Report No 14 to the Storting (2019–2020)

The Skills Reform – Lifelong Learning

Preface – The Skills Reform and the coronavirus pandemic

The objectives of the Government's Skills Reform are that no one’s skills become obsolete, and that the labour market has access to the skills it needs. The coronavirus pandemic has had swift and severe ramifications for Norwegian society. It has led to an economic crisis that affects many areas of business and industry. We are now in a serious situation where unemployment has rapidly increased to a high level. These are difficult times for many, particularly those who have been laid off or lost their job, business owners who are scared of losing their life's work, and young people and graduates on their way into the labour market.

Many are concerned about their future.

The measures presented in this white paper were devised before the outbreak of the coronavirus in a situation with a very different financial outlook for the Norwegian labour market. This does not mean that the measures presented are not relevant to our current situation. On the contrary, the schemes we present in the white paper will probably be essential to help us through the economic crisis. It is now of fundamental importance that we maintain and develop the population's skills in this acute situation, but the background for this policy is that we know Norway will have to undergo a major transition going forward. The sustainability of our welfare society depends on as many people as possible being in employment. It makes economic sense to use this crisis to better equip people for the labour market after the coronavirus pandemic has ended, but the measures presented here will also contribute to Norway’s long-term transition.

A flexible system is needed that can quickly respond to new skills needs. The Government has already established schemes aimed at supporting skills development that can now be scaled up to address the economic crisis.

At the beginning of April 2020, a skills package worth NOK 190 million was allocated to measures that enable people who have been laid off or become unemployed due to the coronavirus pandemic to take an education or renew their skills. The skills package comprises the following measures:

– NOK 100 million to six new tripartite industry programmes for skills development

– NOK 50 million to online training

– NOK 20 million to universities and university colleges to create places for more students on existing programmes

– NOK 20 million to training of unskilled workers through vocational training in the SkillsPlus scheme

The Norwegian parliament (the Storting) has also allocated NOK 250 million to the county authorities to give them greater leverage to take responsibility for regional skills policy in the context of the economic crisis.

These measures are important now, but are also examples of measures we will need in Norway’s long-term transition.

This white paper does not mark the end of the Skills Reform. The Government will further develop and adapt the measures in the Skills Reform to address the new challenges we face. The Government will also continue to cooperate with stakeholders in the labour market and education sector to develop good, relevant programmes that ensure that no one’s skills become obsolete in the Norwegian labour market.

 

Report No 14 to the Storting (2019–2020)

The Skills Reform – Lifelong Learning

Recommendation from the Ministry of Education and Research of 22 April 2020, approved by the Council of State on the same date.

(Solberg Government)

Summary

The Skills Reform has two objectives. The first is that no one’s skills become obsolete. Everyone should be given an opportunity to renew and supplement their skills to enable them to work longer. The other objective is to close the skills gap, i.e. the gap between what skills the labour market needs and what skills the workers actually have.

The Skills Reform builds on the Government’s skills policy from 2013 until the present, including the Norwegian Strategy for Skills Policy 2017–2021, which was signed by the Government, the main employer and employee organisations, the Sami Parliament and the Norwegian Association for Adult Learning in 2017. The Government will further develop the reform in the years to come in cooperation with the social partners. This white paper summarises the status of what the Government has done thus far and which reform measures have been initiated, and clearly shows the direction in which skills policy must be developed going forward.

In the period 2013–2018, the Government has given particular priority to adults with poor basic skills and persons who have not completed upper secondary education. A number of measures have been initiated to better adapt the education system to adults who need lower secondary education, vocational education and training, basic skills training or Norwegian language tuition. The Government will continue its efforts to give adults with little formal education or poor basic skills better access to flexible education.

It is not only people with little formal education who need to raise or expand their skills.

The rate of the labour market transition is increasing and people’s skills must be continuously renewed. The Government is also aware that people with craft certificates, higher vocational education or higher education need lifelong learning. The development of professions and disciplines is rapid, and tertiary vocational colleges, universities and university colleges are the most suitable providers of updated programmes targeting skilled workers and those with higher education.

Skills development is essential for value creation in the business sector and for quality in the public sector. The Government has implemented a major initiative to raise the skills of teachers and health personnel. With the Skills Reform, the Government wants to better facilitate lifelong learning for everyone in Norway.

Why do we need a skills reform?

Norway, like the rest of the world, has been thrown into an economic crisis as a result of the coronavirus pandemic. It is even more important in times of crisis to ensure that people’s skills do not become obsolete, and those who have been laid off or are unemployed can use this time to develop their skills. In principle, Norway is in a good position. Our population is relatively well educated, and both knowledgeable and skilled. We have a learning-intensive labour market and employers who invest a great deal in their employees’ skills development. This gives us an important advantage that we must maintain and further develop.

For a long time, Norway has been a country that has invested in a highly skilled workforce. We are a small country on the outskirts of Europe with a high cost level. We are dependent on having one of the most skilled populations in the world to maintain our living standard. It is therefore worrying that we appear to have a growing skills gap with an increasingly high share of enterprises reporting that they have uncovered skills needs.[1]

Skills needs are changing rapidly. This could increase the skills gap. We are in the early stages of what is called the fourth industrial revolution.

Technological development in the form of digitalisation, robotisation and automation has the potential to bring about strong growth in productivity and new business development opportunities. However, there is uncertainty about the consequences of this development when robots are able to carry out many of the tasks currently performed by humans. The rapid changes and new skills needs mean that the education system must take a different approach than is currently the case. Education programmes must be adaptable to people's individual life situations and rapidly shifting needs in society.

The green transition, where oil and gas will gradually be given a less dominant role in the economy, will require new skills. Norway has a good point of departure.

The country's success as an oil and gas nation stems from world-class skills and technology that has also helped to raise productivity in the rest of the economy, including by means of technology transfer. We will take this with us into the development of new, green industries. However, we must also ensure that the people affected by the green transition are able to adapt to new jobs. A green transition of the economy requires us to educate a sufficient workforce, and to ensure that enough people are able to update and develop their skills to fill the new jobs that arise when new green industries are developed.

Technology development and the green transition will mean that many jobs disappear, but also that many new jobs emerge. The new jobs may emerge quickly and will often require different skills than we currently possess. It is not sufficient to wait until young people complete their education. We need lifelong learning to keep up to speed with developments.

In general, Norway is well-positioned to address the increasing need for new skills. Our education system generally provides good access to education programmes, and Norwegian workers have a relatively high participation in skills development. The Government nonetheless believes that we need an even more proactive skills policy to address current and future challenges:

– Many enterprises report an uncovered skills need and there has been a strong rise in the proportion of businesses reporting a high degree of uncovered skills needs.

– Despite the growing need for skills, participation in further education and non-formal training has not increased in recent years. Unskilled workers and workers with a craft/journeyman’s certificate participate less than others in skills development.

– There is reason to believe that different types of market failure lead to overall lower investment in skills development than is optimal for society.[2]

– Skills needs vary according to business, industry and geography. It is more difficult in some parts of the country to recruit skilled labour. This applies in both the private and public sector.

– The proportion of elderly in the population will also increase in the years leading up to 2040, and this will have the strongest impact in the less central parts of the country.

– The education system is not sufficiently adapted to a labour market with increasing needs for maintenance and updating of skills.

– The Norwegian State Educational Loan Fund (Lånekassen) has not been, until recently, adapted to the needs of employees. It can be difficult, particularly for those who wish to make the transition from a current position, to finance an education that would lead to a new occupation.

– It is challenging for individuals and enterprises to navigate the skills training programme market. Nor are the actors that provide skills training sufficiently oriented about the labour market’s needs.

These challenges cannot be addressed by the state alone. Skills development in the labour market is primarily the responsibility of individuals and enterprises.

Employers are responsible for providing necessary training to their employees so they can safely and confidently perform their work. Each individual is also responsible for acquiring the knowledge and skills needed in the labour market. To succeed with the Skills Reform, the labour market must be on board. It is not possible to achieve the goal of lifelong learning if the labour market does not invest more in its employees’ skills, provide good opportunities for each individual's learning and facilitate on-the-job training. Norwegian employers and employees already invest a great deal in skills development and are committed to promoting learning in the workplace through the Norwegian Strategy for Skills Policy 2017–2021.

The Government cooperates with the social partners on developing the Skills Reform and will play its part in further developing and reinforcing the tripartite collaboration going forward.

The challenges we are facing are not the same across Norway. The county authorities have therefore been given greater responsibility for regional skills policy, and will take steps to ensure that the regional labour market has access to the skills it needs. The county authorities know the local labour market and regional education programmes well. This puts them in a good position to address their new role as regional skills policy actors.

The county authorities are responsible for ensuring that upper secondary education and the vocational college sector are adapted to regional needs, and for creating links between universities, university colleges and other skills development institutions and the regional labour market. The Government will facilitate the county authorities in taking on this new and greater responsibility for skills policy.

Priority areas and main measures of the Skills Reform

The Government has initiated a number of measures to close the skills gap between labour market needs and the skills the workforce possesses. Work on the Skills Reform was started in 2018, and the Government will continue to gradually develop the reform in the years ahead. The Government has initiated measures to stimulate the demand for skills development, to open the education system for lifelong learning and to better connect demand for and provision of skills development.

Encourage individuals and enterprises to invest in skills

If more people are to choose to update their own or their employee's skills, each person and enterprise must perceive investing time and money in skills development as attractive.

Individuals in particular can feel that there are few benefits to be gained from investing in developing their own skills. The Government wishes to give individuals better opportunities to invest in developing their own skills. It has a particular focus on giving people who need a craft certificate or to update their vocational skills good opportunities to participate in relevant skills development.

The Norwegian State Educational Loan Fund’s financial support for education is the state’s most important instrument for ensuring that people can afford to take an education. For people in employment, a loss of income during a period of further education in addition to potentially high study fees for some programmes, mean that many cannot afford to take further education. The Norwegian State Educational Loan Fund’s financial support for education is intended to reduce this obstacle, but the scheme was first and foremost designed for young full-time students.

With the National budget for 2020, the Government has introduced changes that will make the Norwegian State Educational Loan Fund’s schemes more flexible. The Government will in this way contribute to ensuring that adults in employment with mortgages and parental responsibility can also afford to take further education if they need it. This will be particularly relevant for people who wish to make the transition to a new line of work and whose further education will therefore not be covered by their employer. The changes mean among other things that it will be possible to receive more funding adapted to the expenses of adults through an additional loan from the Norwegian State Educational Loan Fund. It will also be possible to receive a loan from the Norwegian State Educational Loan Fund even if the education programme is less than 50 per cent of a full-time study programme. There are also better terms and conditions for people over 45. In the long term, the Government will also consider other changes to adapt the Norwegian State Educational Loan Fund’s schemes to the labour market of the future.

Enterprises currently have relatively good incentives to invest in skills development. However, it is challenging for employers to find relevant programmes and for the education institutions to gain an overview of the demand. The Government will stimulate demand for skills development in enterprises through the Skills Programme. The Skills Programme will help to quickly close the skills gap in the labour market.

The programme will create more new flexible programmes that meet labour market demands. It will also test measures that may increase the demand for skills development. Skills Norway administers the Skills Programme, which in 2020 will be divided into three programme areas:

– Programme area 1 – funding for flexible further education programmes – will give tertiary vocational colleges, universities and university colleges an opportunity to apply for funding to develop new flexible further education programmes in cooperation with the labour market.

– Programme area 2 – tripartite industry programme for skills development – will provide funding to industry programmes where the state and social partners cooperate to increase participation in skills development within selected industries.

– Programme area 3 – incentive scheme trials for lifelong learning – will initiate and fund new incentive scheme trials.

The objective of this programme area is to generate knowledge of how such schemes work before potentially implementing them on a larger scale. In 2021, a trial involving grants for skilled workers will be initiated.

Programme areas 1 and 2 are continuations of measures that were implemented in 2018 and 2019.

Due to the coronavirus pandemic, the tripartite industry programme for skills development in 2020 was given a boost of NOK 100 million, and six new industry programmes will be initiated. NOK 50 million has been earmarked as part of the same skills package for scaling up existing digital programmes to enable the unemployed to quickly start skills development programmes. NOK 20 million has also been allocated to open relevant programmes at universities and university colleges for people who have been laid off and the unemployed.

Open education system for lifelong learning

To make lifelong learning possible for individuals, programmes must be available that can be combined with full-time or close to full-time positions. This is most beneficial to society and the individuals concerned. The Government will work to ensure that more further education programmes are available that can be taken in part during working hours or during leisure time, or a combination of both.

This will require more flexible programmes developed by the education provider in close cooperation with the labour market. The Government believes programmes that confer formal qualifications to be particularly important since employers have the weakest incentives to finance this form of skills development.

Formal qualifications are also valuable for entering new fields of work. Employers are responsible for skills development that is necessary for the enterprise, and enterprises have strong incentives to facilitate on-the-job learning and invest in non-formal training.

The Government has initiated measures aimed at opening the education system for lifelong learning at all levels:

– For universities and university colleges, the Government will invest in application-based schemes to increase the capacity for further education programmes. Funding for the development and operation of flexible study programmes, including further education, was announced by the Norwegian Agency for International Cooperation and Quality Enhancement in Higher Education (Diku)  for the first time in 2019. There is also a need to review and clarify current regulation of education programmes that are specially adapted to people in employment. Digitalisation is a key instrument to raise the quality and increase the availability of education. The Digitalisation strategy for the higher education sector 2017–2021 provides clear guidelines and will be followed up by a three-year action plan (2019–2021). The Government will revise the digitalisation strategy in 2020.

– Tertiary vocational education has been improved in recent years and, through new measures, the Government will continue to develop tertiary vocational colleges that educate people for the labour market. The Government will propose removing the limitation to the minimum duration of tertiary vocational education to enable tertiary vocational colleges to respond even better to labour market needs. The Government will also present a strategy for higher vocational education in the course of 2021.

– In the area of lower and upper secondary education, the Government will continue its efforts for adults with a weak attachment to the labour market with a view to making adult education more flexible and relevant to the labour market. The Government will also consider proposals from a number of committees on expanding the right to take upper secondary education.

Closer links between the provision of and demand for skills development

It is not enough to develop more flexible programmes and stimulate greater demand. We must also ensure the best possible match between the programmes that are developed and the demands of individuals and enterprises. Individuals and enterprises need information about the programmes and opportunities available, and the education institutions must have an overview of what skills development the labour market needs.

The Government will take the initiative to develop a digital skills platform that will connect education institutions with those who need more education and training, and increase the mutual flow of information. The Government will also prioritise a digital career guidance service to ensure that high-quality career guidance is available to everyone, regardless of where they live.

The state and county authorities can contribute to a better match between supply and demand by stipulating cooperation requirements between employers and education institutions. The county authorities have been assigned a greater role in skills policy in their respective regions. They have greater responsibility for ensuring that young people complete upper secondary education and that adults can learn throughout their lives. The county authorities have an important responsibility for creating links between enterprises and education providers in their region. They will use regional skills partnerships and strategies to actively connect the needs of the regional labour market with education programmes.

The county authorities will also be assigned an extended and more comprehensive responsibility for young people between the age of 16 and 24 to ensure that training and education become the main pathway for this group. The Government is assessing how this will be put into practice.

The Skills Reform depends on having the labour market on board. The Government therefore announces new and stronger efforts to achieve forward-looking tripartite collaboration.

[1] NHO’s skills barometer (Kompetansebarometer) for 2019 and Skills Norway’s business survey (Virksomhetsbarometer) for 2019.

[2] The Expert Committee for Further and Continuing Education 2019 (NOU 2019: 12), page 10.