Central, Eastern and Southeastern European countries need to boost adult learning to deal with the pressures of digitalisation and decarbonisation on the labour market. Current participation remains low, as shown in Figure 5 above. Broadening firms’ investment into training is pivotal here, as many economies in the region have a high share of jobs at risk of being automated.
Boosting adult learning, including digital learning opportunities, needs to be combined with efforts to strengthen quality and inclusiveness in education. Beyond technical skillsets, strengthening the focus on communication, creativity, critical thinking and leadership skills should be prioritised, together with policies that foster inclusiveness to mitigate risks of early detachment from the labour market.
Strengthening the four elements of this new growth model together would bring benefits to citizens in the region. The goals of increasing innovation, digitalisation, making growth more sustainable and expanding skills are closely intertwined. While innovation is increasingly digital, the technologies (to be) developed can power a successful green transition. Skills underpin these processes and enable individuals to seize the opportunities of economic transformation.
The shock from Covid-19 has amplified the structural challenges the economies of Central, Eastern and Southeastern Europe are facing. Lockdowns have demonstrated the critical importance of digitalisation for competitiveness and economic resilience. Moreover, they have showed that alternative, sustainable ways of working are possible. At the same time, the pandemic may result in the widening of inequalities and societal fault lines if the impact is not adequately addressed and countries in the region are slow to embrace structural transformations.
Recovery strategies centred on the four elements of this new growth model can lead to robust and sustainable growth, but leaving the bottlenecks unaddressed could jeopardise longer-term competitiveness. National recovery plans to set out key public investment projects and reforms should reflect these considerations.
This article was also published on the London School of Economics’ blog on European politics and policy. For more information on this topic, see the authors’ working paper, which discusses convergence through green and inclusive investment.
Áron Gereben and Patricia Wruuck work in the Economics Department at the European Investment Bank.