
In the knowledge society some groups are threatened
by discrimination and exclusion; to counter this, all groups
must play a part in developing the information society. Social
exclusion must be avoided so that the pace of innovation and
future prosperity are not reduced and social cohesion is not
jeopardised.

Changes in work organisation bring with them changes
9.8.
in the system of labour relations. There is a greater need for
joint initiatives between the social partners to ensure that the
transition to the knowledge society encourages competi-
tiveness and social cohesion in equal measure. Agreements on
the modernisation of work organisation and in-house skills
acquisition can smooth the way.

The all-embracing nature of the knowledge society
9.9.
means that its opportunities can be most fully exploited by
those societies which best coordinate the innovations brought
about by R&D — innovations in education and training, in
infrastructure and services — and which play an active role in
managing this process.

9.6.3.
The spread of new working arrangements and new
models reconciling paid employment, education, family and
social activities, calls for changes in labour law and social
security which take account of
the
knowledge society. Flexibility in working arrangements should
be accompanied by a panoply of social bridges to actively
facilitate the transformation of society.

the new realities of

9.10.
Europe will undoubtedly be on the winning side if a
new balance can be found between market forces and those
essential tasks which still devolve upon government.

The EU’s prospects in globalisation are good if the economic
and social potential of the knowledge society are used boldly
in equal measure.

Brussels, 19 October 2000.

The President

of the Economic and Social Committee

Göke FRERICHS

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APPENDIX

to the Opinion of the Economic and Social Committee

The following amendments, which received at least a quarter of the votes cast, were rejected in the course of the
debate:

Points 7.4 and 7.5

Combine into one paragraph, to read as follows:

‘Changes in working time policy need to avoid bottlenecks in the supply of labour caused by skills shortages. Linking
working time arrangements to vocational qualifications can set off innovative processes.’

Reasons

The sub-committee did not discuss the link between working time arrangements and vocational qualifications, and
this issue deserves proper consideration.

Result of the vote

For: 61, against: 63, abstentions: 7.

Point 7.12

Delete the third sentence (‘The ESC is concerned ... hiring their employees.’).

Result of the vote

For: 54, against: 63, abstentions: 5.