January 14, 2014 / 10:52 AM / in 4 years

Inflexible education exacerbates EU youth crisis: study

BRUSSELS (Reuters) - Spain’s construction sector contracted by more than 60 percent during the economic crisis, yet Spanish universities kept churning out architects and construction engineers - the number has risen 174 percent since 2005.

A general view of the construction site of the Panama Canal Expansion project is seen on the outskirts of Colon City January 2, 2014. REUTERS/Carlos Jasso

That, according to research by management consultants McKinsey & Company, exposes a critical source of Europe’s youth unemployment crisis: the inability of the education sector to respond quickly and reshape the work force.

In a study published this week, based on a survey of 5,300 young Europeans, 2,600 employers and 700 technical schools, colleges and universities, McKinsey found a severe mismatch between graduates and the skills businesses say they need.

That exacerbates youth unemployment, which averages nearly 25 percent across the euro zone and exceeds 50 percent in some countries including Spain, and harms growth, further denting Europe’s prospect of emerging from five years of turmoil.

“Policymakers, educators and business must all break out of their silos and work together more closely to avert what is a growing crisis,” the consultancy said in the report, adding that it was up to businesses to take the lead in pushing for change.

Europe’s policymakers have started to act. Last year, EU leaders established a “Youth Guarantee” scheme, setting aside up to 8 billion euros to help provide jobs, apprenticeships, traineeships or further education to school leavers.

The scheme is based on programs in Finland, Austria and Germany which have helped them achieve the lowest youth unemployment rates in Europe. While 50 percent of young Greeks are out of work, only 7.5 percent of German youths are.


“What we also need is better apprenticeship opportunities at lower costs,” said Mona Mourshed, a senior partner at McKinsey and co-author of the report “Education to Employment: Getting Europe’s Youth into Work”.

Another issue is languages. Spanish students may be graduating with good skills, but they can’t easily be put to use in Spain. A second language would allow them to find work abroad or with an international company at home.

While aware of the critical link between education and employers’ needs, the European Commission, the EU executive, has struggled to shape policy in an area where national governments, not Brussels, still bear the main responsibility.

“This is crucial if we want to place education for employability at the core of Europe’s policies - a point that I have been making for years,” said Androulla Vassiliou, the EU commissioner responsible for education, culture and youth.

“In spite of the high number of job seekers, many employers are unable to fill vacancies because they cannot find people with the right skills.”

With the euro zone and broader EU economy showing signs of recovery after years of low growth or recession, the moment is ripe to ensure that students learn the right skills for the jobs that will become available in the years ahead, the study said.

“Students need more and better information about different career paths and they need to be motivated to use it,” the study said, highlighting concerns about higher education becoming more expensive and a growing bias against basic vocational training.

“Youth unemployment is a profound challenge for Europe and the financial crisis has made it worse.”

Reporting by Martin Santa; Editing by Luke Baker and Gareth Jones

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