Professor Melinda Mills, Director of the Leverhulme Centre for Demographic Science, has been appointed as of one three Special Advisors to Paolo Gentiloni, the European Commissioner of the Economy. Paolo Gentiloni has served as the European Commissioner for the Economy in the von der Leyen Commission since December 2019. He previously served as Prime Minister of Italy from 2016 to 2018.
Mills will advise the Commissioner on socioeconomic matters. This is an extension of her previous work on the European Commission’s High-Level Group on post-COVID economic and social challenges. The report from this group, published in March 2022, is freely available here: A New Era for Europe: How the European Union can make the most of its pandemic recovery, pursue sustainable growth and promote global stability. A summary can also be found in this VoxEU article and a Daily News highlight on the European Commission's Press Corner.
A brief summary of Mills’ work on the future of employment in a post-COVID Europe
In her advisory role to the High-Level Group, Mills authored the part of the report entitled “The future of employment in a post-COVID Europe: Building resilience through a fair social, digital and green economy.” (for full chapter see pages 79-107 here). Here she reiterates that the COVID-19 pandemic has been an exceptional exogenous shock, accelerating digitalisation, forcing a re-evaluation of ways of working and living, but also exposing inequalities, gaps in skills, the vulnerability of certain industries and economies, and dependence on supply chains.
Intersectionality of inequalities during COVID-19 & heterogeneity of policy responses Mills’ work first evaluates how the pandemic transformed employment and examines the heterogeneity of policy responses across Europe.
She shows how COVID-19 has exacerbated often overlapping or intersectional inequalities, with young people, migrant workers, self-employed, temporary workers and the lower-skilled being hardest hit, albeit with variation by type of firm and industrial sector.
Figure 21 from her chapter below shows the disproportionate impact on employment for youth (Fig 4a), the lower-skilled (Fig 4b), women (Fig 4c) and those in temporary contracts and self-employed (Fig 4d).
Employment dynamics across different groups (by age, skills, gender, and contract type)EU
Source: Source: Mills (2022), Figure 21, p. 87 ECFIN calculations based on LFS. Note: Employment is measured in persons. Data are seasonally (but not calendar) adjusted and presented as an index, with 2019Q4 = 100. Mills’ work also emphasizes that the acceleration of new forms of digital and flexible employment relationships demands policies that tackle work-life balance and account for employees’ health, legal and financial implications and the question of how firms have to re-evaluate multiple aspects from security, productivity to office space.
Reskilling, infrastructure and digitalisation of services required to realise the digital economy Building a resilient digital economy, Mills argues, demands infrastructure investment, digitalisation of data and public services, IT, fintech, and computing, but also an acknowledgement of diverse starting points across the EU. Figure 23 from her report plots the percentage of individuals who report very good digital and technical skills and daily internet use in Europe. Here we see that countries such as the Netherlands, Sweden, Denmark and the UK have very high levels, with considerably lower levels in eastern and southern European countries. This suggests that the policy focus should not only invest in building infrastructure and reskilling workers, but also in more general skills training, so that the general population is able to use and embrace basic digital, computer and information skills.
Percentage of individuals reporting very good digital and technical skills (yellow) and daily internet use (purple), European countries
Source: Mills (2022), Figure 23, p. 97 : Produced from Eurobarometer 92.4 (2019). Building a resilient green economy demands innovation, infrastructure and reskilling
A shift to the green economy will generate new jobs in carbon capture storage, renewables and clean energy, land-based agricultural and ecosystem innovation, new infrastructure and retrofitting of buildings.
But, Mills shows, there is variation in starting points towards a green economy. The Global Green Economy Index (GGEI) mapped in Figure 24 in Mills’ publication, measures 20 underlying indicators across the four dimensions of leadership and climate change, efficiency sectors, markets and investment and the environment from zero (low) to 1 (high) performance. The graph reveals considerable variation across Europe, with the Nordic countries, Switzerland and Germany scoring high, southern European countries and the US in the middle, and eastern European countries and the Russian Federation with the lowest green economy performance. Some countries have considerably longer and divergent paths to follow than others. Mills also highlights varying levels of public awareness of the climate emergency across Europe.
Global Green Economy Index (GGEI), 2018, Europe and selected countries
Source: Mills (2022), Figure 24, p. 101 Graphs produced by author using data from (Dual Citizen 2018) Measures include aspects such as climate change performance, buildings, transport, energy, renewable energy investment, cleantech innovation, green investment and environmental aspects (e.g. air quality, water, biodiversity, fisheries and forest).
The transition must be fair and linked to education and job creation
Mills emphasizes that the shift to a digital and green economy is only palatable if it is fair and linked to education and job creation, recognition of different starting points and regional and group inequalities, with an urgent need for upskilling and reskilling and the development of agile educational training.
In a period of deep economic crisis and recovery, there will be pressures to channel money to competing causes, with longer-term threats such as climate and infrastructure development ignored. Mills argues that the problem must be grasped with political realism, accepting that the digital and green shift will only be deemed acceptable when coupled with advantages for the public.
Europe has fallen behind on R&D investment and is dependent
Mills also emphasizes that Europe has fallen behind on R&D investment and is dependent on components, energy and supply chains that fuel new digital and green technologies. Figure 26 from her work plots R&D expenditure as a percentage of GDP by the number of researchers per million inhabitants, with recent R&D investment driven largely by the US and China. Countries such as Korea, Japan and China have had continuously higher levels of spending, accompanied by highly skilled researchers. China accounts for 44% of global growth in research expenditure, while the US accounts for 19.4% and Europe 11% (UNESCO 2021). The US has recently pivoted to very high levels of R&D spending per capita in a plan to rebuild infrastructure, focus on clean energy technology, generate employment and enhance innovation.
The figure also shows variation in R&D spending and researchers across Europe, with high levels in Nordic countries and also Germany, Austria and Belgium.
European countries in southern and Eastern Europe, but also Ireland and the UK, are falling behind in R&D spending and the highly skilled researchers that fuel innovation.
To note, the figures on global R&D spending are from 2017/18 and during and after the pandemic are likely even higher, particularly in biomedical, health and technology research.
R&D expenditure as percentage of GDP by researchers per million inhabitants, Europe and selected countries, 2017/2018
Source: Mills (2022), Figure 26, p. 105, produced using data from UNESCO (2021)
Note: Notes: R&D: research and development, GDP: gross domestic product. Circle size corresponds to the total expenditure in 2005 US dollars. Figures for 2018 are used, with the exception of several countries where only 2017 figures are available.
Echoing previous work by Oxford’s Cameron Hepburn and colleagues, Mills argues that as infrastructure is developed or renewed, attention likewise needs to be placed on energy storage, grid modernisation, renewables, zero-emission nuclear power plants and hydrogen power, or carbon capture technology. Beyond investment in only technology, infrastructure, skills, Mills emphasizes that post-COVID-19 recovery and developing the digital and green economy should not underestimate real barriers and bottlenecks related to legislative, planning, supply chain and capital investment needs.
Mills’ chapter was written in June 2021 and the report from this group, published in March 2022, is freely available here: A New Era for Europe: How the European Union can make the most of its pandemic recovery, pursue sustainable growth and promote global stability.
A summary can also be found in this VoxEU article and a Daily News highlight on the European Commission's Press Corner.
