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Executive Summary

Oxford Research carried out the study “Lifelong Learning for the Future Labour Market” between December 2022 and January 2024 on behalf of the Nordic Committee of Senior Officials for Labour (EK-A) under the Nordic Council of Ministers. The purpose of the study is to increase knowledge of the competencies required in the labour market of the future and explore how the Nordic countries’ lifelong learning systems can contribute to facilitating these needs. Oxford Research investigated how digitalisation and the green transition affect the competency supply and the labour market in the Nordic region. Additionally, Oxford Research examined the structures for lifelong learning in Denmark, Finland, Iceland, Norway, Sweden, the Faroe Islands, Greenland and Åland to identify how these systems can be strengthened and adapted to meet the forthcoming changes in the labour market.
To answer the study’s research questions, we applied a combination of analytical methods and data. It includes both qualitative and quantitative starting points. For example, we conducted desk studies of available national-level reports and academic studies, interviews with national ministries and authorities, regional stakeholders, national subject matter experts, workers’ and employers’ organisations, competency organisations, and education coordinators. The study also uses quantitative data in each country focusing on labour market matching rates, unemployment statistics, forthcoming competencies requirements, and general participation in lifelong learning.

Multiple parallel transitions constitute a complex picture of what the labour market needs

The study’s result shows that the green transition is demand-driven. Societies need to reduce their environmental and climate impact to ensure long-term sustaina­bi­li­ty. The transition, that is the change of emission-intensive sectors, will vary due to the nature of the industry and the country-specific conditions. Additionally, the groups that make-up the most emission-intensive sectors varies in the Nordic countries. An important aspect of the green transition is the adaptation to climate change. It already affects affect key industries in the Nordic region, and the effects will continue to increase, especially for natural resource-heavy industries. Therefore, Greenland and the Faroe Islands are particularly vulnerable to climate change. Simultaneously, the Nordic countries have different conditions for facilitating the adaptation of vulnerable groups to the labour market changes. It is based on, among other things, the ability to identify the forthcoming demanded competencies.
Moreover, the study shows that digitalisation will lead to a transformation that affects all industries and thus the entire labour market, in contrast to the green transition which mainly affects specific industries. It means that digital skills are already a demanded key competence. The pace of digitalisation affects the requirements for digital skills in all professional roles and therefore requires continuous competency development. This continuous advance requires not only employers to offer competency development, but also individuals to be open to new knowledge. If knowledge development does not progress, individuals risk losing the ability to handle digital tools in their professional roles. This issue is recognised in all Nordic countries, all of which have national skills development strategies with a strong emphasis on digitalisation as a key competence. Denmark, Finland, Sweden and Norway also highlight the need for continuous skills development in digitalisation for the population.
The competency supply challenges faced by the Nordic region stem from new competency needs which are affected by digital transformation, green transition and technological development. Additionally, it is difficult to predict exactly how big the impact will be. There is an overall need for green, digital and cross-sectoral skills in all countries. However, skill requirements vary in content and complexity depending on the sector. This creates a complex and uncertain picture of what the labour market needs, which in turn requires both flexible and adaptable strategies for competency development, lifelong learning, and successful matches of competency demands. Successful matches ensure that the workforce is properly equipped to meet the changing needs of a rapidly evolving labour market. By linking education and skills to the actual needs of companies and organisations, society can achieve a more efficient and adaptable workforce.

Lifelong learning is a priority in all Nordic countries

Lifelong learning is a highly relevant subject on the political agenda in the Nordic region. In the Nordic countries, lifelong learning is seen as an important tool for managing changes in the labour market because of transition processes. It is prioritised through incitive creation policies and strategic objectives. Vocational schools and adult education constitute a particularly important link between education and the labour market.
Although lifelong learning is prioritised through policies, actions and funding opportunities, many lifelong learning initiatives are not necessarily targeted at the groups most in need, that is individuals working in occupations or sectors facing the greatest changes. We see this trend in all Nordic countries. However, a notable exception is the opportunities available for the unemployed where all Nordic countries offer training opportunities and initiatives to support the unemployed through both formal and non-formal training. The common features of these initiatives are that the training is free of charge, includes interaction with the labour market, and the possibility to study does not affect unemployment benefits. Training for the unemployed is mainly organised within the remit of employment services and typically focuses on occupations where there is a particular shortage of labour or specific competency.
An increasingly central tool for promoting competency development and lifelong learning is validation. All countries use validation as a tool to assess and recognise individuals’ competencies in both education and work settings, although its use is limited in some autonomous regions. The purpose of validation is equivalent in all countries. It aims to enable individuals to gain credit for their knowledge and enter the labour market more quickly. The recognition of informally acquired skills and the cooperation between education coordinators and employers are key aspects of the validation systems.
Compared to the EU average the Nordic countries show high levels of participation in lifelong learning, formal- and non-formal adult education. In 2022, more than a quarter of Nordic adults aged 25–64 participated in some form of learning activity. However, there are differences in participation between the Nordic countries. For example, employees in Sweden and Finland, and the unemployed in Sweden, participate in learning activities to a higher degree compared to their Nordic neighbours.

Employers are key players in promoting lifelong learning

Employers play an important role in supporting and promoting lifelong learning, but there is variation in how this responsibility is regulated and practised across the Nordic countries. Lifelong learning seems to be a higher priority among employers in the white-collar sector compared to sectors characterised by physical labour and practical skills. The role of employers is primarily regulated by collective agreements, but there are also statutory rights to varying degrees in the Nordic countries. For example, Denmark has a flexible structure more focused on voluntary initiatives and support measures and Iceland’s system strongly involves social partners and strong support for education. In contrast, Finland and Norway have specific requirements for employers through legislation or collective agreements.
In the Nordic countries, employers also play a central role through their collaborations, both with education coordinators and among themselves. These partnerships are crucial for planning and implementing relevant education and meeting the needs of both the workforce and employers. For example, in Finland and Sweden, company representatives are involved in the development of validation requirements and assessment criteria to ensure relevance and labour market needs. 

Cross-border cooperation can help, but not solve future competency challenges 

The Nordic countries largely share the same challenges in terms of competency shortages. It makes moving specific competencies, such as health care employees, across borders complicated because it means moving the competency shortage. However, there are, albeit limited, examples of cross-border cooperation on training initiatives as part of lifelong learning, particularly in niche occupations. According to study respondents, such initiatives can strengthen the Nordic labour market by increasing the size of the available labour market for individuals in niche occupations and giving employers access to a larger pool of candidates. 
Regarding cross-border work in border regions, our findings confirm the conclusions of previous studies: cross-border labour market cooperation has been an important component of labour supply for a long time. Simultaneously, there are still structural barriers that limit the development of strong cross-border labour markets and education policies in border regions. This includes infrastructure deficiencies and other challenges that can impede the opportunities for cross-border commuting.

The Nordic countries have come a long way in lifelong learning, but an uncertain future and intense transition require continued prioritisation.

In conclusion, the study shows that lifelong learning is essential to address future labour market challenges, stemming from digitalisation, the green transition and technological development. The Nordic countries have made progress in promoting lifelong learning, yet several challenges remain. Lifelong learning is highly prioritised, with systems and policies supporting education throughout life. However, participation in lifelong learning is unevenly distributed, for example, people in sparsely populated areas may find it more difficult to participate. Systems need to become more flexible and inclusive to enable participation for all. It is especially important to address the rapidly changing needs of the labour market and to ensure that education is relevant and accessible to as many people as possible.
While there is a high level of awareness that transitions are necessary and inevitable, there is great uncertainty about what they will mean. Many jobs that will exist in the future do not yet exist, and technological developments make it difficult to predict which skills and occupations will become obsolete. Despite labour market forecasts and analyses of needs, there are several choices to be made on an ongoing basis that will determine future competency needs. It is therefore difficult to conclude whether any country is performing particularly well in meeting these needs. However, we can conclude that to best prepare for the future the Nordic region is required to adapt flexibility in all parts of the system.
Workers have consistently needed to evolve their abilities and expertise to remain relevant in the job market. However, this study shows that these transformations are occurring at a quicker and more profound pace than previously experienced. Technological advancements, including artificial intelligence (AI), hold the capability to significantly alter the nature of work in unpredictable ways, though several Nordic nations are developing strategies to deal with this trend.
Innovations and policy priorities in green technologies require new competencies. Employers and workers need to continuously update their processes and competencies. Therefore, an integrated lifelong learning system where actors work together to create a broad understanding of what constitutes the needs is a prerequisite for meeting the challenges facing the Nordic countries. Lifelong learning must also be more inclusive and more focused on the groups with the greatest needs. Our study shows that the Nordic countries have not yet achieved this.
Cross-border cooperation offers solutions to the skills challenges faced by the Nordic countries. We conclude that although increased cross-border cooperation is not a universal solution to the competency development needed in the Nordic region, cross-border Nordic cooperation can strengthen the countries’ labour markets. Cross-border cooperation can be achieved, for example, through joint educational initiatives and shared forecasting tools. We believe that the development of a Nordic digital platform that brings together educational offerings could be an interesting opportunity to facilitate joint educational initiatives. Such a platform would not only ease access to education across national borders but also promote greater integration of the Nordic labour markets, which in turn can help the region to effectively address and solve competency challenges.
Suggestions on how lifelong learning can help meet future labour market needs
  • Strengthen co-operation between educational institutions, business, and governments to create a more coherent lifelong learning system.
  • Increase the flexibility of education and training provision. Encourage and facilitate the development of flexible learning formats that can be adapted to individual needs and changes in the labour market.
  • Strengthen employer engagement. Create incentives and support structures for employers to invest in their employees' skills development, including SMEs.
  • Expand and improve validation systems. Develop and implement effective systems for validation of prior learning that are recognised across the Nordic region, to facilitate mobility and skills development.
  • Strengthen Nordic co-operation and exchange of experience. Promote increased Nordic co-operation and exchange of experience on best practices to strengthen and develop lifelong learning systems.