By Dirk Van Damme 
Head of the Skills Beyond School Division,  Directorate for Education and Skills

In many countries, there are increasing concerns about the gap between the qualifications and skills that universities deliver, and those that the labour market demands. Employers are becoming especially vocal about this, claiming that they cannot find graduates with the skills sets they need. And as globalisation and digitalisation continue to transform economies, we can expect to see profound changes in the skills that employers demand in the future. In other words, the skills shortages of today might not be the same as those of tomorrow.

Ensuring that the supply of skills more or less matches demand – both today and tomorrow – is no easy undertaking. Higher education has the very difficult task of equipping students with generic and domain-specific knowledge and skills that last for a lifetime. This is almost impossible. Simplistic answers will not do, and past attempts at fine-grained “manpower planning” (i.e., estimating the demand for specific qualifications in the future and conditioning entry into studies accordingly) have often ended in failure. People often respond to different opportunities or experience life-events that change the course of their professional paths, sometimes by taking jobs that are not related to their study. And jobs demand often changes significantly, even within the four or five years that the study requires.

Consequently, higher education institutions in Norway and other countries seem to take a very relaxed attitude to labour market demands, and tend to maintain that giving students the choice to enrol in a given programme of study is still the best guarantee of motivation and success. They expect graduates to be able to cope with change and uncertainty throughout their lifetimes, whatever their field of study. In these countries, freedom of choice remains an important social value – but is this approach sufficient.

Today, we published Higher Education in Norway: Labour Market Relevance and Outcomes, a review of the Norwegian system’s capacity to link skills demand and supply. In many aspects, the situation in Norway is very positive. Indeed, high graduate employment rates and relatively high earnings in a booming economy suggest that there are almost no problems to worry about. But high employment rates and a compressed wage structure, in which it is difficult to measure returns on investment, can hide real problems. Good economic fortune can easily lead to complacency, whereas it should be seen as an opportunity to prepare for the future. And the Norwegian government knows that its future world will be different: less dependent on oil, more dependent on technology and more open to the world. Are the skills that university graduates attain the right ones to prepare the country for this transition?

The chart above displays the literacy, numeracy and problem-solving proficiency of Norwegian higher education graduates across a number of fields of study, as measured in the OECD Survey of Adult Skills in 2012. It indicates that there are important differences in graduates’ skills across different fields of study and the variation in these foundation skills is high. Yet these differences are not mirrored in labour market success. Health, welfare and education professionals seem to have relatively low levels of foundation skills, but they enjoy some of the best employment rates and most stable earnings of all graduates, thanks to the continuous demand for skilled labour in their respective sectors. In contrast, graduates from the arts and the humanities have relatively high skill levels, but relatively weak labour market outcomes. Compared to graduates in other fields of study, arts and humanities graduates have a harder time finding jobs that make full use of the knowledge and skills they developed in higher education.

Our report suggests various measures and strategies to strengthen labour market relevance and outcomes of higher education in Norway: for example, by more directly connecting studies to the world of work, strengthening cooperation between institutions and social partners, or improving labour market information and career guidance systems. But a more profound reflection is needed to ensure that the country’s higher education system delivers the skills and qualifications needed in the economy and society of the future. Norwegian universities still place a very high value on domain- and discipline-specific knowledge. But Norwegian graduates will need much deeper and broader transversal skills (cognitive, non-cognitive, social and emotional) to deal with uncertainty and change, and to perform future jobs.

Today, there is no clear consensus view about the role of higher education in developing the skills outside the traditional discipline-specific ones. But it is clear that universities, governments and social partners in Norway have a shared responsibility to actively improve the labour market relevance of higher education.

Read more:
Higher Education in Norway: Labour Market Relevance and Outcomes