Anticipating and matching skills demand and supply: synthesis of national reportsAuthor: Lorenz Lassnigg. Anticipating and matching skills demand and supply: synthesis of national reports
Preface

The European Training Foundation (ETF) supports policymakers and practitioners in its partner countries in their efforts to improve their systems of matching supply and demand for skills. To this end, the ETF has launched a three-year innovation and learning project, ‘Anticipating and matching demand and supply of skills in ETF partner countries’, which is being implemented from 2011 to 2013. The project has pooled a group of renowned international experts together with national experts from a representative range of the ETF partner countries. Conceptual clarification on the basis of international state-of-the-art approaches and stocktaking of current practices and challenges in skills anticipation and matching in ETF partner countries were the main tasks of the first year. Together with the experts, the ETF analysed current issues and practices and discussed the pros and cons of different approaches and methodologies for skills anticipation and matching in view of the current needs and conditions in transition and developing countries. Anticipation and matching approaches need to be tailor-made to fit the specific framework conditions and needs in each country. The results of the work in 2011 are documented in a first set of papers: a methodological paper on how to measure mismatch, a paper on conditions and challenges for transition and developing countries, and national stocktaking reports (country reports). This synthesis report provides a cross-country analysis of the national reports. For further information please also consult the ETF website (www.etf.europa.eu). The ETF is delighted to disseminate working papers, thus contributing to an informed and lively debate with ETF colleagues, external experts and practitioners in ETF partner countries. The author owes a great deal to the colleagues involved in discussions and presentations during the course of this project, and in particular to Rob Wilson for his thorough reading of the report and his many very productive and encouraging suggestions, as well as to Will Bartlett, Lizzi Feiler, Eduarda Castel-Branco and Timo Kuusela for their helpful comments. The author is, of course, still responsible for the content of this report. Lizzi Feiler
Introduction

This report is part of a wider project that rests on a partnership between the ETF and a network of experts from eight countries, assisted by three international experts together with experts from the ETF. The objective of the project is to find methods to improve the anticipation and matching of the demand for and supply of skills in ETF partner countries. In addition to an analysis of the approaches taken at country level to tackle anticipation and matching problems, three other inputs are provided: an analysis of how matching and mismatch can be measured using the available data (Johansen and Gatelli, 2012); expertise on the specific situations and problems of the economy, the labour market and the provision of skills in transition countries (Bartlett, 2012); and an analysis of how forecasting can be used and developed to improve anticipation (Wilson, 2011). The results are used and taken forward in a position paper provided by the ETF (Feiler et al., 2012). A key part of the project is the ensemble of country reports (see References) provided by the network of country experts2, based on a common framework developed and agreed as the project’s first step (see Annex 2). The project questions some common assumptions about matching and anticipation by accepting the complexities inherent in these tasks and policies – complexities which cannot be tackled easily. This means accepting, among other things, that:
+ matching is not an unsophisticated process of trying simply to fit each and every person into a particular job – that is, of fitting round pegs into square holes;
+ a vast spectrum of skills is used in all aspects of life, and education is not just about work – most people can do many jobs and most jobs can be done by many people with different skill sets;
+ jobs themselves also change dynamically over time, as do individuals and their skill sets.
The synthesis draws on country reports from Croatia, Egypt, Kyrgyzstan, the Republic of Moldova3, Montenegro, Serbia, Turkey and Ukraine. These eight countries differ in many respects, including size, economic structures, location, history and institutional background, but three particular groups may be distinguished: transition countries which were part of the former Soviet Union, transition countries from former Yugoslavia, and Mediterranean countries. This report looks at the experience of anticipation and matching of the demand for and supply of skills in these countries, drawing upon a broad range of previous work in this area. The project as a whole has taken a broad conceptual approach to the problems of matching and anticipation of skill requirements. A key issue is that the tasks involved in matching and anticipation span several levels of aggregation, whereas the perception of them is frequently confined to selected aspects or levels.
+ Work on skills anticipation is in general emphasised very strongly at the macro level, but it is not taken into account so much that everyone is implicitly anticipating skills needs all the time.
+ In skills matching the emphasis is heavily laid on the micro level (e.g. by the matching models in labour economics), or on the role of career guidance and individual support through public employment services (PES), whereas, in fact, matching also involves practices at more aggregate meso or macro levels carried out by the state and others, for instance institution building, and policy measures, which are taken into account to a lesser extent.
7. SUMMARY AND CONCLUSIONS

In this paper we have attempted to analyse the practices described in the country reports on the basis of a conceptual framework that distinguishes matching and anticipation as different sets of practices performed by various kinds of actor and shaped by institutional and organisational frameworks.
Data and information play a crucial role in these practices and frameworks, as they are needed for structuring the perception of how matching processes operate at the micro level. The classification systems used work as a symbolic structure that somehow creates what happens in matching. These structures are also an important target of deliberate strategies of matching, for example, changes of occupations or qualifications, or even creating a new classification structure by integrating the new concept of ‘knowledge, skills and competences’ within qualifications frameworks. Anticipation is seen as a set of practices that intervene in ongoing matching processes by introducing an explicit and systematic way of dealing with the future. Three functions are distinguished in anticipation that must be recognised as equally important: (i) knowledge creation, (ii) information dissemination, and (iii) implementation by means of deliberate anticipation and matching policies. Thus the various methodologies of knowledge creation must be deliberately embedded in broader practices and frameworks of matching.
A distinction has also been made between initial and continuing education: the former is related to the mid and longer terms, whereas the latter is related to the short-term adaptations. It is this difference in time frames that makes explicit and systematic anticipation so important in initial education, in particular if it provides broader and more holistic qualifications that need time for their production. The analysis has shown a broad array of matching and anticipation practices in place in the partner countries. Despite this wealth of practices, a great deal of uneasiness with the matching situation is common, and we can observe that the perception of mismatch is often based on rather vague indications, which are often extrapolated similarly vaguely into the future. We can infer that a clear observation and analysis of the current situation is needed. This is an important part of the knowledge creation function, and must also be disseminated and shared among the actors involved. The other important aspect of knowledge creation is the systematic evaluation of possible future developments both by quantitative forecasting or projecting and by qualitative methodologies such as scenarios.
A key point of the second function, the dissemination of the knowledge created, is the combination of that knowledge with the informal knowledge that the various actors in these processes already have. If this is not done, the results of the forecasting models will not be used effectively. Credibility is a function of proper methodologies among researchers, but among practitioners and policymakers credibility is based on the merging of results with their informal knowledge. To achieve this, publication is not enough; practical activities which bring the various actors together in organised ways must be established.
This brings us to the third function, implementation, which refers to a broad array of ongoing practices and beliefs into which the results of anticipation must be infused. Mapping these approaches and methodologies has been an important goal of this report, and a basic finding is that success depends less on the application of certain methodologies than on the quality of the relationship of the main ingredients in the system to each other. These main ingredients seem to be:
+ good data about the present (and the past);
+ a good understanding of the present situation, and how it is produced by the interplay of the various actors and institutions;
+ a robust approach and methodology for the production of knowledge about the future;
+ an approach to dissemination among the actors that is related to practical options;
+ a realistic approach to implementation.
From the analysis we can see some evidence of a firm intention to use forecasting to improve planning mechanisms (e.g. in Ukraine). But it is important to recognise that such approaches have not worked so well in the past when applied mechanistically. Previous reviews suggest that it is not possible to plan education and training systems in detail from the top down, and the conceptual approach adopted here suggests that a mechanical application of forecasting will be unlikely to work any better in the future. The reason is that these attempts will not produce enough credibility for the self-interested actors on the supply side (education and training providers) to act seriously on these predictions, especially if, with the passing of time, the predictions turn out to be not as good as expected.
Another strong message emerging from the reports is the hope that the provision of good forecasts will lead the actors to make good decisions. However, there are different positions and expectations about the uses of forecasting. We know from systems where forecasts have been established for a long time that they do not necessarily influence the actors’ decisions. Debates about what the right decisions might be are common, as is the complaint that young people make the wrong choices. Detailed figures from forecasts mostly commissioned at the aggregate policy level are available, and it is tempting for the actors to take them at face value and to try to ‘implement’ them in one way or another. But there is broad agreement that it is precisely the detailed forecasts and projections that are most often wrong, whereas the general messages that emerge from them that are robust and useful; the key is to recognise that forecasts cannot be used mechanistically to calculate how many plumbers are needed in a given locality. It is a question not of making a single right decision but rather a well-informed decision resulting in an outcome which reflects the uncertainties we all face, and which is ‘good enough’ (and is also one of many possible such outcomes).
So the way towards improvement seems to be to understand how matching happens in a concrete system, to analyse the strengths and weaknesses in that system, and to try to improve by considering the ingredients identified in a balanced way. First, the availability of sufficient data and a good understanding of the current situation must be established. The big gap in this area concerns issues of quality, that is, the qualitative aspects of demand as well as supply; for if there is a lack of information about quality, the quantitative data can only partly be understood. We have seen that many questions are still open in understanding the current situation. Even if more in-depth analyses are available, the policy conclusions about matching are not always clear, as the case of Croatia shows. A good example is the issue of overeducation and undereducation. Overeducation is considered a problem in a majority of the partner countries; the only clear exception is Turkey, where a quantitative increase in higher education is considered necessary for the future demand envisaged. We can see that the evaluation of the situation is often quite difficult. Often there are doubts about the quality aspects of a big expansion in higher education, but on the other hand the returns to higher education are relatively high, possibly also reflecting processes of downward displacement of other lower-level qualifications. Overeducation is in itself a contested and contradictory issue that can only be adequately understood in the overall context; on the one hand a higher level of education normally reflects a better utilisation of young people’s potential, while on the other, if there are quality problems in higher education, the quality of the lower levels of the education systems cannot be expected necessarily to be substantially better. Second, a robust approach and methodology for the production of knowledge about the future is necessary. However, developing forecasts is only one element in this process. Forecasts cannot tell the ‘truth’ about the future but should be used to help improve understanding of how systems work, and what might happen next, rather than as an input for mechanistic planning for the future. In particular, top-down plans based on mechanical forecasts are unlikely to have successful outcomes. An alternative would be to devise decentralised bottom-up implementation processes based on subsidies for skills providers, employers and/or individual trainees. This applies in particular to continuing education and to the need to maximise flexibility and informed choice. Anticipation systems are needed more on the information side of this equation. The distinction between initial and continuing education is vital. For initial education, at least the compulsory part of it, medium- to long-term forecasting and anticipation systems are indeed needed in order to plan effectively for at least some of the long-term investment decisions in initial education capacity and processes.
Third, it is not enough for knowledge to be available; it must be brought to the actors at the various levels, and they must be enabled to use it. This issue is often neglected in discourses about anticipation, as the provision of good information is expected to work somehow automatically. The approaches of foresight and knowledge management consider this point; the option according to these approaches would be to establish organisational or institutional structures that include networks of the actors involved and are able to combine the knowledge produced by formal methods such as forecasting with the actors’ own informal knowledge. This kind of communication can, in particular, contribute to a better understanding of the current situation. Several mechanisms of this kind are growing in the partner countries and should be evaluated and further developed.
Finally, reasonable approaches for the implementation of deliberate anticipation and matching strategies must be found and developed. Policies for matching can be seen as a first step. They concern the current situation and the short term, and if evaluated they also contribute to the understanding of the situation. Anticipation can be seen as a further step. As has been said above, initial education is a priority area here for longer-term approaches. Several approaches have been set up in the partner countries, but most of them are rather recent. It seems that they can provide a sometimes considerable improvement in understanding; however, the question of how to make practical use of this understanding is yet to be fully addressed. Download Anticipating and matching skills demand and supply: synthesis of national reports.