Nl Forecasting Report Empirica v3[1]

8/8/2019 Nl Forecasting Report Empirica v3[1]

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Prepared for the

NL Taskforce on e-Skills

by

empirica Gesellschaft fr Kommunikations- und Technologieforschung mbH

Analyst: Tobias Hsing

Oxfordstr. 2, D-53111 Bonn, Germany

Tel.: +49 (0)228 98 539 0, Fax: +49-(0) 228 98530 12

http://www.empirica.com


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1 ICT jobs in the Netherlands

In 2008, Eurostat reports some 265,000 core ICT practitioner jobs in the Netherlands, if

one counts those workers classified as "computing professionals" and "associate

computing professionals" (see table below). Unlike most other countries in Europe, the

Netherlands have not seen such a strong increase in the number of ICT jobs in the past

decade, owing perhaps to the already very high share of ICT workers in the workforce

compared to its neighbours. For three years between 2000 and 2008 the Netherlandseven saw a decrease in the number of ICT practitioners (core definition).

Table: Number and growth of ICT occupations in the Netherlands and the EU27from 2000 -2008

2000 2001 2002 2003 2004 2005 2006 2007 2008

CORE Definition1

NL 249,000 256,300 251,400 264,400 254,600 263,400 236,100 253,600 264,900

3% -2% 5% -4% 3% -10% 7% 4%

EU27 2,726,700 3,173,300 3,175,400 3,203,300 3,251,400 3,520,400 3,686,000 3,793,100 3,999,100

16% 0% 1% 2% 8% 5% 3% 5%

BROAD Definition

NL 280,200 285,500 281,500 296,400 295,600 304,800 275,500 297,900 304,800

2% -1% 5% 0% 3% -10% 8% 2%

EU27 3,164,700 3,856,600 3,915,000 3,925,200 4,068,700 4,376,400 4,616,100 4,736,300 4,933,100

22% 2% 0% 4% 8% 5% 3% 4%

VERY BROAD Definition

NL 338,900 349,400 339,000 356,900 346,700 350,200 321,500 336,900 344,200

3% -3% 5% -3% 1% -8% 5% 2%

EU27 5,851,900 6,470,100 6,452,900 6,349,400 6,443,500 6,662,900 6,966,600 6,928,800 7,222,900

11% 0% -2% 1% 3% 5% -1% 4%

Source: Eurostat LFS Data

For the baseline year 2007, an excess demand of 3.9% was estimated.


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Figure: ICT Practitioner Jobs Trends in the Netherlands and Europe 2000 2008(2000=100)

80

100

120

140

160

180

200

220

2000 2001 2002 2003 2004 2005 2006 2007 2008

NL

UK

FR

DE

IT

PL

ES

EU27

Source: Empirica calculations based on Eurostat LFS Data


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2 Scenarios

The main scenarios developed are:

Back to normal- a return to the historical development trajectory experienced before

the crisis, in terms of growth rates and IT innovation;

Investing in the future a return to moderate growth, accompanied by an acceleration

of ICT investments and innovation which will yield their main benefits after 2015, but

provide hope for the future;

Turbo knowledge economy the knowledge economy takes off in Europe, thanks to a

virtuous circle of productivity and economic growth driven by widespread diffusion of

ICT-based innovation. ICT careers become more attractive and demand of e-skills

grows;

Tradition wins after the crisis, an export-driven recovery advantages traditional

industries, rather than high-tech and innovative industries, resulting in a combination

of moderate economic growth with low ICT growth. The relocation of the ICT industry

outside of Europe accelerates, with a possible slight decrease of the demand of e-skills;

Stagnation - a very slow recovery, accompanied by domestic protectionism in the most

important countries, discourages innovation investments. The European socioeconomic

system struggles to keep up with the emerging economies and tends to close itself

("fortress Europe"). Low ICT investments and IT off-shoring growth lead to a reduction

of the demand of e-skills and potential over-supply problems.

These global e-skills demand-supply scenarios have been designed combining sub-

scenarios with regard to

1) ICT Innovation: alternative visions of the main trends of ICT innovation, their

diffusion in the EU, the evolution of ICT delivery and business models, and the changes

of the interactions between ICT producer and user industries in the examined period.

These sub-scenarios describe the main drivers of the demand of e-skills by focusing on

the possible development paths of the ICT industry and (even more important) of theICT market. Since we are entering a new wave of IT-based innovation, these sub-

scenarios are characterized by a high level of uncertainty and a high influence on the

final global scenarios.

A variable input factor for the Netherlands chosen is the IT spending development

which was assumed as follows:


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dynamics are taken as largely exogenous to the e-skills scenarios, so that we mainly

focus on their impact on the development of the IT industry and market, particularly on

the demand of e-skills, since the correlation with supply of e-skills is more indirect anddifficult to quantify.

Input factors for the Netherlands have been chosen according to the following table:

Table: Forecast of GDP growth according to scenario

Source: Estimate

3) IT Outsourcing and off-shoring: alternative assumptions about the trend towards

sourcing IT skills and activities outside of Europe, and its implications for the IT

employment in Europe in the next years, which may (or may not) tend to reduce e-skills demand in the near and long-term future. There are heated discussions about the

impact of IT off-shoring on IT employment, and very little evidence so far, also because

the volume of off-shoring spending has been marginal until recently (though it seems

that the economic crisis is accelerating it). Because of its high level of uncertainty and

high potential impact on the e-skills market, this trend has been highlighted and

singled out, even if it is not really an independent sub-scenario, rather a component of

the overall ICT innovation sub-scenarios, closely following their dynamics.

Input factors for the Netherlands had to be estimated. As the Netherlands are not

native English speaking, which allows easy outsourcing for instance to India as is the

case for the UK - but can be expected to be more prone to offshoring than the more

culturally closed similarly developed countries for which data is available (France,

Germany), the offshoring is assumed to be 125% of the effect seen in France and

Germany combined, adjusted for the number of ICT jobs in the Netherlands.

4) Education and training: these sub-scenarios explore the possible trajectories of e-

skills supply in the examined period, focusing on the formal education system and thetraining system. The rate of change of the formal education system is slow and usually

takes more than the 3-5 years of our scenarios horizon, so the sub-scenarios are based

on an expected high level of continuity with present trends. On the other hand, the

training system is much more flexible and shaped by enterprises and workers choices,

as well as by the general economic climate, so its future developments present a higher

2007 2008 2009 2010 2011 2012 2013 2014 2015

Medium growth scenario 3.60 2.00 -4.00 1.50 2.00 1.75 1.75 1.75 1.75High growth scenario 3.60 2.00 -4.00 1.50 2.00 2.50 2.50 2.50 2.50

Low growth scenario 3.60 2.00 -4.00 1.50 2.00 1.00 1.00 1.00 1.00


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The likeliness of the various scenarios may vary: they should be considered as possible

futures, which test the range of impacts on the demand-supply of e-skills of the main

economic, industry and social factors affecting the e-skills market. Certainly the

"extreme" scenarios (Turbo knowledge economy and Stagnation) appear less likely

than the other moderate scenarios, but some of their components are more than likely.

Conversely, the "intermediate" scenarios appear more likely, but show clearly that the

evolution of present trends may still lead to alternative development models, with

different possible impacts on the socio-economic environment. There is not a destiny of

innovation for Europe: but a future which must be built, starting now.

The features of the scenarios can be summarised as follows:

Figure: Overview of Global Demand-Supply of e-skills scenarios

Back to NormalModerateEconomic

Growth

ModerateInnovation

Growth

Moderate, long-term impact of

ICT policies

MediumOffshoring

Growth

Moderateattractivenessof ICT careers

Investing in

the future

Moderate

EconomicGrowth

Medium

OffshoringGrowth

Moderate

attractivenessof ICT careers

TurboKnowledgeEconomy

HighEconomic

Growth

MediumOffshoring

Growth

Highattractivenessof ICT careers

TraditionWins

ModerateEconomic

Growth

FastOffshoring

Growth

Lowattractivenessof ICT careers

Stagnation

Low

EconomicGrowth

Low

InnovationGrowth

Low impact of

e-skills andICT policies

Fast

OffshoringGrowth

Low

attractivenessof ICT careers

LowInnovation

Growth

HighInnovation

Growth

High

InnovationGrowth

Moderate, long-term impact of

ICT policies

Strong impact of

eskills and ICTstimulus policies

Strong impact ofeskills and ICT

stimulus policies

Source: empirica: e-Skills Monitor Final Report 2009


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3 Scenarios Results

3.1 Scenario: Back to normal

Starting from an excess demand of 11,600 (broad definition) in the Netherlands in 2007

and 15,300 in 2008, the crisis slump in the demand has led to a less huge, yet still

existing excess demand of 4,900 in 2009. The slowly returning growth in this scenariotogether with a permanently insufficient low number of graduates results in a steadily

growing excess demand from 2009 on, reaching almost 40,000 in 2015. In all scenarios

the supply never exceeds demand and unemployment of ICT practitioners remains at its

assumed natural level of 2.6%.


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Netherlands Back to normal scenario BROADdefinition of ICT practitioners

European Union (EU27) Back to normal scenarioBROAD definition of ICT practitioners

Demand-Supply Match

4,600,000

4,700,000

4,800,000

4,900,000

5,000,000

5,100,000

5,200,000

5,300,000

5,400,000

5,500,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Excess demand

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand

Excess demand

-50,000

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand

Source: empirica 2010

3.2 Scenario: Investing in the future

With an identical development in the baseline year 2007 and in 2008, demand for ICT

practitioners exceeds the supply by an absolute number of around 4,800 in the

Netherlands in 2009. The supply figures will remain stable over the years of the

forecasting period while the demand figures after the 2009 slump will soon increase

Demand-Supply Match

270,000

280,000

290,000

300,000

310,000

320,000

330,000

340,000

350,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY


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Netherlands Investing in the Future scenarioBROAD definition of ICT practitioners

European Union (EU27) Investing in the Futurescenario BROAD definition of ICT practitioners

Demand-Supply Match

270,000

280,000

290,000

300,000

310,000

320,000

330,000

340,000

350,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Demand-Supply Match

4,600,000

4,700,000

4,800,000

4,900,000

5,000,000

5,100,000

5,200,000

5,300,000

5,400,000

5,500,000

5,600,000

5,700,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Excess demand

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand

Excess demand

-100,000

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand


3.3 Scenario: Turbo knowledge economyIn the Turbo knowledge economy scenario the Netherlands will experience the most

severe excess demand of ICT practitioners. In the period 2008-2010 excess demand is

estimated to fall from 15,200 to 4,700 and rise again to 7,400 in 2010. There will be a

positive supply side development leading to 13,400 additional inflows to the labour

k t d t th B k t N l i b t th i i l ill t


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Netherlands Turbo knowledge economy scenarioBROAD definition of ICT practitioners

European Union (EU27) Turbo knowledgeeconomy scenario BROAD definition of ICT

practitioners

Demand-Supply Match

270,000

280,000

290,000

300,000

310,000

320,000

330,000

340,000

350,000

360,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Demand-Supply Match

4,600,000

4,700,0004,800,000

4,900,000

5,000,000

5,100,0005,200,0005,300,000

5,400,000

5,500,000

5,600,0005,700,000

5,800,000

5,900,000

6,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Excess demand

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand

Excess demand

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand


3.4 Scenario: Tradition wins

In the Tradition wins scenario a substantial balance of supply and demand of ICT

practitioners can be expected at European level but in the Netherlands, the negative

supply side effect and rather robust demand entail a still significant excess demand of

29 600 20 h l h ll b d l f k ll d d f


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Netherlands Tradition Wins scenario BROADdefinition of ICT practitioners

European Union (EU27) Tradition Wins scenarioBROAD definition of ICT practitioners

Demand-Supply Match

275,000

280,000

285,000

290,000295,000

300,000

305,000

310,000

315,000

320,000

325,000

330,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Demand-Supply Match

4,600,000

4,700,000

4,800,000

4,900,000

5,000,000

5,100,000

5,200,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Excess demand

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand

Excess demand

-50,000

-

50,000

100,000

150,000

200,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand


3.5 Scenario: StagnationIn the Stagnation scenario and at European level supply and demand are going to

match in the years to come.

In the Netherlands, the Stagnation scenario turns out to be hardly different from the

Tradition wins scenario, with a supply of Computer Science graduates decreasing and


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Netherlands Stagnation scenario BROADdefinition of ICT practitioners

European Union (EU27) Stagnation scenarioBROAD definition of ICT practitioners

Demand-Supply Match

280,000

285,000

290,000

295,000

300,000

305,000

310,000

315,000

320,000

325,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Demand-Supply Match

4,600,000

4,700,000

4,800,000

4,900,000

5,000,000

5,100,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

DEMAND SUPPLY

Excess demand

-

5,000

10,000

15,000

20,000

25,000

30,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand

Excess demand

-50,000

-

50,000

100,000

150,000

200,000

250,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Excess demand



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4 Conclusions

Just as the study found out for Europe as a whole, also in the Netherlands the

divergence in the scenarios becomes evident in 2015, however, compared to other

countries, the Netherlands does not show as much variability between the five

scenarios.

The scenario "Back to normal" in 2015 features almost 40,000 e-skills excess

demand, which the supply system cannot satisfy. This is driven by thecontinuation of "before the crisis" patterns, with IT-based innovation playing an

important factor in the development model of the economy, both high intensity

user industries and low-intensity user industries increasing their demand in the

same proportion as they used to. The result of these trends is that the

imbalances of the e-skills market, denounced today by many sources, reappear

and become more relevant. While not analysed in particular for the

Netherlands, it may be reasonable to assume that in qualitative terms the same

conclusions reached for the EU27 also apply, namely that the main e-skills gapsconcern high level technical skills (for the design and development of advanced

services) and managerial/customer oriented skills, while the demand for

traditional programming skills tends to decline.

"Investing in the Future" develops quite similar (resulting from the Dutch input

parameters assumed) to the previous scenario, with only a slightly faster

growth path driven by ICT-based innovation and future-oriented investments.

This leads to a somewhat higher demand which can however also not be met by

domestic production of e-skills. In this scenario the e-skills gap grows even

higher to 43,000 in 2015. The mix of demand starts shifting towards

management ICT skills, while the gap of R&D skills tends to increase at the end

of the forecast period, when ICT research investments start to accelerate.

The "Turbo knowledge economy" scenario envisages a strong acceleration of the

knowledge economy in Europe, with a jump ahead of ICT-driven innovation,

also helped by effective and proactive ICT policies and the impact of the

stimulus package. The turning point in this scenario is the massive adoption ofICT innovation by SMEs, particularly high-tech SMEs and medium-size

enterprises (the fast growing "gazelles" described by economic literature as one

of the key potential success factors of the European economy). New digital

infrastructures (smart grids, e-health smart networks, intelligent transportation

systems and networks) leverage innovation to generate productivity increases


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mere 29,600 excess demand in 2015 on a level of ICT employment lower than in

2010.

Finally, the "Stagnation" scenario is again for the Dutch case very similar toanother scenario with respect to the resulting figures, namely "Tradition wins".

The scenario is based on very low level growth. This is essentially a scenario of

missed benefits and missed opportunities. Unlike in Europe as a whole, where

by 2015, there is still some excess demand representing only 2% of the

workforce, in the Netherlands about 9% excess demand have yet resurfaced by

2015. It has to be said that this is also an effect of the relatively robust

economy assumed even in the low growth scenarios (see Table: Forecast of GDP

growth according to scenarios), while a more doomy scenario had been thebasis of the EU scenario.

The tables below provide an overview of the e-skills demand and supply situation in

2010 and 2015 in the EU and the Netherlands and compare these according to the

different scenarios developed.

This comparative analysis shows that the three of the five scenarios characterized by

higher economic growth, based on the strengthening of the knowledge economy, all

show the potential risk of relevant e-skills gaps, while - also as an effect of the specificDutch scenarios e-skills gaps are prevalent even in the worse scenarios in the

Netherlands.

Table: e-Skills demand and supply in 2010 and 2015 (broad definition of e-Skills) Netherlands

2010 2015

Netherlands

Demand ofe-skills

Supply ofe-skills

Demand/Supply

Difference

Demand ofe-skills

Supply ofe-skills

Demand/Supply

Difference

Back to normal 307,100 299,300 7,800 338,100 299,200 39,000

Investing in thefuture

306,900 299,300 7,600 342,300 299,200 43,200

Turbo knowledgeeconomy 306,700 299,300 7,400 348,400 309,000 39,400

Tradition wins 305,400 299,300 6,100 324,200 294,500 29,600

Stagnation 306,300 299,300 7,000 321,700 294,500 27,200


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Table: e-Skills demand and supply in 2010 and 2015 (broad definition of e-Skills) EU27

Source: e-Skills Monitor 2009

2010 2015

EU27

Demand ofe-skills

Supply ofe-skills

Demand/Supply

Difference

Demand ofe-skills

Supply ofe-skills

Demand/Supply

Difference

Back to normal 4,852,700 4,876,200 -23,500 5,445,700 5,061,600 384,100

Investing in thefuture

4,870,800 4,876,200 -5,400 5,646,700 5,067,200 579,500

Turbo knowledgeeconomy

4,899,900 4,876,200 23,700 5,927,700 5,258,500 669,100

Tradition wins 4,873,200 4,876,200 -3,000 5,102,300 4,973,500 128,900

Stagnation 4,839,500 4,876,200 -36,800 5,038,700 4,952,200 86,500


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5 Annex Demand Supply Match tables by scenario for the Netherlands

Broad definition of ICT practitioners:

BACK TO NORMALdefinition: BROAD ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015

Aggregate Demand 309,500 313,900 304,000 307,100 311,400 316,500 322,000 329,200 338,100

Workforce 297,900 298,600 299,100 299,300 299,400 299,500 299,500 299,400 299,200

Graduate entries 6,640 6,460 6,190 6,100 6,100 5,970 5,850 5,780 5,720Retirement exits 5,960 5,970 5,980 5,990 5,990 5,990 5,990 5,990 5,980

Excess demand 11,620 15,300 4,920 7,820 12,010 16,960 22,470 29,890 38,960

INVESTING IN THE FUTUREdefinition: BROAD ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015


Workforce 297,900 298,600 299,100 299,300 299,400 299,500 299,500 299,400 299,200

Graduate entries 6,640 6,460 6,190 6,100 6,100 5,970 5,850 5,780 5,720Retirement exits 5,960 5,970 5,980 5,990 5,990 5,990 5,990 5,990 5,980

Excess demand 11,620 15,260 4,830 7,630 11,670 17,070 23,170 31,980 43,160

TURBO KNOWLEDGEdefinition: BROAD ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015


Workforce 297,900 298,600 299,100 299,300 300,100 301,700 304,000 306,400 309,000

Graduate entries6,640 6,460 6,190 6,100 6,170 6,220 6,380 6,620 6,880

Retirement exits 5,960 5,970 5,980 5,990 6,000 6,030 6,080 6,130 6,180

Excess demand 11,620 15,210 4,710 7,380 10,540 15,200 19,910 28,100 39,360


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STAGNATIONdefinition: BROAD ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015


Workforce 297,900 298,600 299,100 299,300 298,700 298,100 297,200 296,000 294,500

Graduate entries 6,640 6,460 6,190 6,100 6,060 5,810 5,460 5,120 4,800


Excess demand 11,620 15,310 4,940 7,020 11,070 14,250 18,140 22,290 27,170

TRADITION WINSdefinition: BROAD ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015


Workforce 297,900 298,600 299,100 299,300 298,700 298,100 297,200 296,000 294,500Graduate entries 6,640 6,460 6,190 6,100 6,060 5,810 5,450 5,110 4,790


Excess demand 11,620 15,250 4,800 6,080 9,270 13,210 18,180 23,380 29,650

Core definition of ICT practitioners:

BACK TO NORMALdefinition: CORE ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015


Workforce 253,600 254,400 255,000 255,400 255,600 255,900 256,100 256,100 256,100



Excess demand 9,890 12,780 3,710 5,970 9,360 13,390 17,900 24,050 31,600

INVESTING IN THEFUTUREdefinition: CORE ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015


Workforce 253,600 254,400 255,000 255,400 255,600 255,900 256,100 256,100 256,100



Excess demand 9,890 12,750 3,630 5,800 9,070 13,480 18,500 25,830 35,180


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TURBO KNOWLEDGEdefinition: CORE ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015


Workforce 253,600 254,400 255,000 255,400 256,200 257,800 259,900 262,100 264,500



Excess demand 9,890 12,700 3,530 5,590 8,110 11,900 15,730 22,530 31,940

STAGNATIONdefinition: CORE ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015

Aggregate Demand 263,500 267,200 258,800 260,700 263,600 265,800 268,300 270,800 273,700Workforce 253,600 254,400 255,000 255,400 255,000 254,700 254,100 253,300 252,100



Excess demand 9,890 12,790 3,730 5,290 8,560 11,080 14,200 17,560 21,540

TRADITION WINSdefinition: CORE ISCO

2007 2008 2009 2010 2011 2012 2013 2014 2015

Aggregate Demand 263,500 267,100 258,600 259,900 262,100 264,900 268,400 271,800 275,800Workforce 253,600 254,400 255,000 255,400 255,000 254,700 254,100 253,300 252,100



Excess demand 9,890 12,740 3,610 4,490 7,030 10,200 14,230 18,490 23,660

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Nl Forecasting Report Empirica v3[1]