It’s time for more drastic measures to fight the labor shortages in industry, argues Anton Duisterwinkel.
The Action Agenda for the Technological Industry in South Holland recently announced that it aims to double the total turnover of that industry in ten years while creating 30,000 additional jobs. This statement evoked very different reactions. A respected senior entrepreneur asked: “How do you expect to realize such a doubling with only 30,000 extra staff when 110,000 create the current turnover?” An equally respected editor of a competing magazine scorned the statement, saying we should stop creating jobs, as there isn’t enough skilled labor as it is. Start digitalizing, was his advice. The truth, as often, lies in between those extremes.
First: creating jobs isn’t the objective but the logical consequence of substantial growth. More turnover can be realized with more workers. However, given the shortage of labor, this approach will limit or even stop growth. Therefore, the Action Agenda aims at developing smart production technologies such as robotics and additive manufacturing. Furthermore, it pushes both the development and application of digitalization. This combined effort is expected to lead to higher workforce productivity, also known as labor productivity – the turnover created by one hour of working. The higher the workforce productivity, the more turnover we can create.
The million-dollar question is: how much can we push workforce productivity with robotization, automation and digitalization? Can we double turnover without additional jobs? The answer is no. Worker productivity in South Holland is higher and increases faster than anywhere else in the Netherlands. Forward extrapolation of that increase shows that, in a realistic scenario, tens of thousands of additional workers are needed. Indeed, in the order of 30,000 new jobs.
This is a significant challenge in itself. But, in fact, it’s twice as large, as another 30,000 workers are expected to leave the technological industry in the same period. In other words, even when we would be able to somehow push worker productivity to a level where no additional workers are needed, a significant workforce challenge remains.
Therefore, the Action Agenda for the Technological Industry also aims at finding and binding young talent to the industry, as well as implementing lifelong development of the current workforce. Both are essential. Current activities to find and bind talent aren’t very effective. The Action Agenda hopes to increase the effectiveness of existing and additional activities on talent scouting and binding by creating continuous attention for technology from 8 to 18 years old, focusing not only on the child but also on its main influencers. Lifelong development is equally important. If we push digitalization without interesting and training current workers to use that digitalization, they’ll leave their jobs and we’re worse off.
Will this be enough to fill the current vacancies, the additional vacancies due to retirement, promotion to management or life choices, let alone additional vacancies due to growth? That’s questionable, given that many sectors in the Netherlands have large labor shortages.
One of the more radical ideas mentioned in the Action Agenda is to pay schools for each vacancy their graduates fill, not for each diploma they issue. This approach creates a healthy and logical urgency in schools to aim for curriculums that fit local employment opportunities. This system is implemented in North Rhine-Westphalia, Germany, where it’s called “Keine Abschluss ohne Anschluss.” Kids and their parents are actively supported in finding education paths that both suit the kids’ interests and ensure a high probability of finding a job. This is said to lead to zero unemployment among young people.
Stimulating the growth of the technological industry in the Netherlands is essential – it’s one of the few Dutch sectors showing significant export growth. Finding skilled staff is one of the main factors limiting growth. Digitalization alone isn’t the answer and may cause even more vacancies if not supported by solid and extensive educational activities. In addition, more young people must be enticed to work in the industry. The size of that challenge calls for drastic measures. Can we find sufficient leadership in industry, education and government to implement more radical measures? That, in fact, is a billion-dollar question.