A Two-Step Approach for Regional Medium-Term Skill Needs Forecasting

High dynamism of modern economic systems, due to free movement of capital, international competition, new information technologies, transition from an industrial economy to one based on services (Castells, 2002), has extremely transformed labour markets. During a conference taken on February 28th, 1998 which was entitled “New labour scenarios: which role for the person?”, Marco Martini identified in advance a crucial problem of modern labour markets, i.e the research of an equilibrium between two different tendencies: the need of secure employment and the high number of transitions. In the past, secure employment depended on organization stability, and, moreover, the worker usually developed his/her career within the same organization or, at least, within the same economic sector. Nowadays, a “linear career path” has been substituted by a “multidirectional career path” (Baruch, 2003), which consists of a high number of transitions along different organizations and economic sectors, different types of contracts, and also different duties. “In the past, people expected to serve their organization for their entire working life. Even if this was not the actual case, this was the desirable development. Now people expect the organization to serve them, and the time span for the relationship to last could be easily reduced to very few years” (Baruch, 2003). A recent research (Mezzanzanica and Lovaglio, 2008), carried out on data extracted from the labour market (LM) data-warehouse for the Province of Milan, confirms the tendency of an increasing job mobility; moreover, the research reveals that education, training and lifelong learning are the main variables which positively influence the improvement of the career. This suggests the introduction of new labour market policies oriented to the development of the human capital, such as training and retraining activities, vocational guidance and job placement. “From the organizational point of view it is mostly moving from offering careers of secure employment for all, to opportunities for development” (Baruch, 2003). Within the dynamic nature of modern labour markets, regional policy makers require instruments which, given the data at disposal, enable to get a deeper knowledge of the different scenarios and measure their evolution. Various attempts have been made in order to construct skill needs forecasting systems at both European (Cedefop, 2008), national (Neugart and Schömann, 2002) and regional level (Crass et al., 2007). Many are also the statistical methodologies proposed for national employment forecasting (Pfann, 2001; Shoesmith, 2005; Wong et al., 2005; Rapach and Strauss, 2008) and regional employment forecasting (Sarantis and Swales, 1999; Blien and Tassinopoulos, 2001; Mayor et al., 2007). At the moment, we are working to the construction of a permanent labour market observatory-system in Lombardy Region consisting of: 1) a regional information system based on the integration of different data sources, like the LM data-warehouse; 2) a two-step methodological approach based on the combination of Martini-Pasinetti’s model (which enables to interpret and anticipate the dynamics of regional employment at sector level) and time-series forecasting models (in order to forecast regional skill needs at sector level). The paper is organized as follows. Section 2 illustrates the two-step methodological approach proposed. Section 3 describes the data involved in a recent study regarding the Milan area (corresponding to around the 50% of the labour market in Lombardy region) and an example of the main results on two sectors of interest. Section 4 gives some conclusions and future developments.