Impact of structural changes on the labour market 1  Sectors that recover more rapidly from crisis are not the same where the number of jobs decreased substantially during the crisis  Process of economic transition increases risk of structural unemployment  Some sectors face the shortage of labour/skills already at the moment not only by the education and skills of labour, but also wages ! The matching of labour demand and supply is determined not only by the education and skills of labour, but also wages, thus the number of vacancies remains even under the high unemployment level

Age structure of employed in manufacturing, 2011, % Age structure of senior experts in engineering employed in manufacturing, 2011, % 2 Age structure of employed in manufacturing

3  In order to satisfy demand in 2020, supply should be increased:  Higher education  Engineering  Information and communication technologies  Health services, social welfare and pharmacy  Agriculture and Forestry  Secondary vocational education  Metal processing, machine building and allied sectors  Operators of industrial and machine equipment  Experts of separate services sectors – information processing, hotels, restaurants and tourism, transport/logistics etc. Conclusions

4  In order to decrease the risk of structural unemployment:  Re-qualification will be necessary:  With higher education:  ~ 10% (25 thsd) of persons in humanities and social sciences (employed both by public and private sector)  ~ 10% (3 thsd) of persons in trade and commercial services  ~ 5% (5 thsd) of persons in education institutions  With secondary vocational education:  ~ 5% (2 thsd) of persons in construction  ~ 5% (5 thsd) of persons in services sectors  With basic education or low education level  ~ 20% (30 thsd) of economically active population Conclusions

 employees trained through the Partnership programme primarely in tradable goods services industries (manufacturing and ICT associations)  Industry associations as a project managers and low administrative burden on companies  Productivity enhancing training (focus on technical skills, ICT and management of manufacturing)  Additional funding for projects that have achieved higher progress - targeted at youth and companies outside Riga Training of employees (organized in partnership with employers organizations)

Implementation model and expected results :  Industry associations as project managers  Demand driven training projects according to the long term needs/trends of industries  Low administrative burden for final beneficiaries  Special focus on youth and regions and companies investing in new products/technologies  Indicative financing for activity in NDP – 5.25m LVL;  trained employees (approx. 1.2% of the employed population). Benefits:  Decrease in turnover of employees  Increase in net-profit  Increased productivity  Increase of loyalty and satisfaction of employees;  Increased youth employment Training of employees and management (organized in partnership with employers organizations)