The European Union may currently be the best place to live and work in but the challenges ahead of us, such as addressing climate change and the digital transformation of our economy, will require adaptation by every level of our society. Unless addressed well and in advance, these changes risk leaving a great segment of our society behind.

In its recent communication on a strong social Europe for just transition, the European Commission identifies the social areas that will require focus to ensure that the adaptation resulting from this green and digital economic transformation is turned into a drive for growth and for every European to have an equal opportunity to succeed.

We have known for some time that digitalisation will shape the economy of the future and, while many new job opportunities will emerge, many others shall become obsolete. The first strand to ensure a socially just transition will therefore be education, which is undoubtedly the tool to empower people to face the speed in which economic transformation will take place in the coming years.

More likely this transformation will require them to alternate between jobs, sectors, standard and non-standard types of employment over the span of a career. The basics of learning provision will of course continue to be ingrained in our own national educational systems, but more coordination among member states is desirable to share experiences, best practices and work towards common goals. The EU proposal for a European Education Area by 2025 seems to aim in that direction.

Long-term economic prospects are more uncertain

It is also important for the EU to continue providing the tools with enough public investment to facilitate mobility for learning;   to support frameworks for upskilling; for stronger promotion of subjects linked to the digital economy  and for investment in the digital capabilities for education providers.

It is encouraging to note that these aspects will be addressed by several EU programmes such as Erasmus+, the European Social Fund+ and the Digital Europe Programme, among others.  I expect these to be reinforced in the next EU Budget. 

The second strand to look at in this process of ensuring a socially just transition is to secure a healthy and consistent economic growth in order to create the right confidence for investment and low levels of unemployment thanks to the creation of quality jobs that provide a good standard of living to workers.

While Malta remains one of the best performing economies in the EU, in 2020 and 2021 both Malta and the EU overall are forecast to grow slower than previous years. Long-term economic prospects are more uncertain. Unemployment has steadily declined since the peak of the last crisis, but the question is whether this trend will continue or reverse.

The private sector, particularly SMEs, which account for 85 per cent of new jobs created in the last five years in the EU, require to operate in a business-friendly environment that promotes innovation, with good access to finance and smart regulation. Here too, one must look closely at the forthcoming EU industrial and SME strategies to ensure that the conditions for a good business environment are met.

The third and final strand for a socially just transition is to ensure equal opportunities and that no one is left behind. Some aspects relate to the economy and others to the educational systems.  A socially just transition also requires the ensuring of the provision of quality healthcare and of attractive active-ageing policies so that people with experience and relevant skills stay longer in the labour market.

 At the same time,  a sustainable safety net needs to be safeguarded to continue guaranteeing decent incomes to pensioners, support to the unemployed  and to those who, for different reasons, cannot be fully engaged in the labour market.

There is broad agreement on where the EU needs to go in order to meet its climate objectives and digital transformation while ensuring a socially just transition. But the path on how to go about achieving this, while ensuring that the economic conditions remain sound enough to be able to deliver on these ambitious commitments, is not that certain.

It is therefore important to continue setting policy at EU level that is informed by strong evidence in the form of impact assessments and, while setting broader EU frameworks, allow for decisions to be made at the closest level to businesses and citizens in order to address local economic realities.

Simon Decesare is president of the Malta Business Bureau.

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