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Regions as contributors to more social Europe – vision from the Basque Country

Author: The Delegation of the Basque Country to the EU
Published Date: 29 September 2017

Challenges, trends, risks and opportunities

All member states and regions are facing common social challenges in today’s changing and complex EU environment, including social inequalities, ageing population and youth and long term unemployment.

Furthermore, there are long term trends that persistently threaten to affect the advances in social rights achieved in the EU. These trends include:

– The digitalisation of the economy, jobs and society in general produces new business models, requires new skills from all workers and causes the emergence of the so-called digital leaders, new jobs and the disappearance of others, along with insecure labour relations and more fragmented careers;

– A growing life expectancy and low birth rates in EU member states and regions have led to a significant demographic ageing, which increases the financial pressure on the welfare systems, particularly regarding pensions, and drives the arrival of new services and products to foster active ageing and to decrease the dependency ratio;

– Social changes in a broader sense, both in the social structures and the work and family patterns, with a growing perceived need for a work-life balance, and, on the other hand, a new relationship paradigm among institutions, private and public stakeholders and individuals, where there is a call for a better governance, transparency, accountability and co-responsibility. Social innovation and technological innovation emerge in this new scenario as drivers for people and society to define their problems and design solutions by means of collective intelligence collaborative processes. In the case of social policies, the new paradigm of social investment highlights investment and prevention in people and families to foster more resilient and sustainable societies.

Linked to those trends, EU member states and regions are facing risks related to:

– Skill obsolescence, particularly in the case of older and less educated people, which leads to chronic long term unemployment of many workers, generates important social inequalities and a segmented job market, and increases poverty, deprivation and the social exclusion of the most disadvantaged. Furthermore, countries and regions fight to attract and retain talent;

– The deterioration of social protection systems and access to basic goods as a result of financial pressure on them if a real commitment to its effectiveness and sustainability is not made, understanding that even if adjustments and innovations will be necessary, they are consolidated social rights that are part of the European identity;

– High technological and economic development only in some advanced businesses, states and regions, generating regional imbalances and significant social inequalities that produce an unwanted breakdown of the European social and economic convergence project, thanks to which Europe has experienced years of peace, prosperity and social progress.

At the same time, new opportunities emerge in this scenario:

– The reinforcement of workers’ qualifications, particularly of young people, brings new potential to address current and future challenges;

– New jobs niches in opportunity sectors as the demographic ageing and increasing dependency ratio create new prospects for innovation, both from a technological and social perspective, in the provision of new products and services;

– Migratory movements, particularly those involving nationals from third countries. Supporting their early social inclusion and employability will bring a wealthy and plural society, based on solidarity and, similarly, will mitigate demographic ageing and compensate the decline in the workforce;

-The commitment to the Regional Research and Innovation Strategies for Smart Specialisation (RIS3) to drive sustainable environmental, social and economic growth.

Rebuilding the European social model with the contribution of EU regions

Regions are the EU’s essential partners to address this complex situation. They are closer to citizens and they have the potential to take the lead and give innovative responses to common social challenges, facing the identified risks and seizing new opportunities.

Besides this, regions have already proved themselves as excellent managers of the European social model and as benchmarks for employment and social policies, thereby contributing to a more social Europe.

Some examples of these regional benchmarks can be found in the area of business organisation, through industrial clusters that allow smooth relationships between the companies throughout the value chain, thus enabling the support of large and small enterprises in the same region.

Another example, in relation to the workers’ participation in businesses, is the experience of cooperatives that have generated sustainable employment capable of better withstanding the consequences of the industrial, financial and economic crisis than other models.

As regards social protection policies, the social inclusion and income guarantee systems that combine the employment activation and social services, have had a positive impact in cutting poverty and no-wellbeing rates in the regions.

Lastly, dual vocational training systems have enabled the needs of industrial SMEs to be met, and supported the early employability of young people with vocational training qualifications.

A more social and caring Europe is needed and the current reflection process launched by the European Commission on the social dimension of Europe, together with the European Pillar of Social Rights, brings a unique opportunity to advocate for rebuilding the European social model with the contribution of EU regions.

Therefore, EU regions should continue taking action in the most pressing priorities:

– Training a workforce with more and better qualifications, particularly in the case of long-term unemployed, with an emphasis on transversal and digital skills, as outlined in the Skills Agenda for Europe;

– Increasing the labour force ratio, by removing barriers to young people and women´s access to employment and by encouraging 55-65 years olds not to give up working, by means of age management in organisations and on the labour market;

– Fostering decent working conditions, with fair salaries, easy employment transitions, investment in human capital and geographical and sectoral job mobility that does not undermine labour rights:

– Designing universal social protection systems, with access to basic social goods and minimum incomes, which protect against poverty and deprivation, give impetus to the social integration and employability of disadvantaged people and are effective and sustainable, without forgetting the link between environmental, social and economic development.

In a nutshell, the pressing priority is to achieve job markets and welfare systems that function correctly and are fair, as set out in the European Pillar of Social Rights. This should be based on the clear evidence that investment in human capital is an important transmission mechanism between long-term growth, equality and social progress.