Promoting skills and innovation to unleash technological progress

Innovation performance lags behind other OECD countries and there are indications that technological upgrades to production have slowed over the last decade. This is linked to poor educational outcomes and important skills mismatches. Moreover, spending on research and development (R&D) remains low in international comparison, despite an almost doubling over the past decade.

Despite considerable improvements in tertiary and secondary enrolment, around 40% of youth do not complete upper secondary education. Learning outcomes for 15 year-olds are below the OECD average. Moreover, important skill mismatches have emerged, with the number of unfilled vacancies increasing despite high unemployment. While skill shortages are most prevalent for medium-level skills, blue-collar work suffers from a poor reputation. The recent initiative to provide a free-to-use website that allows to compare the labour market prospects of higher education programmes may help reduce skills mismatches.

Increasing the provision and broadening the access to quality early childhood education would help improve educational outcomes. It would also pave the way for women to participate more actively in the labour force. Currently, the labour force participation rate of women is very low and women take up most of childcare and other housework.

Support for innovation needs strengthening. R&D support programmes should be redesigned if they prove to be inefficient and additional support be provided where needed. In particular, schemes that promote collaborative research projects between universities and companies should be reinforced.