Huge potential for digital job creation in

Europe: an additional 372.000 to 864.000

jobs are achievable by 2015
ICT jobs are in high demand in industry. Past developments have shown that they are much more
resistant to crises than most other jobs. The market absorbs more than the annual output of ICT
graduates from universities and the education system and there are clear signs that ICT-related
occupations are going to be subject to even greater demand in the coming years and after the crises.
However, a drop in the number of ICT graduates leaving universities and the retirement of ICT
workers over the coming years are endangering the ICT job growth potential. There is a huge
opportunity for job creation which Europe should not miss. Europe and European national
governments and stakeholders have the possibility to create a further 372.000 to 864.000 ICT jobs up
until 2015 which the market would be ready to absorb. This would close the forecasted e-skills gap.
The ICT labour market is growing
The ICT workforce in Europe in 2011 amounted to 6.67 million which is 3.1% of the overall
workforce. It has been growing over the past decades and will continue to grow in the future. There
has been a steady increase in the number of ICT practitioners in the workforce and there is no
indication that this trend will change. The annual growth of ICT employment has remained very
robust throughout the crisis so far. From 2000 to 2010 the ICT workforce grew at an average annual
rate of 4.26%. Even at the times of the economic and financial crisis which Europe is undergoing since
late 2008, growth remained at 2.65%. The labour market seems to absorb all ICT graduates even
throughout the crisis and is demanding more.
ICT workforce growth 2000-2011

4.500.000
2008-2010: 2.65% p.a.
4.000.000
3.500.000
3.000.000
2.500.000

2001-2004: 0.89% p.a.

2000-2010: 4.26% p.a.

2.000.000

Source: Eurostat LFS. Narrow definition: 2000-2010 ISCO-88 groups 213, 312: Computing professionals and Computer
associate professionals. Break in series 2011: ISCO-08 groups 25 ICT professionals, 35 Information and communications
technicians.

Growing e-skills demand and decreasing supply is likely to even further increase the e-skills gap
until 2015 and beyond
However, interest in pursuing ICT careers seems to be diminishing among younger generations. The
number of computer science graduates was growing in the past, but has been in continuous decline
in Europe since 2005. Even more, the speed of decline is what makes the situation rather dramatic.
The effect of the decrease in the number of entrants to the ICT workforce is intensified in Europe by
an increasing number of exits as ICT practitioners leave the workforce. We can calculate retirement
figures of ICT practitioners with high levels of certainty.
Together with the decline in ICT graduates figures it is likely that e-skills excess demand will
increase rather significantly when the current economic crisis comes to an end. The bottom line is:
Europe is not producing sufficient numbers of ICT graduates to satisfy the demand.
Already today, demand for ICT workers is outstripping the supply. The results of a representative
empirica survey of CIOs and HR managers in eight European countries in 2012 show that the excess
demand for e-skills, i.e. ICT professionals and practitioners, extrapolated to the whole of Europe (EU27) can be estimated at around 255.000 in 2012. This is the number given by CIOs and HR managers
in European organisations for the number of vacancies in ICT-related occupations.
Forecasts until 2015 show an increasing shortage of e-skills and a huge potential for sustainable
ICT job creation in Europe
Based on several scenario-based forecasts empirica estimated the likely future development in eskills demand and supply in Europe for the European Commission. In a Cautious Growth scenario
the e-skills excess demand or shortage amounts to 372.000 in 2015 compared to 255.000 at
present. In a more optimistic Return to Confidence scenario the shortage, i.e. the theoretical
number of ICT vacancies amounts to 864.000 in 2015.

Expected e-skills demand growth in Europe

(by scenario) 2011 - 2015

Expected e-skills supply growth in Europe

(by scenario) 2011 - 2015

8.500.000

8.500.000

8.000.000

8.000.000

7.500.000

Extrapolation 2.65%
growth
Synthesis: Cautious
Growth

7.000.000

Extrapolation 2.65%
growth

7.500.000

Synthesis: Cautious
Growth

7.000.000

Synthesis: Return to
Confidence

Synthesis: Return to
Confidence
6.500.000

6.500.000

6.000.000

6.000.000

2011

2012

2013

2014

2015

2016

2011

2012

2013

2014

2015

2016

e-skills shortages: expected ICT job vacancies in Europe 2011 - 2015

1.000.000
900.000

864.000

800.000
700.000

676.000
610.000

600.000
500.000

487.000
372.000

400.000
300.000

363.000

255.000
205.000

220.000

259.000

200.000

254.000

199.000
173.000

100.000
0

2011
2012
Return to Confidence Vacancies Total

2013
2014
2015
Cautious Growth Vacancies Total

Return to Confidence - practitioners

Cautious Growth - practitioners

Return to Confidence - mngmt & architc

Cautious Growth - mngmt & architc

These figures should be seen as a (theoretical) figure describing the demand potential for new ICT
jobs which under the above assumptions could theoretically and additionally be created in
Europe and which the labour market would be able to absorb.
The forecasts reflect rather realistic possible futures since they are based on realistic assumptions.
The Cautious Growth features a rather flat GDP growth of 0.9% to 2015 and an ICT spending
growth of 2.1% annually. Return to confidence features a slow return to GDP growth in the area of
1.3% until 2015 and a return to moderately optimistic ICT investment growth rates of 2.9. These are
rather conservative estimates given the fact that GDP growth over the last decade ranged from 1.5%
to 3.3% with only one negative exception with -4.3% in 2009.
As a bottom line we can therefore conclude that there is a huge potential for sustainable job creation
in Europe with an additional 372.000 to 864.000 ICT jobs which are achievable by 2015.

Need for European and national actions to achieve and implement projected ICT job creation
potential
In order for Europe to make this happen and reap the benefits it needs to set in gear European,
national Member State and key stakeholder actions and activities which bear the potential to create
the above numbers of qualified ICT professionals to close the skills gap and put Europes industry in a
position to increase its competitiveness and job creation potential.
It is recommended to target actions towards firstly, increasing the university output of ICT graduates,
secondly, making more intensive use of further training individuals through industry-based training
and certification activities to increase the number of e-skilled workers and thirdly, fostering mobility
within Europe and immigration from outside Europe to close gaps in countries with e-skills excess
demand with ICT professionals from countries with an e-skills oversupply.
Actions which are likely to achieve short-term results are those intensifying the use of industry-based
training and certification, followed by those addressing mobility and immigration issues and finally
actions addressed to the tertiary and vocational education system.
Failure to do this will result in a situation where European industry will not be able to start or at least
have to terminate or postpone important software investments or ICT projects thereby running the
danger of losing competitiveness and innovation capabilities and Europe continuing with not reaping
job creation potentials for ICT jobs.
It is high time for action now.

More background information on the calculation and estimation of e-skills

demand and supply baseline and forecasting figures
For measuring e-skills demand and supply inflows and outflows to/from the labour market need to
be identified and statistically measured and future developments modelled to gain a comprehensive
and complete picture of e-skills supply in the market.
The e-skills supply stock includes individuals in ICT practitioner positions and unemployed ICT
practitioners. E-skills inflows to this stock include new market entrants, typically computer science
graduates of tertiary education entering the labour market, other graduates, from mathematics,
natural sciences, engineering or social sciences who possess the IT skills demanded and career
changers originally coming from a non-ICT background or re-entrants who had been out of the labour
market previously. Our research has shown that certification has become crucial for ICT practitioners
across all backgrounds and it can be assumed that especially for educational outsiders certification
and re-skilling programmes play a crucial role in adapting the workforce skills to the demand side
requirements. Finally, immigration is a source of additional supply to the market. Supply side exits
may be due to retirement, temporary leave (e.g. parental leave) and emigration of ICT workers as
well as promotion or other career change to non-ICT jobs.
e-skills demand potential up until 2015 and beyond has been calculated and estimated based on a
number of observations including the fact that the ICT workforce has been growing over the past
decade despite the crisis and that the correlation between ICT workforce and GDP and IT investment
is disappearing somewhat. We can observe a decreasing influence of economic cycles and a stronger
indication of mega-trend. As a consequence for forecasting one should put a stronger weighting on
trend in favour of economic situation. The forecasts until 2015 are based on a series of
assumptions on inflows and outflows which relate to the
Entry rate of ICT graduates, both from tertiary and vocational education (ISCED 3-5) into the ICT
workforce staying at around 90%;
Development in the numbers of ICT graduates from tertiary education and from vocational
education from 2011 to 2015 using estimates from CEDEFOP research and varying between the
two above scenarios in tertiary education between an increase of 10% and 13% respectively. For
vocational education we assume an increase of 4%.
Entry rates of STEM graduates entering the ICT workforce which in the absence of reliable figures
are estimated at 5% today and to increase by 50% until 2015;
Upgrading of skills of outsiders and career changers through industry-based ICT training
certifications, which in the absence of a reliable data source has been set at 10.000 p.a.;
Replacement demand of ICT practitioners and ICT management staff leaving the workforce
annually, again using the most reliable sources from CEDEFOP;
Expansion demand of ICT practitioners varying according to scenario with a baseline based on
applying historical correlations of GDP and ICT investment and a trend component and using data
and the analysis experience from world-renowned IDC Europe experts in this field;
E-skills excess demand baseline 2011 based on the empirica CIO / HR manager survey on ICT
vacancies from 2012 showing an excess demand of 255.000;
Intra-EU migration from excess supply to excess demand countries (only in those years and from
those countries where excess supply exists).

Annual growth of ICT workforce in Europe 2002 - 2011

2002
Net gain1
Replacement demand2

2003

2004

2005

2006

2007

2008

2009

2010

2011

12.000

71.000

50.000

430.000

277.000

138.000

191.000

163.000

163.000

242.000

131.000

133.000

135.000

146.000

153.000

157.000

162.000

167.000

171.000

177.000

143.000

204.000

185.000

576.000

430.000

295.000

353.000

330.000

334.000

419.000

Total new demand

(sum)

Source: Eurostat LFS, replacement demand our estimate.

ICT workforce entrants from tertiary and secondary/vocational education in ICT in Europe 2002 2010 3
2002

2003

2004

2005

2006

2007

2008

2009

2010

91.600

103.300

113.600

123.100

125.000

118.900

119.800

113.900

113.300

VET

34.500

22.600

95.500

75.100

62.100

49.800

60.600

62.300

46.700

Total

126.100

125.900

209.000

198.200

187.100

168.700

180.400

176.200

160.000

Tertiary
Secondary /

2011
:
:

Source: Eurostat educgrad_5

EU-27 calibrated delta year on year of workforce according to ISCO-88 narrow definition: 2000-2010 ISCO-88 groups
213, 312: Computing professionals and Computer associate professionals. Break in series 2011: ISCO-08 groups 25
ICT professionals, 35 Information and communications technicians. Calibration assumes a stable relationship of our
broad definition (6.67m 2011) and the core definition (4.29m 2011) of 1.55

Based on the assumption that 2.66% of workforce retire per year in this period

The first figure represents a count of first degrees in ISCED 5A and first qualifications in 5B. The number of students
entering the labour force in a given year does not equal but is approximated by this number of graduates, as many will
go on to second or further degrees (master, PhD). However, also counting second degrees would mean that every
student is counted more than once, even if in different years. By counting only first degrees/qualifications, every
graduate will be counted only once (except the supposedly very rare cases of doing both a 5A and 5B degree), even if
labour market entry may be at a later point in time. However, there may be an issue of double counting with initial
vocational degrees (ISCED 3 and 4, the second figure), to which individual learners may later add an ISCED level 5
degree