The future of employment in Europe | Christopher Pissarides | TEDxBrussels

Summary

The speaker argues that Europe is not doomed to a future of high unemployment and low growth, despite concerns about competition with China, aging populations, and debts. They highlight that innovation, particularly in labor-intensive services like healthcare and education, can drive job creation and growth. Emphasizing the need for policy reform, they suggest that the future of Europe lies in innovation and the services sector rather than traditional industrial expansion. They advocate for education reform, flexible labor markets, and incentives for private sector involvement in healthcare, all aimed at achieving full employment and improving quality of life.

Takeaways

• 😀 The claim that Europe is entering an era of high unemployment and low growth is based on outdated assumptions, and there are opportunities to achieve lower unemployment and higher innovation through careful policy structuring.
• 😀 The future of job creation lies in services, particularly in sectors like health, education, and community services, rather than traditional industries or financial services.
• 😀 While industries like manufacturing may employ fewer people due to higher productivity, innovation-driven sectors can create jobs in labor-intensive services.
• 😀 There is a clear trend in countries like Sweden, where health and education services have experienced consistent job growth, particularly for young people entering the workforce.
• 😀 Comparing different countries, such as Sweden and Italy, reveals the importance of liberalizing services and creating job opportunities in sectors like health and education.
• 😀 Successful innovators like Amazon create jobs, but they also destroy jobs in traditional sectors. However, they lead to increased wealth and spending in labor-intensive service sectors like childcare and healthcare.
• 😀 An aging population further drives demand for services like healthcare and personal care, contributing to job creation in those sectors.
• 😀 While trade and exports can bring additional job creation, innovation and technological advancements in Europe should focus on services and not just reindustrialization.
• 😀 Europe needs policies that support high wages in service sectors, promote flexible labor markets, and incentivize the training of workers for personal service jobs.
• 😀 In healthcare, there's a need for private sector participation and careful balancing with public services to maintain high standards of care, especially with the challenges posed by an aging population.
• 😀 Education systems need restructuring to emphasize interpersonal skills and customer service, as the new wave of jobs will require direct interaction with people rather than just technical knowledge.

Q & A

What is the primary concern addressed in the transcript?

The transcript addresses the concern about the future of Europe's economy, specifically regarding high unemployment, low growth, and the implications of competition with China, innovation activity, debt, and aging populations.

Why does the speaker believe that fears of high unemployment and low growth in Europe are misguided?

The speaker believes that if Europe structures its policies carefully, it is possible to have lower unemployment and more innovation, rather than falling into a 'new normal' of high unemployment. He argues that innovation and new sectors of job creation can drive future growth.

What sectors does the speaker suggest will be key in creating new jobs in the future?

The speaker suggests that sectors such as health care, education, and community services will be crucial for job creation, particularly as younger people transition from industrial and manufacturing jobs into services that involve person-to-person exchange.

How has employment in industrial sectors changed in the United States and Germany, according to the transcript?

In the United States, industrial employment has been steadily declining, while financial services experienced growth until around 2000, before also declining. In Germany, while industry remains significant, health and education sectors are growing, and there is evidence of increasing productivity in industrial sectors that requires fewer workers.

What is the 'employment miracle' in Sweden and other Scandinavian countries?

The 'employment miracle' refers to the high levels of job creation in Sweden and other Scandinavian countries, particularly in sectors like health care, child care, and elderly care, which are supported by the welfare state and subsidized services.

What role does innovation play in job creation, and how does it relate to the destruction of jobs in other sectors?

Innovation leads to job creation in successful companies, but it can also result in job losses in competing sectors. For example, Amazon's success has created jobs in e-commerce but also led to the closure of traditional bookstores. However, the overall economy benefits as these innovators increase demand for labor-intensive services like child care and health care.

What does the speaker suggest about the impact of an aging population on the demand for services?

The speaker argues that an aging population will drive greater demand for services, particularly health care, as older people tend to require more services and are more willing to purchase them, thus contributing to the growth of labor-intensive service sectors.

How does trade impact job creation in innovating sectors, according to the speaker?

Successful innovators, particularly those involved in trade and exports, can create additional jobs. However, the overall impact of trade is not strong enough to fully offset the job-destroying effects of innovation in other sectors.

What specific policy recommendations does the speaker make to improve job creation in Europe?

The speaker recommends liberalizing Europe's service sectors, encouraging higher wages in personal services, offering flexible labor market policies, reducing payroll taxes for lower-wage jobs, and introducing subsidies for job training and apprenticeships to boost job creation and ensure more inclusive growth.

Why does the speaker emphasize the need for changes in education systems?

The speaker emphasizes that education systems need to be restructured to focus more on teaching skills for direct customer service, such as working with people, which is crucial for the types of jobs that will be created in the future, rather than focusing solely on academic subjects or technical skills.