COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS An Agenda for new skills and jobs:  A European contribution towards full employment
Date: 2010-11-23
Institutions: European Commission
Subjects: EU employment policy, European Employment Strategy, Welfare State, fight against unemployment, full employment, job creation, vocational training

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EUROPEAN COMMISSION 

Strasbourg, 23.11.2010 
COM(2010) 682 final 

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

An Agenda for new skills and jobs:  
A European contribution towards full employment 

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

An Agenda for new skills and jobs:  
A European contribution towards full employment 

INTRODUCTION 

The European Union has agreed on an employment rate target for women and men of 75% for 
the  20-64  years  age  group  by  2020:  an  ambitious  commitment  to  the  sustainability  of 
Europe’s social model, welfare systems, economic growth and public finances.  

Bridging the gap to the target will be no easy task. The crisis has brought the employment rate 
down to 69%, and the unemployment rate up to 10%; assuming the labour market stabilises in 
2010-2011,  achieving  an  employment  rate  of  75%  by  2020  will  require  an  average 
employment  growth  slightly  above  1%  per  annum.  With  declining  fertility  rates,  the  EU 
working  age  population  (15-64)  will  start  shrinking  as  early  as  2012;  even  with  continuing 
immigrant  flows.  A  skilled  workforce  is  an  essential  asset  to  develop  a  competitive, 
sustainable  and  innovative  economy  in  line  with  Europe  2020  goals.  In  times  of  budgetary 
constraints  and  unprecedented  global  competitive  pressures,  EU  employment  and  skills 
policies  that  help  shape  the  transition  to  a  green,  smart  and  innovative  economy  must  be  a 
matter of priority. 

The EU can meet all these challenges and raise employment  rates substantially, particularly 
for women and young and older workers, but only with resolute action focussing on four 
key priorities:  

–  First,  better  functioning  labour  markets.  Structural,  chronically  high  unemployment 
rates represent an unacceptable loss of human capital: they discourage workers and lead to 
premature withdrawal from the labour market and to social exclusion. Flexicurity policies 
are the best instrument to modernise labour markets: they must be revisited and adapted to 
the  post-crisis  context,  in  order  to  accelerate  the  pace  of  reform,  reduce  labour  market 
segmentation, support gender equality and make transitions pay.  

–  Second, a more skilled workforce, capable of contributing and adjusting to technological 
change with new patterns of work organisation. This is a considerable challenge, given the 
rapidly-changing skills needed, and the persistent skills mismatches in EU labour market. 
Investment  in  education  and  training  systems,  anticipation  of  skills  needs,  matching  and 
guidance  services  are  the  fundamentals  to  raise  productivity,  competitiveness,  economic 
growth and ultimately employment. The EU is committed to improving education levels by 
reducing  school  drop-outs  to  10 %  or  less,  and  by  increasing  completion  of  tertiary  or 
equivalent  education  to  at  least  40 %  in  2020.  The  potential  of  intra-EU  mobility  and  of 
third-country migrant inflows is not fully utilised and insufficiently targeted to meet labour 
market needs, despite the substantial contribution of migrants to employment and growth.  

–  Third, better job quality and working conditions. There is no trade-off between quality 
and  quantity  of  employment:  high  levels  of  job  quality  in  the  EU  are  associated  with 

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equally  high  labour  productivity  and  employment  participation.  Working  conditions  and 
workers’ physical and mental health need to be taken into account to address the demands 
of  today’s  working  careers,  which  are  characterised  by  more  transitions  between  more 
intense and demanding jobs and by new forms of work organisation. 

–  Fourth,  stronger  policies  to  promote  job  creation  and  demand  for  labour.  It  is  not 
enough  to  ensure  that  people  remain  active  and  acquire  the  right  skills  to  get  a  job:  the 
recovery  must  be  based on job-creating  growth. The right conditions to create  more jobs 
must be put in place, including in companies operating with high skills and R&D intensive 
business  models.  Selective  reductions  of  non-wage  labour  costs,  or  well-targeted 
employment  subsidies,  can  be  an  incentive  for  employers  to  recruit  the  long-term 
unemployed  and  other  workers  drifting  from  the  labour  market.  Policies  to  exploit  key 
sources  of  job  creation  and  to  promote  entrepreneurship  and  self-employment  are  also 
essential to increase employment rates.  

The  main  responsibility  and  instruments  to  achieve  these  objectives  rest  with  the 
Member  States,  in  conformity  with  the  Treaty  and  the  subsidiarity  principle.  However,  the 
EU  employment  rate  target  for  women  and  men  of  75 %  by  2020  will  only  be  achieved  by 
pooling  all  efforts  and  instruments.  This  ‘Agenda  for  new  skills  and  jobs’  flagship 
initiative sets out, in 13 key actions with accompanying and preparatory measures, the 
possible  EU  contribution  to  this  joint  effort  as  part  of  the  Europe  2020  strategy.  In  the 
framework  of  the  EU  enlargement  process and  within  the  European  Neighbourhood  Policy, 
the  Commission  will  also  ensure  the  objectives  of  this  Agenda  are  taken  up  in  the  relevant 
countries. 

THE AGENDA’S PRIORITIES 

1. 

TOWARDS  A  NEW  MOMENTUM  FOR  FLEXICURITY:  REDUCING  SEGMENTATION  AND 
SUPPORTING TRANSITIONS 

Lessons learned: flexicurity policies helped weather the crisis, but vulnerable groups have 
been hit the hardest 

In December 2007, the Council adopted the EU Common Principles of Flexicurity including 
its four components, as a means of modernising labour markets and promoting work through 
new  forms  of  flexibility  and  security1.  In  order  to  increase  adaptability,  employment  and 
social  cohesion,  Member  States  were  called  upon  to  develop  their  own  national  flexicurity 
arrangements  and  to  devise  strategies  to  reform  their  labour  markets  together  with  social 
partners. Since then, the crisis has put national reform strategies and flexicurity to the test; the 
lessons of the last two years are both encouraging and challenging2.  

On  the  one  hand,  evidence  shows  that  flexicurity  policies  have  helped  weather  the  crisis. 
Many  Member  States  have  temporarily  introduced  new  publicly  sponsored  short-time 
working  arrangements,  or  have  increased  their level,  coverage  and  duration,  and  made  their 
use more manageable. By increasing internal flexibility, Member States countered the fall in 

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Council  conclusions  on  ‘Towards  Common  Principles  of  Flexicurity’  of  5/6  December  2007 
(doc.16201/07). 
Council conclusions on "Flexicurity in times of crisis" of 8 July 2009 (doc.10388/09). 

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the growth of employment in 2008-09 by 0.7 percentage points on average on an annual basis. 
They helped companies avoid the loss of firm-specific human capital and re-hiring costs, and 
contributed to mitigate hardship for workers.  

Similarly,  several  Member  States  have  strengthened  unemployment  insurance  systems  (i.e. 
the level of benefits, their duration, and their coverage for new groups). Active labour market 
measures have increased, including business start-up incentives, training and work experience 
programmes.  Public  Employment  Services  provided  more  targeted  job-search  assistance  for 
particular  groups  such  as  young  people,  immigrants,  workers  on  short-term  contracts,  the 
newly  redundant,  or  those  not  receiving  benefits.  In  some  countries,  employment  services 
raised their staffing levels by 10% or more to cope with the rise in the number of job seekers.  

On the other hand, the crisis has highlighted the urgent need to pursue labour market reforms, 
without  reducing  the  scope  for  consensus  and  trust  between  social  partners  —  a  key 
prerequisite  for  successful  flexicurity  policies.  Policies  to  reduce  segmentation  have  been 
insufficient:  young,  temporary  workers  and  migrants  have  been  among  those  hardest  hit  by 
the  recession.  The  unemployment  rate  for  young  people  (up  to  25  years)  has  risen  by  5.8 
percentage  points  since  March  2008  to  over  20%,  while  the  rate  for  adults  (25-64  years) 
increased only by half as much and currently stands at 8.3%. At the height of the recession, 
job  losses  for  workers  in  temporary  work  were  almost  four  times  higher  than  for  those  in 
permanent employment. Unemployment has also risen sharply among the migrant population. 

The crisis has also shown how hard it is to implement truly integrated policies. For example, 
the short-term working arrangements have not been complemented often enough with training 
opportunities  for  employees.  Even  in  Member  States  offering  additional  incentives  for 
training, not enough potential beneficiaries took up the offer to re-train. 

A new momentum: strengthening the flexicurity components and implementation 

The EU Common Principles for flexicurity are well-balanced and comprehensive; they remain 
valid  today.  However,  the  four  components  of  flexicurity  (flexible  and  reliable  contractual 
arrangements,  active  labour  market  policies,  life-long  learning,  and  modern  social  security 
systems) must be strengthened to ensure that, in the post-crisis context, countries focus on the 
most cost-effective reforms while providing better flexibility and security.  

Member States’ national flexicurity arrangements can be strengthened and adapted to the new 
socio-economic context, through a new balance within and between the four components of 
flexicurity, and in the time sequence of different policies. Labour market institutions also need 
to be strengthened, to ensure that workers benefit from transitions between jobs, occupations, 
sectors or  employment statuses. Making transitions pay is essential to provide workers  with 
the  necessary  security  to  accept  and  cope  adequately  with  mobility.  Lastly,  implementation 
and  governance  must  enhance  the  coordination  of  policies,  and  the  involvement  of  social 
partners and other relevant stakeholders.  

1.1. 

Priorities for reinforcing the four components of flexicurity 

In order to strengthen labour market reform and modernisation, building on the EU Common 
Principles, the Commission proposes the following key policy  priorities to reinforce the 
four components of flexicurity, in partnership with Member States and social partners: 

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Flexible and reliable contractual arrangements: 

•  Focusing on the reduction of segmentation in the labour market. Different avenues can be 
pursued  in  line  with  the  national  context  such  as  the  decentralisation  of  collective 
bargaining  or  the  revision  of  existing  contractual  arrangements.  While  in  some  cases 
greater contractual variety may be needed to answer territorial and sectoral specificities, in 
highly  segmented  labour  markets,  one  possible  avenue  for  discussion  could  be  to  extend 
the use of open-ended contractual arrangements, with a sufficiently long probation period 
and a gradual increase of protection rights, access to training, life-long learning and career 
guidance  for  all  employees.  This  would  aim  at  reducing  the  existing  divisions  between 
those holding temporary and permanent contracts. 

•  Putting  greater  weight  on  internal  flexibility  in  times  of  economic  downturn.  While  both 
internal  and  external  flexibility  are  important  over  the  business  cycle,  internal  flexibility 
can help employers adjust labour input to a temporary fall in demand while preserving jobs 
which are viable in the longer term. Employers can thus retain the skills  of firm-specific 
workers  which  will  be  at  a  premium  when  the  recovery  takes  hold.  Forms  of  internal 
flexibility  include  the  adjustment  of  work  organisation  or  working  time  (e.g.  short-time 
working arrangements). Flexibility also allows men and women to combine work and care 
commitments,  enhancing  in  particular  the  contribution  of  women  to  the  formal  economy 
and  to  growth,  through  paid  work  outside  the  home.  Notwithstanding  the  importance  of 
internal  flexibility,  external  flexibility  remains  essential  in  case  of  necessary  structural 
adjustment in order to allow an efficient reallocation of resources. 

Comprehensive life long learning: 

•  Improving access to lifelong learning, to help people move to high-value added sectors and 
expanding  occupations  such  as  those  emerging  from  ‘sustainable  growth’  policies,  equal 
opportunities policy and legislation, and ‘white’ jobs. More flexible learning pathways can 
facilitate  transitions  between  the  phases  of  work  and  learning,  including  through 
modularisation  of  learning  programmes.  These  pathways  should  also  allow  for  the 
validation of non-formal and informal learning and be based on learning outcomes, as well 
as the integration of learning and career guidance systems. 

•  Adopting  targeted  approaches  for  the  more  vulnerable  workers,  particularly  the  low 
skilled,  unemployed,  younger  and  older  workers,  disabled  people,  people  with  mental 
disorders, or minority groups such as migrants and the Roma: Public Employment Services 
(PES)  should  provide  career  guidance  and  well-targeted  and  adapted  training  and  work-
experience programmes. Specific priority should also be given to i) the skills upgrading of 
older workers who are particularly vulnerable to economic restructuring, ii) re-skilling of 
parents returning to work after a period taking care of family dependants and iii) re-skilling 
of blue collar workers with a view to a transition towards green-collar jobs.  

•  Enhancing  stakeholders'  involvement  and  social  dialogue  on  the  implementation  of 
lifelong  learning.  Partnerships  at  regional  and  local  levels  between  public  services, 
education  and  training  providers  and  employers,  can  effectively  identify  training  needs, 
improve the relevance of education and training, and facilitate individuals' access to further 
education and training. Social partners' dialogue is particularly important on effective cost 
sharing arrangements, on the provision of learning in the work-place, and on the promotion 
of cooperation between public sector organisations and business. 

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•  Establishing  effective  incentives  and  cost  sharing  arrangements,  to  enhance  public  and 
private  investment  in  the  continuing  training  of  the  workforce,  and  increase  workers' 
participation  in  lifelong  learning.  Measures  could  include:  tax  allowance  schemes, 
education voucher programmes targeted at specific groups, and learning accounts or other 
schemes  through  which  workers  can  accumulate  both  time  and  funding.  While  these 
measures  should  comply  with  EU  state  aid  rules,  Member  States  can  benefit  from  the 
possibilities offered by the General block exemption Regulation (EC) No 800/2008. 

Active Labour Market Policies (ALMP)  

•  Adapting the mix of ALMPs and their institutional setting to reduce the risk of long-term 
unemployment.  Member  States  have  made  significant  progress  in  this  component  of 
Flexicurity:  thanks  in  part  to  the  European  Employment  Strategy,  ALMPs  are  far  better 
and  stronger  than  they  were  a  decade  ago.  However,  there  is  scope  for  improvement  on 
several  aspects:  individual  job  counselling,  job  search  assistance,  measures  to  improve 
skills  and  employability.  Cost-effectiveness  of  ALMPs  and  the  conditionality  of 
unemployment  benefits  with  the  participation  in  ALMPs  are  also  two  areas  requiring 
further attention. These labour supply measures may not suffice if the pace of job creation 
is subdued: they should then be complemented by labour demand measures, such as cost-
effective  targeted  hiring  subsidies.  To  minimise  the  burden  on  public  finances,  these 
subsidies should focus on net job creation and ‘hard-to-place’ workers, such as those with 
low skills and little experience. 

Modern Social Security Systems:  

•  Reforming unemployment benefit systems to make their level and coverage easier to adjust 
over the business cycle (i.e. offer more resources in bad times and fewer in  good times). 
This  would  enhance  the  role  of  benefits  as  automatic  stabilisers,  by  promoting  income 
insurance  and  stabilisation  needs  over  job  search  incentives  during  downturns,  and  the 
reverse in upturns. As labour markets recover, Member States should consider rolling back 
the temporary extensions of benefits and duration of unemployment insurance introduced 
during the recession, to avoid negative effects on re-employment incentives. The review of 
out-of-work and in-work benefits to improve financial incentives to take up work, should 
be  combined  with  measures  to  promote  the  uptake  of  training  and  other  activation 
schemes,  while  making  sure  that  benefits  still  provide  poverty  alleviation  for  those  who 
remain out of work. 

•  Improving  benefits  coverage  for  those  most  at  risk  of  unemployment,  such  as  fixed-term 
workers,  young  people  in  their  first  jobs  and  the  self-employed.  This  can  be  achieved, 
where  necessary,  through  extending  unemployment  benefit  systems  coverage,  and 
reinforcing  other  social  security  entitlements  (parental  leave  and  other  reconciliation 
entitlements, sickness leave, disability benefits, etc.); the level of unemployment benefits 
should be commensurate to the individual work history. 

•  Reviewing the pension system to ensure adequate and sustainable pensions for those with 
gaps in pension-saving contributions, due to periods of unemployment, sickness or caring 
duties, or to short-term contracts. Pension reforms should go along with policies to support 
labour market transitions of older people, particularly from unemployment back to work. 

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1.2. 

Priorities  to  enhance  the  implementation,  monitoring  and  governance  of 
flexicurity 

European social partners supported the adoption of the Common Principles of flexicurity and 
have  stressed  the  importance  of  an  approach  combining  internal  and  external  flexicurity. 
While  in  many  countries  social  partners  have  been  engaged  in  the  implementation  and 
monitoring  of  national  flexicurity  approaches,  consultation  and  dialogue  should  be 
strengthened:  flexicurity  policies  can  only  succeed  if  social  partners  take  full  ownership  of 
labour market reforms.  

As  announced  in  the  "Single  Market  Act"3  and  the  Flagship  Initiative  "Industrial  Policy  for 
the Globalisation Era"4, the Commission is consulting again the European social partners to 
develop  an  EU  framework  for  restructuring  with  a  view  to  encourage  a  shift  from  purely 
reactive  actions  to  more  anticipative  strategies  and  ensure  its  full  application.  Anticipative 
strategies  allow  taking  into  account  the  needs  arising  from  the  transition  to  a  low-carbon 
economy, and from sectors with structural excess capacities. They can also help avoid social 
conflict  through  the  negotiated  management  of  restructuring  operations,  for  example  by 
developing occupational training and economic reconversions.  

One  crucial  lesson  learnt  over  the  past  two  years  is  the  importance  of  labour  market 
institutions.  Employment  services  and  in  particular  Public  Employment  Services  (PES)  can 
act  as  transitions  agencies  by  strengthening  their  service  delivery.  While  their  main  role 
currently  is  to  address  the  needs  of  the  unemployed,  employment  services  can  play  a  more 
comprehensive  role  as  lifelong  service  providers,  delivering  services  in  skills  assessment, 
profiling,  training  delivery,  individual  career  guidance  and  client  counselling  (workers  and 
employers),  matching  people  to  job  profiles,  and  offering  services  to  employers,  as  well  as 
catering  for  the  challenges  of  those  furthest  away  from  the  labour  market.  Employment 
services  should  also  promote  partnerships  between  and  among  services  (public,  private  and 
third  sector  employment  services),  education  and  training  providers,  NGOs  and  welfare 
institutions.  

Finally,  the  delivery  of  sound  Flexicurity  policies  requires  a  systematic  and  efficient 
monitoring  of  Member  States’  progress.  Since  the  adoption  of  the  Common  Principles,  the 
Employment Committee (EMCO) has developed an analytical framework, including a broad 
set  of  indicators.  The  Commission  will  build  on  this  framework  and  provide  regular 
monitoring and assessment of flexicurity policies across the EU. 

Flexicurity - Key Actions 1 to 3: 

1.  A  new  momentum  for  flexicurity  must  be  the  result  of  a  common  approach  by  EU 
institutions,  Member  States  and  social  partners.  Building  on  the  EU  Common  Principles  of 
Flexicurity,  the  priorities  proposed  in  this  Flagship  initiative  set  out  the  terms  of  a 
comprehensive  debate  on  strengthening  the  four  components  of  flexicurity  (e.g.  on  the 
single contract or the reform of benefits systems). These priorities could be debated in early 
2011  at  a  Stakeholder  Conference  on  Flexicurity,  organised  by  the  Commission  with 
Member States, the European Parliament and social partners. The consensus on flexicurity as 
a  key  contribution  to  the  Europe  2020  employment  target  should  be  consolidated  in  a 
Communication on a new momentum for Flexicurity in the first half of 2012. 

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COM(2010) 608, 27.10.2010. 
COM(2010) 614, 28.10.2010. 

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2.  The  key  importance  of  acquiring  skills  and  competences  throughout  the  working  life 
requires comprehensive strategies for Lifelong Learning and in particular a new approach 
to  adult  learning,  based  on  common  principles  such  as  shared  responsibility  and 
partnership, effective financing mechanisms, flexible pathways, and quality initial education 
and targeted continuing training. Drawing on progress achieved in the Copenhagen process, 
the Commission will present in 2011: a Communication on the implementation of lifelong 
learning  strategies  and  competence  development;  a  European  policy  handbook  setting 
out a framework for lifelong learning implementation; and a renewed action plan for adult 
learning. 

3.  To  enhance  the  social  partners’  participation  and  ownership  of  the  New  Skills  and  Jobs 
Agenda at EU level, the Commission proposes to hold as of 2011 a Tripartite Social Forum. 
The  Forum  would  discuss  the  implementation  of  the  Agenda  and  flexicurity  policies  in 
particular, ahead of the Tripartite Social Summit that precedes the Spring Council within the 
European Semester. 

Accompanying and preparatory measures: 

In  complement  to  these  Key  Actions,  in  order  to  strengthen  the  governance  and 
implementation mechanisms and support Member States, the Commission will:  

•  Introduce,  as  of  2011,  a  comprehensive  methodology  to  monitor  Member  States’ 
progress in implementing the principles of flexicurity, based on the ongoing work with the 
Employment Committee.  

•  Establish,  by  the  end  of  2011,  a  partnership  between  employment  services  from  the 
public,  private  and  third  sectors  to  encourage  an  EU-level  strategic  dialogue  to  make 
transitions  pay.  The  partnership  will  also  provide  small-scale  funding  for  best-practice 
projects; a new web tool will disseminate the evaluated and tested good practices. 

•  Launch in 2011 a consultation of European social partners on a European framework 

for restructuring. 

2. 

EQUIPPING PEOPLE WITH THE RIGHT SKILLS FOR EMPLOYMENT  

Matching skills supply with labour market needs remains a challenge 

In  2008,  the  Commission  Communication  "New  Skills  for  New  Jobs",  followed  by  two 
Council  Conclusions  and  an  independent  experts  Report,  established  the  anticipation  and 
matching  of  labour  market  and  skills  needs  as  a  top  priority  for  the  EU5.  In  May  2009, 
Member States agreed the "Strategic Framework for European cooperation in education and 
training" to address lifelong learning and skills development of citizens of all ages. 

The  crisis  has  underlined  the  importance  of  the  challenge:  it  has  accelerated  the  pace  of 
economic  restructuring,  displacing  many  workers  from  declining  sectors  to  unemployment 
due  to  a  lack  of  the  skills  required  by  expanding  sectors.  Now  the  first  signs  of  economic 
recovery go hand in hand with difficulties in recruiting high-skilled staff.  

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COM(2008) 868, 16.12.2008. Council conclusions of 9.3.2009 and 7.6.2010. 'New Skills for New Jobs: 
Action Now' Expert Group Report, Feb. 2010. 

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Long-term  prospects  also  emphasise  the  importance  of  skills.  Jobs  occupied  by  highly-
qualified people are expected to rise by 16 million between now and 2020 in the EU, while 
those held by low-skilled workers will decline by around 12 million. Too many people do not 
have  the  competences  needed  to  succeed  in  the  labour  market;  adults  with  low  educational 
attainment are seven times less likely to be involved in continuing education and training than 
those  with  high  attainment  levels,  and  as  a  result  face  increasing  difficulty  in  adapting  to 
newly-emerging and evolving skills needs. 

Serious deficits in qualified professionals, in management and technical, job-specific skills are 
hampering Europe’s sustainable growth objectives. This is also the case for shortages in areas 
critical  for  innovation,  in  particular  Science  Technology  Engineering  Mathematics.  In  the 
automotive  sector  and  shipbuilding,  for  example,  demand  for  hybrid  vehicles  and  offshore 
investment in sustainable energy already requires many skills other than those which workers 
in  those  sectors  currently  have.  Indeed,  significant  investments  in  "green"  skills  need  to  be 
made to ensure Europe lives up to its ambition of having 3 million green collar workers by 
2020. By 2015, there will be a shortage of ICT practitioners estimated at 384 000 to 700 000 
jobs,  jeopardising  the  sector  itself  but  also  the  ICT  dissemination  across  all  sectors  of  the 
economy.  Moreover,  more  than  30%  of  Europeans  have  rarely  or  never  used  the  internet 
which significantly hampers their employment opportunities since most jobs already require 
e-skills6. By 2020, in the health sector a shortage of about 1 million professionals - and up to 
2 million if ancillary healthcare professions are taken into account is estimated, i.e., 15% of 
the  care  needed  in  the  EU.  An  additional  1  million  researchers  are  needed  to  meet  our 
ambitions to establish an Innovation Union.  

The  mismatch  between  skills  needs  and  supply  has  also  a  geographical  component:  skills 
shortages  and  bottlenecks  in  high  growth  areas  coexist  with  areas  of  persistent  high 
unemployment.  Yet,  mobility  remains  very  low  in  the  EU:  in  2009,  only  2.4%  of  the  EU's 
population  were  citizens  of  another  Member  State.  Economic  migration  is  also  acquiring 
strategic importance in dealing with skills shortages. Non-EU citizens amounted to almost 20 
million,  or  4.0%  of  the  total  EU-27  population;  without  net  migration,  the  working-age 
population  would  shrink  by  12%  in  2030  and  by  33%  in  2060  compared  with  2009.  Yet, 
skilled migrant workers too often occupy low skill low quality jobs, underlining the need for a 
better management of these migrant workers’ potential and skills. 

Strengthening the Union's capacity to anticipate and match labour market and skills needs  

The  impact  of  the  crisis  and  the  persistent  high  level  of  unemployment  have  increased  the 
need  to  better  understand  where  future  skills  shortages  are  likely  to  be  in  the  EU.  The 
knowledge  acquired  since  2008  through  different  actions  must  be  brought  together  into  a 
systematic  review  of  EU  skills  needs.  Member  States’  actions  to  raise  skills  levels  must  be 
complemented  by  EU  action,  with  a  strong  emphasis  on  geographical  mobility  as  an 
adjustment  mechanism  to  ease  regional  pockets  of  unemployment,  and  respond  to  market 
needs. The Commission will also continue to support the creation of sectoral skills' councils at 
European  level  when  an  initiative  comes  from  stakeholders  such  as  social  partners  or  the 
relevant  observatories.  Similarly,  in  line  with  the  Stockholm  Programme7,  and  in  particular 
the development of EU legislation on legal migration, the Commission will take action to tap 
more  effectively  the  potential  of  migrants  already  in  the  EU.  There  are  five  core  areas  for 
action: 

6 
7 

See definition in COM(2007) 496, 7.9.2007. 
COM(2010) 171, 20.4.2010. 

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2.1. 

Developing labour market intelligence and skills governance 

Most  Member  States  develop  their  labour  market  intelligence  on  current  and  future  skills 
needs,  through  bodies  such  as  Observatories  which  bring  together  labour  market  actors  and 
education and training providers. These analyses help shape qualification standards and adapt 
training systems to labour market needs.  

However,  there  is  still  wide  scope  to  further  develop  the  existing  forward-looking  labour 
market tools at Member State, regional, sectoral and EU level, and to disseminate their results 
in order to better address skills shortages. The Commission will facilitate cooperation between 
bodies  in  Member  States  involved  in  skills  governance  (anticipation  of  skills  needs  and 
responsiveness  of  education  and  training  systems),  in  order  to  promote  information  sharing 
and better use of labour market intelligence in employment, education and training policies.  

2.2. 

Providing the right mix of skills 

Irrespective  of  age,  gender,  socio-economic  background,  ethnicity  or  disability,  all  EU 
citizens should have the opportunity to acquire and develop the mix of knowledge, skills and 
aptitudes they need to succeed in the labour market.  

To  this  end,  education  and  training  systems  must  deliver  the  right  mix  of  skills,  including 
digital  and  transversal  key  competences,  media  literacy,  and  communication  in  a  foreign 
language. They must also ensure that young people, graduating from secondary and  tertiary 
education,  possess  the  skills  and  competences  needed  to  make  a  rapid  and  successful 
transition  to  employment.  Fighting  against  early  school  leaving  and  low  educational 
achievement in basic competences such as literacy, numeracy and science, including among 
adults,  is  an  essential  element  for  inclusion,  employment  and  growth.  Continuing  training 
must reach the benchmark of 15% of all adults participating in lifelong learning8. 

Good  progress  has  been  made  in  adapting  school  curricula,  introducing  reforms  along  the 
European  Key  Competences  Framework  for  Lifelong  Learning,  and  using  the  Europass. 
However,  Member  States  should  step  up  the  pace  of  reform  and  implement  national 
qualifications  frameworks  based  on  learning  outcomes,  as  indicated  in  the  European 
Qualifications  Framework  Recommendation.  Similarly,  the  Copenhagen  process  should 
further help improve the attractiveness of initial vocational education and training. 

Given the transversal role of digital competences across the economy, the Digital Agenda for 
Europe is an essential catalyst that can help provide the right digital competences for workers 
and  job-seekers,  with  targeted  efforts  to  promote  basic  digital  literacy  for  those  with  least 
competences  such  as  the  elderly,  less-educated  persons  or  SMEs  employees  but  also  to 
promote  specialised  and  advanced  ICT  competences  for  those  holding  specific  job  profiles 
such as ICT practitioners. 

2.3.  Matching  people’s  skills  and  job  opportunities,  and  capitalising  on  Europe’s 

potential jobs  

While delivering the right mix of skills is important, avoiding the under-utilisation of people’s 
talents and potential is just as essential. This requires better cooperation between the worlds of 

8 

Council conclusions on the "Strategic Framework for European cooperation in education and training 
ET(2020)" (doc. 9845/09). 

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work,  education  and  training,  and  an  increased  transparency  in  the  labour  market,  beyond 
traditional approaches which measure skills only through formal qualifications.  

The shift towards competence- and skills-based approaches is already leading to a significant 
change in education systems, labour markets, and their interaction. This in turn has important 
implications  for the  work  of  employment  services in the area  of  skills  assessment, profiling 
processes,  training  delivery,  cooperation  with  training  providers,  career  guidance  and  client 
(including employers) counselling. Cooperation between employment services and guidance 
centres in the education field must be reinforced, so that the latter can provide advice directly 
relevant to the labour market. 

Counselling, incentives and assistance to companies, including SMEs, is also essential to help 
them develop and make the best use of competences in the work place. Employers should be 
encouraged to co-invest and participate in the activities of education and training institutions, 
particularly in higher education and vocational education and training; these partnerships can 
develop and update skills profiles, multidisciplinary curricula and qualifications, and facilitate 
the  provision  of  work-based  learning,  from  apprenticeships  to  industrial  PhDs.  These 
structured  partnerships  could  offer  an  efficient  and  systemic  means  of  developing  this 
interaction. 

In  order  to  bridge  the  skills  gap  for  the  jobs  of  the  future  and  make  our  education  systems 
more  responsive  to  the  future  needs  o  four  economy  (e.g.  green  economy),  new  academic 
specialisations  need  to  be  promoted  so  to  achieve  a  critical  mass  that  will  raise  European 
competitiveness. 

2.4. 

Enhancing geographical mobility throughout the EU 

Many  non-regulatory  factors  influence  interregional  and  transnational  mobility:  housing, 
language, the employment opportunities of partners, return mechanisms, historical ‘barriers’, 
and  the  recognition  of  mobility  experience,  particularly  within  SMEs.  Recent  efforts  to 
improve  geographical  mobility  have  focused  on  the  removal  of  legal  and  administrative 
obstacles  (e.g.  in  the  area  of  recognition  of  qualifications  and  portability  of  supplementary 
pension  rights).  Citizens  must  now  be  better  informed  of  these  changes  to  embrace  with 
confidence  cross-border  career  moves;  more  emphasis  must  also  be  put  on  raising  the 
transparency  of  job  vacancies  across  the  EU.  In  the  context  of  the  coordination  of  social 
security  systems  for  the  Commission  in  cooperation  with  Member  States  will  also  examine 
the  situation  of  highly  mobile professional  categories,  in  particular  researchers  engaged  in 
remunerated  research  activity,  to  facilitate  their  geographical  and  inter-sectoral  mobility  in 
order to complete the European Research Area by 2014. 

Some  professionals  must  still  comply  with  long  and  cumbersome  procedures  before  their 
qualifications are recognized. The Commission is currently carrying out an evaluation of the 
Professional  Qualifications  Directive,  in  order  to  identify  possible  solutions  such  as  a 
professional card and simplify the current situation.  

2.5. 

Reaping the potential of migration 

To  maximise  the  potential  contribution  of  migration  to  full  employment,  migrants  already 
legally residing in the EU should be better integrated, particularly through removing barriers 
to  employment,  such  as  discrimination  or  the  non-recognition  of  skills  and  qualifications, 
which put migrants at risk of unemployment and social exclusion. The lower performance of 

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third-country nationals with respect to the indigenous population in Member States' education 
systems should also be addressed.  

A  better  monitoring  and  anticipation  of  skills  needs,  as  well  as  improvements  in  the 
recognition of skills and qualifications, also those obtained outside the EU, can substantially 
reduce the ‘brain-waste’ of highly educated migrants employed in low-skilled or low-quality 
jobs.  While  respecting  the  principle  of  Community  preference  and  of  the  right  of  Member 
States to determine the volumes of admission of third-country national workers, a mapping of 
the skills profile of third-country nationals already living in the EU, would be instrumental in 
determining how the expanding legal framework of EU and national admission schemes for 
migrant  workers  could  help  mitigate  skills  shortages.  A  flexible,  demand-driven  admission 
policy  can  make  an  important  contribution  to  meeting  future  labour  needs.  Skills  matching 
can also be improved through reinforced cooperation with third countries in the areas of skills 
recognition,  sharing  information  on  labour  market  needs,  and  working  with  recruiters  and 
employment agencies. 

Skills upgrading and matching - Key Actions 4 to 8: 

The Commission will:  

•  4.  As  of  2012, produce  an  EU skills Panorama to improve  transparency for jobseekers, 
workers, companies and/or public institutions. The Panorama will be available online and 
contain  updated  forecasting  of  skills  supply  and  labour  market  needs  up  to  2020.  It  will 
provide: i) up-to-date information on the top 25 growth occupations in the EU, and on the 
top five 'in demand' occupations per  Member  State; ii) an analysis of skills requirements 
based on the European Vacancy Monitor; iii) an analysis of skills mismatches and use of 
skills in the workplace, through surveys of employers, learners and graduates; iv) foresight 
analysis at sector level, based on the work of the European Sector Councils' on Skills and 
Employment;  and  v)  CEDEFOP9  and  Member  States’  projections.  Where  relevant  the 
Panorama  will  report  on  skills  needs  in  particularly  important  areas  such  as  science, 
technology, engineering and mathematics. 

•  5. By 2012, complete in all European languages the European Skills, Competences and 
Occupations  classification  (ESCO),  as  a  shared  interface  between  the  worlds  of 
employment, education and training. 

•  6. In 2012, consider the possibility of presenting proposals to help reform the systems for 
the  recognition  of  professional  qualifications,  on  the  basis  of  the  evaluation  of  the 
Professional Qualification Directive.  

•  7.  In  2011,  launch  a  New  Agenda  for  Integration  of  third  country  nationals,  to  provide 
improved  structures  and  tools  to  facilitate  the  exchange  of  knowledge,  and  the 
mainstreaming of integration priorities of the Member States in all relevant policy areas. 

•  8.  In  2012,  consider  the  possibility  of  presenting  proposals  to  help  improve  the 
enforcement  of  rights  of  EU  migrant  workers  in  relation  to  the  principle  of  free 
movement of workers.  

Accompanying and preparatory measures: 

9 

European Centre for the Development of Vocational Training 

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The Commission, in cooperation with Member States, will also: 

•  By 2011, propose a new benchmark on education for employability to stimulate a new 
focus on preparing young people for the transition to the labour market, propose a Council 
Recommendation  on  reducing  early  school  leaving,  and  set  up  a  High  Level  Expert 
Group on improving literacy among young people and adults. 

•  By  the  end  of  2010,  launch  an  awareness  campaign  on  how  citizens  can  benefit  from 
EU  social  security  coordination  rules  to  move  within  Europe,  without  losing  their 
rights.  

•  In  the  framework  of  the  SME  Performance  Review,  assess  future  skills  needs  in  micro 
and  craft  (-type)  enterprises  for  a  representative  sample  of  EU  Member  States,  to  better 
mainstream the needs of these enterprises in existing EU policy initiatives. 

•  As  of  2011,  support  competences  for  sustainable  development,  and  promote  skills 
development, in sectors covered by the Roadmap towards a resource-efficient Europe 
and by the new Eco-Innovation Action Plan.  

•  As  of  2011,  support  ‘knowledge  alliances’,  i.e.  ventures  bringing  together  business  and 
education/training  institutions  to  develop  new  curricula  addressing  innovation  skills  gaps 
and  matching  labour  market  needs.  The  EU  Industrial  PhDs  in  the  framework  of  Marie 
Curie actions and the Erasmus placement in companies will also be developed. 

•  In  2011,  propose  a  Council  Recommendation  on  the  identification,  recording  and 
validation of competences gained outside of formal education and training,  including in 
particular  a  European  Skills  Passport  to  help  individuals  record  and  present  the  skills 
acquired throughout their life. 

•  In 2011, present an analysis of the contribution of migration policies to labour market 
and  skills  matching  in  line  with  the  Stockholm  programme.  A  policy  network  to 
improve  the  education  of  migrants  will  be  established  to  address  the  educational 
achievement gap between migrant students and the indigenous population at school. 

•  By  2012,  reform  the  European  Employment  Services  EURES  and  its  legal  basis,  to 
develop its matching and placement capacity at the service of the European Employment 
Strategy and to expand it to support Your First EURES Job.  

•  By 2012, propose an EU-wide approach and instruments to support Member States in the 
integration of ICT competences and digital literacy (e-skills) into core lifelong learning 
policies. 

•  By  2012,  present  a  Communication  on  the  European  policy  for  multilingualism, 
proposing  priorities  in  the  education  and  training  systems,  and  a  European  language 
benchmark  based  on  results  of  the  European  Survey  on  Language  Competence  so  as  to 
achieve the "mother tongue +2" Barcelona objective. 

•  By 2012, develop in cooperation with Member States an action plan to address the gap 
in the supply of health workers. The action plan will be accompanied by a Joint Action 
under  the  Health  Programme  on  forecasting  health  workforce  needs  and  workforce 
planning. 

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•  By  2012,  map  out  and  promote  European  centres  of  excellence  within  new  academic 
specialisations for tomorrow's job. The Commission will analyse the best way to support 
mobility of students (European and international) towards these centres of excellence. 

3. 

IMPROVING THE QUALITY OF WORK AND WORKING CONDITIONS 

Mixed results on job quality across the EU over the last decade 

High quality of work goes hand in hand with high employment participation. This is because 
the working environment plays a crucial role in enhancing the potential of the workforce and 
is  a  leading  competitiveness  factor.  In  order  to  innovate  and  to  deliver  promptly  and 
efficiently, EU companies depend for their survival and expansion on a committed workforce, 
thriving in a high-quality working environment, with safe and healthy working conditions.  

During the last decade, there has been good and bad news on job quality across Europe. Job 
satisfaction has increased overall; accidents at work, including fatal accidents, have decreased 
although, at least for a minority of people, work has become more intense and stressful. On 
the  other  hand,  workers  in  involuntary  temporary  and  part-time  work  have  increased  from 
53.7%  and  18%  in  2001  respectively,  to  60.3%  and  25.6%  in  2009.  Wages  have  tended  to 
grow below productivity in most Member States, and in-work poverty is persistent: employed 
people living under the poverty threshold have remained stable at around 8% since 2005. In 
many  countries,  undeclared  work  continues  to  leave  important  segments  of  the  workforce 
unprotected and vulnerable.  

Due  to  the  crisis,  more  jobs  have  been  exposed  to  competitive  pressures  and  deteriorating 
working  conditions.  In  many  instances,  new  forms  of  work  and  a  higher  number  of  job 
transitions  have  not  been  accompanied  with  appropriate  working  conditions,  increasing 
psychological stress and psychosocial disorders. This has social and economic costs and may 
undermine Europe’s capacity to compete: unsafe, unhealthy work environments result in more 
claims for disability benefits and earlier exits from active life.  

Reviewing EU legislation and promoting 'soft' instruments 

Improving job quality will require an integrated policy response at EU level as well as action 
by  Member  States.  The  Union  has  a  solid  legislative  ’acquis’  as  a  complement  to  Member 
States’  action  in  improving  working  and  living  conditions,  ensuring  minimum  standards 
across  the  EU  on  working  conditions,  health  and  safety  at  work,  information,  consultation, 
participation  rights  of  workers,  gender  equality  and  non-discrimination,  underpinning  fairer 
competition,  high  levels  of  productivity,  and  for  the  creation  of  quality  jobs.  The  ‘acquis’ 
must  nevertheless  be  adapted:  to  clarify  the  implementation  or  interpretation  of  rules,  and 
make  them  easier  to  understand  and  apply  by  citizens  and  businesses;  to  respond  to  the 
emergence  of  new  risks  for  human  health  and  safety  in  the  workplace;  and  to  cut  red  tape. 
More generally, the legislative ‘acquis’ must be kept in tune with new working patterns and 
technologies, so that it helps rather than hinder workplace adaptation.  

Legislation at EU level is not always enough. 'Soft' instruments such as comparative analysis, 
policy  coordination,  exchange  of  good  practice,  benchmarking,  implementing  guides, 
frameworks  of  action,  codes  of  conduct  and  recommendations,  can  help  significantly  in 
shaping consensus and creating the right incentives  for action  at national or  company  level. 
Other  initiatives  should  therefore  be  put  in  place,  to  underpin  a  smarter  legal  framework, 

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consolidate a long-term strategic approach to improve the way national authorities and social 
partners  implement  legislation  at  national  level,  and  to  revise  the  concept  and  indicators  of 
quality of work.  

3.1. 

A smarter EU legal framework for employment and health and safety at work 

The Commission will carry out a large-scale, step by step evaluation of the present legislative 
‘acquis’. Work has already started with the evaluation of two significant pieces of legislation 
— on working time and on the posting of workers; it shall expand to other elements related to 
employment  and  health  and  safety.  This  comprehensive  evaluation  will  not  hinder  the 
preparation  of  new  legislative  proposals,  if  a  clear  need  arises  for  immediate  action,  and  if 
new provisions are justified by a full-fledged assessment of their economic and social impact.  

Moreover, there is a need to assess in depth a number of legal provisions which may appear as 
ineffective or difficult to enforce, such as the rules applying to the protection of beneficiaries 
of  supplementary  occupational  pensions  in  case  of  the  employer’s  insolvency.  The 
Commission  will  propose  to  include,  after  appropriate  assessment,  seafarers  and  fishermen, 
within  the  scope  of  the  EU  employment  legislation.  In  the  area  of  occupational  health  and 
safety,  priorities  will  include  the  review  of  the  directives  dealing  with  the  protection  of 
workers  exposed  to  electro-magnetic  fields,  to  carcinogens  and  mutagens,  and  to  the 
prevention  of  musculoskeletal  disorders.  The  risks  from  exposure  to  environmental  tobacco 
smoke will deserve special attention. In addition risks associated with nano-materials and the 
causes of the growing incidence of mental illnesses in the work place will be investigated. 

3.2. 

A strategic approach based on 'soft' instruments 

The Commission can play a role and mobilise resources from Member States, social partners 
and  EU  agencies.  Through  European  social  dialogue,  cross-industry  and  sectoral  social 
partners have also developed  an important body of  'soft'  instruments,  including  autonomous 
agreements; these contribute to improve working standards and have a direct, concrete impact 
on the working conditions of millions of workers in the EU. While respecting the autonomy 
of  social  partners,  the  Commission  will  continue  to  support  and  facilitate  this  activity  and, 
where justified, evaluate the impact of such agreements. 

The lessons learned from the EU Strategy  on  Health  and  Safety  at  Work  2007-2012  should 
serve to launch a debate about the renewal of that Strategy, as well as its possible extension to 
other policy areas.  

Undeclared  work,  including  misclassification  by  employers  of  employees  as  independent 
contractors,  continues  to  expand  and  increasingly  gains  a  cross-border  dimension:  further 
efforts  are  needed  to  strengthen  cooperation  at  EU  level  between  labour  inspectorates  and 
other bodies whose mission is to control the application of employment law.  

Efforts are also needed to review the EU definition and common indicators of quality of work, 
and  make  them  more  operational  for  the  evaluation  and  benchmarking  of  Member  State 
policies  in  this  area.  In  particular,  the  approach  to  job  quality  should  be  re-examined  in  the 
light of recent policy developments such as flexicurity and ‘making transitions pay’, and the 
development of new working patterns. 

Quality of work and working conditions - Key Actions 9 to 12: 

The Commission will: 

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•  9. In 2011, review the Working Time Directive, and make a legislative proposal aiming 
at  improving  the  implementation  of  the  posting  of  workers  directive.  Wherever 
appropriate,  the  Commission  will  initiate  action  to  amend,  clarify  or  simplify  existing 
employment-related legislation, if justified by an impact assessment, and after consulting 
EU social partners.  

•  10. In 2011, undertake the final evaluation of the EU Strategy 2007-2012 on Health and 
Safety at Work, and on this basis propose in 2012 a follow-up Strategy for the period 
2013-2020. 

•  11. In 2012, review the effectiveness of EU legislation in the area of information and 
consultation  of  workers,  as  well  as  EU  directives  on  part-time  work  and  fixed-term 
contracts and their impact on female participation in employment and the equal pay; 
working with social partners and respecting the autonomy of the social dialogue. 

•  12.  By  2014,  conduct  a  comprehensive  review  of  health  and  safety  legislation  in 
partnership with Member States and the European social partners, in the framework of the 
Advisory Committee on Safety and Health at Work.  

Accompanying and preparatory measures: 

The Commission, in cooperation with Member States and social partners, will: 

•  In 2011, examine the feasibility of an initiative to reinforce cooperation among labour 
inspectorates  and  other  enforcement  bodies,  with  the  aim  of  preventing  and  fighting 
undeclared work. 

•  In  2011,  review  and  streamline  the  policy  concept  of  quality  of  work,  in  cooperation 

with Member States and social partners. 

•  In  2012  examine  the  impact  of  employment-relevant  non-discrimination  directives, 

namely 2000/78/EC10 and 2000/43/EC11. 

4. 

SUPPORTING JOB CREATION  

The  economic  crisis  had  a  dramatic  impact  on  job  creation,  but  some  obstacles  to  labour 
demand are structural 

It is not enough to ensure that people remain active and acquire the right skills to get a job: the 
recovery  must  be  based  on  job-creation,  which  depends  first  and  foremost  on  economic 
growth. And indeed, since 2008 the economic downturn has had a tremendous impact on job 
creation:  it  has  wiped  out  much  of  the  steady  gain  in  EU  employment  growth  and  the 
reduction in unemployment witnessed over the preceding decade. Economic growth in the EU 
began  again  in  the  second  half  of  2009,  after  five  quarters  of  consecutive  contractions;  EU 

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Council  Directive  2000/78/EC  of  27  November  2000  establishing  a  general  framework  for  equal 
treatment in employment and occupation 
Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between 
persons irrespective of racial or ethnic origin 

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labour markets have started to show some signs of stabilisation, and job vacancy rates have 
gained some ground in recent quarters.  

While these positive developments should be celebrated, not all the changes seen over the last 
two  years  were  the  result  of  the  economic  climate:  job  creation  also  depends  on  the  labour 
market  policies  implemented  at  EU  and  national  level.  Stimulating  growth  may  not  be 
sufficient to create more and better jobs: the business environment needs to be job-friendly.  

Policies designed to promote job creation must take into account the important contribution of 
small and medium-sized enterprises (SMEs) for a large proportion of Europe’s economic and 
professional activity. Over 99% of businesses in the EU are SMEs, which provide two-thirds 
of all private sector jobs, pointing to the importance of paying due attention to the needs of 
SMEs in the design of employment-relevant legislation Yet too few of our innovative SMEs 
grow into larger companies employing a bigger number of people; there are also fewer young, 
R&D-intensive innovative firms in the EU than in the US. Important shortages in innovation 
and  e-skills  prevent  SMEs  from  adopting  innovative  smart  business  models  and  new 
technologies. The self-employed account for 15% of the EU workforce, and even in periods 
of economic prosperity their numbers have not increased substantially: the proportion of self-
employed workers within the total EU workforce fell by 1 percentage point between 2000 and 
2008.  

Restoring job creation to ensure that all those who want to work can have a job 

Economic  growth  remains  the  main  lever  to  job  creation.  The  Europe  2020  Flagship 
Initiatives  ‘Innovation  Union’12  and  'Industrial  Policy  for  the  Globalisation  Era'13  set  out  an 
important  package  of  actions  for  a  new  strategic  approach  to  innovation  and  a  competitive 
industrial base; they should contribute to boost economic growth, anchoring it on knowledge 
and  high  value-added  activities  and  to  help  identify  opportunities  for  investment  and  job 
creation. The "Single Market Act"14 also puts forward a package of proposals to reap the full 
potential  of  the  single  market  and  enhance  growth  and  jobs.  Similarly,  the  “Youth  on  the 
Move”15 Flagship Initiative has already outlined a specific framework for youth employment.  

Beyond these initiatives, however, the right conditions to create more jobs must also be put in 
place,  particularly  at  both  ends  of  the  skill-spectrum.  Acknowledging  that  the  EU  still  has 
substantial  room  to  improve  the  way  it  brings  innovation  to  the  production  systems,  the 
Commission  will  propose  ways  to  facilitate  job  creation  in  companies  operating  with  high 
skills  and  R&D  intensive  business  models.  It  will  also  look  at  incentives  for  employers  to 
recruit  the  long-term  unemployed  and  other  workers  drifting  from  the  labour  market.  In 
complement  to  Member  States  efforts,  the  Commission  will  also  pay  particular  attention  to 
entrepreneurship and self-employment as essential means to increasing employment rates. All 
initiatives  will  respect  the  "think  small  first"  principle  to  take  into  account  the  specific 
characteristics of SMEs. 

12 
13 
14 
15 

COM(2010) 546, 6.10.2010. 
COM(2010) 614, 28.10.2010. 
COM(2010) 608, 27.10.2010. 
COM(2010) 477, 15.9.2010. 

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4.1. 

Strengthening the framework conditions for job creation 

Commission  estimates  indicate  that  a  25%  reduction  of  administrative  burden  could,  in  the 
long-run,  result  in  a GDP increase of  1.4%. In order to combine economic growth with  job 
creation, administrative obstacles to set up one’s business and to  hiring should be removed. 
This  is  particularly  important  in  companies  operating  in  fast-moving  sectors  and  with  R&D 
intensive models, where the demand for high skills can be significant. Indeed, achieving the 
target of spending 3% of EU GDP on R&D by 2020 would induce the creation of 3.7 million 
jobs by 202016. In this respect, more investment should be undertaken to increase the number 
of graduates in science, technology, engineering and maths (STEM) so as to create the right 
conditions  to  deploy  key  enabling  technologies,  essential  in  the  R&D  and  innovation 
strategies of industry and services.  

Stimulating recruitment through a reduction of non-wage labour costs (e.g. with a shift from 
labour  taxes  to  energy  consumption  or  pollution)  is  paramount  in  times  of  high 
unemployment,  since  the  costs  of  sustaining  unemployment  insurance  systems  will  most 
probably outweigh the reduction of revenue for the social security system. This is particularly 
important for those who experience particular difficulties to find new jobs after a recession, 
such  as  the  low  skilled  or  the  long-term  unemployed.  Incentives  to  shift  jobs  from  the 
informal into the regular economy are also essential; a good case in point is the development 
of regular employment in domestic, social care and other not-for-profit activities, offering an 
important entry to the labour market for those furthest away from it.  

4.2. 

Promoting entrepreneurship, self-employment and innovation 

The social economy enterprises, co-operatives, mutual societies as well as micro-enterprises, 
including  self-employment,  can  offer  a  source  of  innovative  solutions  to  respond  to  social 
demands  in  a  participative  process,  providing  specific  employment  opportunities  for  those 
furthest  away  from  the  labour  market.  The  Commission  communication  on  the  “Single 
Market Act”17 already announced a number of initiatives actions aiming at the development of 
the social economy sector and social businesses, such as the Social Business Initiative or the 
public  consultation  on  the  implementation  of  the  regulation  on  the  European  Cooperative 
Statute.  The  European  Institute  for  Innovation  and  Technology  (EIT)  will  foster  business 
creation  and  development  through  innovation-driven  research,  particularly  through  a  strong 
emphasis on entrepreneurship. 

Entrepreneurship  should  become  a  more  widespread  means  of  creating  jobs,  as  well  as 
fighting social exclusion. The accent must be put on training to ensure that education systems 
truly  provide  the  basis  to  stimulate  the  appearance  of  new  entrepreneurs,  and  that  those 
willing to start and manage an SME acquire the right skills to do so. Member States should 
develop  entrepreneurship  in  school  curricula  to  create  a  critical  mass  of  entrepreneurship 
teachers, and to promote cross-border universities and research centres’ collaborations in the 
area of innovation and entrepreneurship. 

Supporting job creation - Key Action 13: 

13.  In  2011,  the  Commission  will  propose  guiding  principles  to  promote  enabling 
conditions for job creation. These will include ways to: i) address administrative and legal 

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COM(2010) 546, 6.10.2010. 
COM(2010) 608, 27.10.2010. 

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obstacles to hiring and firing, to creating new businesses and to self-employment; ii) reduce 
non-wage labour costs; iii) move from informal or undeclared work to regular employment. 

Accompanying and preparatory measures: 

The Commission, within the Small Business Act, will: 

•  By the end of 2010, launch a proposal to extend and transform the Preparatory Action 

Erasmus for Young Entrepreneurs (EYE) into a permanent programme.  

•  Support  specific  teacher-training  programmes  as  well  as  the  exchange  of  best  practice  to 
develop  teachers’  training  in  entrepreneurship,  and  launch  a  policy  handbook  on 
entrepreneurship  education  in  order  to  enhance  the  spread,  impact  and  quality  of 
entrepreneurship education in Europe. 

*** 

EU FINANCIAL INSTRUMENTS AT THE SERVICE OF NEW SKILLS AND JOBS 

In  light  of  the  current  fiscal  constraints  on  national  budgets,  Member  States  and  the 
Commission  must  focus  on  making  better  use  of  EU  funds.  Cohesion  policy  contributes 
already to the development of new skills and to job creation, including in the expanding area 
of  the  green  economy.  More  can  be  done  to  fully  exploit  the  potential  of  the  EU  financial 
instruments and regulations that support reforms in the fields of employment, education and 
training: this means the European Social Fund (ESF) in the first place, but also the European 
Regional  Development  Fund  (ERDF),  the  Rural  Development  Fund  (EARDF),  the  Lifelong 
Learning Programme and Progress. 

In  particular,  in  line  with  the  proposals  set  out  in  the  Budget  Review18  and  in  the  Fifth 
Cohesion Report19, the impact of the Cohesion policy instruments, including ESF, should be 
enhanced  by  focusing  on  four  priorities:  1)  concentrating  financial  resources  in  a  fewer 
number  of  priorities;  2)  strengthening  conditionality  and  incentives  to  stimulate  Member 
States  to  achieve  institutional  reforms  announced  in  the  National  Reform  Programmes;  3) 
focusing  on  results,  through  a  set  of  clear  and  measurable  targets  and  indicators  agreed 
between the Commission and Member States; and 4)establishing development and partnership 
investment contracts between the Commission and Member States. 

While  the  substantial  review  of  financial  instruments  will  be  part  of  the  discussions 
accompanying the preparation of the next Multiannual Financial Framework, these four core 
priorities should serve as guidance to strengthen, as of now, the contribution of the EU funds 
and of the EU budget to the New Skills and Jobs Agenda. 

Member States are invited to  focus ESF and other EU funds interventions on key structural 
reforms,  on  fostering  structural  conditionality,  and  thus  contribute  to  the  key  actions  and 
measures proposed in this Agenda, and to the objectives and national targets of Europe 2020. 
In particular: 

18 
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COM(2010) 700, 19.10.2010. 
COM(2010) 642, 9.11.2010. 

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1. On Flexicurity: ESF programmes can support the design of better policies such as active 
labour  market  measures  and  lifelong  learning,  tools  and  institutions  including  public 
employment services. Social partners can also be supported by the ESF through partnerships 
for  reform  in  employment.  ESF  support  to  strengthen  administrative  capacity  can  underpin 
the  7th  Framework  Programme  for  research, 
integrated  flexicurity  approaches; 
technological development and demonstration activities can contribute to evidence-based 
decision making. 

2.  On  skills  upgrading  and  matching:  The  ESF  can  invest  in  the  forecasting  and 
development  of  qualifications  and  competences,  and  support  the  reform  of  education  and 
training systems to strengthen their labour market relevance. The exchange of experiences and 
networking  between  higher  education,  research  and  business  centres  to  address  new  skills 
requirements  can  also  be  funded.  Jobs  related  to  the  greening  of  the  economy,  and  to  the 
health and social services sector can also benefit from strengthened ESF and other EU funds 
support,  as  well  as  ICT  competences  in  view  of  the  importance  of  ICT  in  today's  economy 
and society. ERDF supports investments in education infrastructure. Lastly, the ESF and other 
Structural funds could act in synergy with other instruments, such as the European Fund for 
the  Integration  of  third-country  nationals  to  increase  the  participation  of  migrants  in 
employment and combat discrimination, and the Lifelong Learning Programme. 

3.  On  quality  of  work  and  working  conditions:  The  ESF  can  co-fund  the  design  and 
dissemination of innovative and more productive forms of work organisation, including better 
health  and  safety  at  work.  With  a  view  to  eliminating  gender  gaps,  the  ESF  can  support 
measures to  reconcile work and private life,  gender  mainstreaming,  and  actions  for  tackling 
gender-based segregation in the labour market.  

4.  On  job  creation:  The  ESF  and  other  EU  funds  can  support  the  promotion  of 
entrepreneurship, business start-ups and self-employment. Financial engineering can provide 
the  missing  link  between  financial  markets  and  small  entrepreneurs.  The  ESF,  the  ERDF-
funded  Joint  Action  to  Support  Micro-finance  institutions  in  Europe  (JASMINE)  and  the 
recently  created  European  Progress  Microfinance  Facility  can  help  individuals  get  out  of 
unemployment and social exclusion by setting up business or becoming self-employed. These 
measures are complementary to other ESF investments for the most vulnerable.  

Lastly, the ESF and other EU funds can also provide specific, targeted support to specific 
groups in all the priorities areas of the Agenda; a case in point is the support provided in 
some  Member  States  to  the  Roma,  in  areas  such  as  counselling,  education,  training  and 
guidance for the self-employed. 

CONCLUSION 

The 13 key actions and the accompanying and preparatory measures proposed in this ‘Agenda 
for new skills and jobs’ require a mix of EU policy instruments, including legislation, policy 
coordination,  social  dialogue,  funding  and  strategic  partnerships.  The  Agenda 
is 
complemented by other EU initiatives aiming to address the concerns of specific groups, such 
as the Europe 2020 Flagship Initiative ‘Youth on the Move’20, and the ‘Strategy for equality 
between  women  and  men  2010-2015’21.  More  importantly,  many  of  the  policy  areas  of  this 

20 
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COM(2010) 477, 15.9.2010. 
COM(2010) 491, 21.9.2010. 

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Agenda, such as job creation, depend on – and are only part of - the integrated approach of the 
Europe 2020 strategy. 

Delivery and participation are essential to the success of the Agenda. In particular, social 
partners play a key role in the implementation of flexicurity and other aspects of this flagship 
initiative. These actions could be analysed at EU level every year in a Tripartite Social Forum. 
Cooperation  at  local  and  regional  level  —  between  social  partners,  Public  Employment 
Services, social services, education/training institutions, civil society organisations — will be 
important to reach those who find it hard to get a firm foothold in the labour market. 

EU  funds,  particularly  the  European  Social  Fund,  can  significantly  contribute  to  the  EU 
Agenda and act as a catalyst and as leverage in support of the Union’s policy priorities. 

The Commission will also advance the international dimension of this Agenda. The crisis 
has prompted the emergence of a global consensus for economic and financial objectives to 
co-exist equally with employment and social ones. Now that the recovery is starting to take 
shape,  the  Commission  will  encourage  pooling  of  resources  internationally,  in  multilateral 
frameworks (ILO, G20, OECD, and UN), within existing bilateral cooperation structures with 
strategic  partners  (notably  the  US,  Canada,  China,  India,  Japan,  South  Africa,  Russia  and 
Brazil), within regional policy frameworks (ASEM and EU-Latin America).  

The  Commission  will  revise  the  Agenda’s  priorities  in  2014,  and  adapt  them  to  the  new 
Multiannual Financial Framework. Till then, it will report on progress in the Annual Growth 
Surveys within the Europe 2020 strategy.  

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