The structures of European economies and the types of jobs that they support are changing. There has been an EU-wide shift in the labour market away from low-skilled jobs and towards high-skilled ones, but this shift has proceeded at a slower pace than the shift in the qualifications of the workers that are available to employers. At the same time, young people are finding it increasingly hard to get a foothold in the labour market, and the proportion of the workforce employed on full-time, permanent contracts has shrunk.

Some of the changes are cyclical – the result of recession followed by a stuttering recovery. The rise in temporary work, for example, might be expected to recede when European economies are again growing strongly enough to bring unemployment down towards pre-recession levels. Other changes, however, are the result of major structural forces operating in the global economy: globalisation, demographic change, and the rapid pace of technological innovation. These forces are likely to continue to cause dislocation and disruption in European labour markets for the foreseeable future. As a result, there will be a fundamental shift in the types of jobs that are available for workers and in the skills demanded by employers across Europe.

At the end of 2014 there were over 24 million people unemployed in the EU28 countries – one in 10 of the workforce. This represents a tragic waste of human potential. Understanding the likely changes in the European labour market over the next decade is essential if policymakers and firms are to set Europe onto a path towards permanently lower unemployment through the creation of many more well-paid jobs.

IPPR and JPMorgan Chase Foundation have formed a partnership to bring together and mobilise the best policymakers, business leaders, academics and civil society organisations from across Europe to develop new solutions for the workforce challenges of the future. The New Skills at Work programme is analysing what can be done to overcome unemployment, ranging from macro strategies for boosting job-creation, expanding labour market participation and developing a skilled workforce for the future, through to specific innovations that improve the skills of the workforce to meet local employers’ needs. This report, which examines trends in employment and skills developments across the Europe, is the latest publication from this research programme.

Nick Pearce, director, IPPR