This blog was co-authored by Jeffrey Brown and Philippe Lorenz.
Read the full report: The Future of Work & the Trans-Atlantic Alliance
From the United States to Europe, labor market disruption ushered in by automation and technology is increasingly recognized as a first-order policy challenge. Yet, we are marching into the future with few concrete policy solutions.
The Necessity of Trans-Atlantic Exchange
With researchers, policymakers and the public struggling to grasp the implications of this disruption, the need to mobilize public policy and concrete solutions has never been greater.
Transnational exchange is crucial to developing solutions, and the United States and Europe have much to learn from one another. They share highly productive and well-trained workforces and benefit from a track record of collaboration on topics such as security. As in years past, trans-Atlantic collaboration can serve as a hedge against any instability on the horizon.
However, to date, policy responses seeking to soothe disruption in manufacturing employment have taken precedence over long-term solutions to retrain service sector workers who will likely bear the brunt of disruption in the years ahead. With this in mind, how can policymakers design sound policy? We suggest harnessing the potential of trans-Atlantic exchange by building-out four nodes of exchange.
Constructing a Trans-Atlantic Framework on the Future of Work
1. Update vocational training models: As labor markets evolve, government-sponsored vocational training may churn out workers whose skills do not keep up with employers’ demands. U.S. policymakers can look to Europe for vocational training models that are agile and resilient to technological disruption.
For example, Switzerland “future proofs” trainees’ education by prioritizing general education, making it easier for displaced workers to transition to other work. In Denmark, skilled and unskilled workers and job seekers can select from 3,000 certified, sector-specific training courses geared toward the needs of local companies. Danish companies work hand-in-hand with local workforce development boards to periodically update – and eliminate – training courses.
2. Institutionalize lifelong learning: Increasingly, digital platforms such as MOOCs and real-time video courses allow students and workers to build skills without formal schooling or training. Federal employment agencies could broaden the availability of non-formal learning programs by funding them to scale and incentivizing their use.
For example, Germany’s Federal Ministry of Labor and Social Affairs advocates the distribution of portable personal spending accounts of $20,000 to adults at the start of their working lives. Workers can choose to use the money for training, to start a business, or to take time off for a sabbatical, thereby increasing workers’ self-determination and labor mobility.
3. Scale skills forecasting and strategic human resources planning: As labor markets evolve, it will be crucial for workers and employers to have reliable information on the most in-demand skills. Information on skills shortages and mismatches, structural and frictional unemployment, and trends in labor supply and demand should inform labor market policy and staffing.
For example, Germany’s “INITIATIVE New Quality of Work” provides SMEs with a comprehensive set of tools that forecasts a company’s staffing and skills requirements. At the European level, the European Centre for the Development of Vocational Training has launched an initiative on future skills, with an emphasis on measuring skills mismatches.
4. Spur the development of innovative SMEs by targeting government investment and facilitating technology transfer: In the U.S., the Small Business Innovation Research program requires federal agencies to set aside a portion of their R&D budget to fund SMEs, contributing to large-scale technology transfer, early-stage funding and connecting mature SMEs to venture capital. Through this link, small businesses gain access to advanced research laboratories, facilitating the commercialization and development of products. Such programs have contributed to increased technological innovation among small businesses and increased employment, and have in part helped generate clusters in Silicon Valley and Boston.
A Final Word
Given the breadth and depth of the policy challenges posed by the future of work, trans-Atlantic exchange and lesson-sharing can provide a base to generate sound policy. Building on a strong history of collaboration and shared challenges, it is only natural that the U.S. and Europe team up yet again to design policy responses to the future of work.
RELATED: Go to the infographic explaining their latest report on the trans-Atlantic exchange in the future of work.