“How to achieve Latvia’s sustainable growth and promote growth of welfare?”, as the country’s Ministry of Economics rhetorically asks in its media release on the situation with the labour market. The ministry predicts the proportion of higher-skilled jobs in the country will increase, whereas the proportion of medium and low qualifications will go down.
The ministry’s answer to its own question, looking at the government’s announced priority: the country needs a transformation of its economy with a focus for the creation of high added value products, higher activity in export markets and wider use of digital solutions in the domestic market. Transformation of the economy will require highly qualified workforce. The number of jobs that require low and medium qualifications will go down.
“Introduction of new technologies, development of new products and services, as well as wider use of digital solutions and optimisation of various processes will contribute a great deal to a more rapid development of various sectors and the national economy as a whole. Availability of workforce is another important factor to ensure a more rapid economic growth.
This is why it is important to adapt education offers for existing and future labour market needs
to improve competitiveness of businesses and promote the national economy’s restructuring from low to medium and high technologies sector and ensure better welfare for residents,” explains the Minister of Economics Ilze Indriksone.
“What should our youngsters study to earn more money in the future?”, the minister continues, answering the question at the same time: according to the latest labour market outlook, there will soon be a severe shortage of specialists with education in exact sciences.
The shortage of specialists in natural sciences, ICT and engineering sciences could exceed 9 000 people in 2030.
The shortage of specialists with secondary education could reach nearly 70 000 people.
An especially severe shortage will likely appear for specialists with vocational education in engineering sciences and manufacturing.
People with secondary education, primary education and the lowest education will have a difficult time finding jobs. The ministry predicts the surplus of workforce in these education levels could reach nearly 96 000 by the year 2030. People with higher education in social, commercial and humanitarian sciences may experience problems with finding a job as well.
The biggest increase of new jobs is expected for professional, scientific and technical services, ICT services and construction by the year 2030.
At the same time, in a long-term perspective or by the year 2040 there will likely be a majority of jobs in Latvia for professionals, scientific and technical services, as well as ICT services. The can be said for health and social care services, which are mostly influenced by the continued population ageing trends and growth of demand for various healthcare, rehabilitation and other “silver economy” related services.
Challenges experienced in recent years – Covid-19 pandemic, increased tension with the geopolitical situation – have left an impact on the labour market, because the number of employed people remain behind the pre-pandemic and pre-war level. With increased economic activity the situation on the labour market is gradually stabilising. However, it also narrows employment offers and increases shortage of workforce.
Although population decline in Latvia is expected to become slower by the year 2040, ageing of the population will continue, as well the reduction of the number of residents of working age. The biggest drop in population numbers is expected among residents of working age. This means the demographic processes will leave a significant impact on the labour market.
Considering demographic trends, unemployment both in the medium and long-term perspective will go down. It may drop below 7% this year. Generally unemployment in both the medium and long-term perspective will be close to its “natural level” (5-6%). The highest unemployment risks are for residents with a low education level and people who do not have professional skills/professional qualifications, warns the ministry.
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