The European Commission and Portuguese Government have announced a pilot program to tackle the skills gap amongst Portuguese workers. Currently, around 22% of the Portuguese workforce lacks even the most basic digital skills, one of the many consequences of Portugal’s relatively high poverty rates. In order to address this weakness, the pilot program will specifically focus on improving digital literacy in Portugal.
Since exiting its bailout program in 2014, Portugal has made impressive strides to reform its economy. The government has put its fiscal house in order, with the deficit expected to hover around 1% in 2018. With the economy set to grow by 2.2% this year, it seems that Portugal has finally rebounded from its sovereign debt crisis.
However, while the economy is indeed improving, parts of Portugal’s population have yet to feel the benefits of the country’s reforms. Just last month, Portuguese President Marcelo Rebelo de Sousa condemned the country’s persistently high level of poverty. As of 2016, 8.4% of Portugal’s citizens lived in circumstances described by the EU as “severe material deprivation”. This is higher than the overall EU average of 7.8%. According to De Sousa, “it is a national disgrace that in 2017 and 2018 we are one of the most unequal societies with such a high risk of poverty in Europe”.
This new pilot program is an example of how the government is trying to modernise its education system, which De Sousa identified as a key part of tackling poverty in Portugal. In particular, the project will focus on equipping adults with the relevant digital skills demanded by prospective employers. This will be achieved by expanding access to adult education and training, enhancing the quality and relevance of learning programs, and improving the sustainability of education and its governance structures.
Portugal’s digital skills gap ranks as the third largest in Europe. This deficiency is significant given the wage premium commanded by workers with higher levels of digital literacy. It is estimated that workers employed in positions requiring a basic level of digital literacy earn hourly wages that are at least 8% higher compared to jobs that don’t. Due to the increasing digitisation of the global economy and Portugal’s booming tech scene, this premium is likely to increase over the next few years. Consequently, tackling Portugal’s digital skills deficit will be an integral part of reducing poverty and unemployment, allowing citizens to be pulled up in the country’s transformation towards increased modernisation.
This new partnership between the Portuguese Government and the European Commission is part of the preparations for the launch of the EU’s Reform Delivery Tool, which seeks to further integrate Europe’s Economic and Monetary Union after 2020. Over the next two years, the EU will allocate nearly €143 million from its Structural Reform Support Programme to provide technical support for various pilot projects in different member states. The hope is that these programs will spur growth in struggling economies with positive spillover effects across the EU. In addition to investing in human capital, the Reform Delivery Tool will also promote reforms related to the labour market, tax collection, administrative policy, the business environment and capital markets.
If successful, Portugal’s pilot project has the potential to act as a template for similar reform programmes across the EU. More than 7 in 10 jobs in the EU require some basic digital skills, yet around one-third of European workers are at risk of falling behind the digital skills curve. Maintaining and updating the digital knowledge of Europe’s workforce is essential if the EU economy is to remain competitive.
This project, which is still in the initial planning phase, has the potential not only to improve the digital literacy of the Portuguese workforce, but also raise average incomes and facilitate entrepreneurial innovation. These enhancements will certainly help in transforming Portugal into the European technology hub it hopes to become.