Skills anticipation in Estonia (2022 Update)

Summary

Overview of the Estonian approach

Although skills anticipation does not have a long history in Estonia, the country has in recent years made a large investment in skills anticipation to develop a more holistic and coordinated system. As such, the process offers increased opportunities over the coming years for the use of skills anticipation outputs in policymaking by various stakeholders.

Estonia currently undertakes the following exercises:

• skills assessments (reviewing past trends at national and sectoral levels and assessing how various drivers of change will affect future skills demand);
• labour supply and demand forecasting by sector, occupation, and education (the Ministry of Economic Affairs and Communications’ annual forecast).

Notably, the System of Labour Market Monitoring and Future Skills Forecasting (Oskuste Arendamise koordinatsioonisüsteem, OSKA), funded primarily by a European Social Fund (ESF) grant, was established in 2015 to better coordinate skills anticipation activities. The main goal of OSKA is to better involve stakeholders in the process of skills anticipation. A coordination council, comprised in part of stakeholders, has been set up to oversee the system. Another relevant body is the Foresight Centre, which is a think tank at the Estonian parliament; its tasks include analysing long-term developments in society, identifying new trends, and drafting development scenarios. Furthermore, sector skills councils comprised of stakeholders and experts from the labour market also play a large role.

By combining existing quantitative projections with the qualitative inputs from labour market experts, the system of skills anticipation is intended to provide a much more holistic view of the labour market.

Description

Skills anticipation in Estonia has to date been primarily based on the annual employment forecast conducted by the Ministry of Economic Affairs and Communications (Majandus- ja Kommunikatsiooniministeerium). In recent years, however, Estonia has invested substantially in reforming its skills anticipation process, including the OSKA system of labour market monitoring and skills forecasting. OSKA, which was launched in 2015, produces data to supplement the Ministry of Economic Affairs and Communications’ forecasts.

The Ministry’s forecasts are quantitative in nature, relying primarily on data provided by Statistics Estonia (Statistikaamet). OSKA subsequently incorporated further qualitative and quantitative assessments to augment these forecasts and produce deeper insights into skills demand, supply and mismatch for the coming five to ten years. In this regard, OSKA provides a holistic system of skills anticipation, by incorporating both the employment forecast made by the Ministry of Economic Affairs and Communications and offering a deeper analysis of individual sectors by utilising expert knowledge drawn from stakeholders and social partners. OSKA has been implemented by the Ministry of Education and Research (Haridus- ja Teadusministeerium) and it is co-financed by the ESF. The Estonian Qualifications Authority (Kutsekoda) is responsible for the daily administration of OSKA. The Ministry of Economic Affairs and Communications, the Ministry of Social Affairs (Sotsiaalministeerium) and the Ministry of Finance (Rahandusministeerium) also contribute to skills anticipation along with various representatives of other organisations.

In addition, various other independent bodies, such as trade unions and employers’ confederations, also conduct skills anticipation exercises. These are not carried out on a regular basis and tend to have a narrow focus. Enterprise Estonia (Ettevõtluse Arendamise Sihtasutus), for instance, carried out studies on manufacturing sectors prior to the introduction of OSKA. The foresight activities which were administered by the Estonian Development Fund (Eesti Arengufond) until its dissolution also produced several in-depth studies of specific growth sectors. Another relevant body is the Foresight Centre, which is a think tank at the Estonian parliament; its tasks include analysing long-term developments in the society, identifying new trends and development avenues, and drafting development scenarios. The Foresight Centre bases its studies on a variety of possible developments and outlines alternative scenarios.

In 2017-2019, Cedefop offered technical support to Estonia, aiming at the review of skills governance in the country, focusing on OSKA. Based on stakeholder perspectives on its achievements so far, and identification of development opportunities, the review led to the development of a roadmap with several specific actions.[i]

Aims

The forecasts conducted by the Ministry of Economic Affairs and Communications have, to date, been mainly used to formulate vocational education policies. They have thus served to provide a guide for policymakers in deciding upon the content of education programmes delivered by the state.

With the arrival of OSKA, the overall goals of the skills anticipation activity have been revised. The information provided by the process is now intended not only to advise on educational policy, but also to provide an information base that will be of use for career counselling services and in qualification design. Furthermore, the process also aims to improve the dissemination of results by closely involving relevant stakeholders in skills anticipation.

Legal framework

OSKA, and the role of the governing bodies that administer it, are codified in the amended Professions Act (2015)[ii].

Governance

The following authorities are to some extent responsible for the administration of skills anticipation activity:

• The Estonian Qualification Authority
• The Ministry of Economic Affairs and Communications
• The Ministry of Social Affairs
• The Ministry of Education and Research
• The Ministry of Finance.

The OSKA Coordination Council is comprised of representatives from the four ministries and various stakeholder organisations. Its role is to select the economic sectors to be studied for each year; commission new analysis and/or research; approve the results of sectoral reports; submit an overview of skills needs to the government; make recommendations to other governmental bodies or institutions on how to best meet the skills needs of the labour market; and to prioritise among sectors and occupational groups.[iii]

The establishment of 24 sectoral expert panels (20-30 sectoral experts each) started in 2015. These panels are following developments within their area of expertise, including assessing the employment forecasts made by the Ministry of Economic Affairs and Communications and other entities working on behalf of the OSKA Coordination Council. Currently, OSKA have analysed around five to six sectors a year, since 2016. The aim is to cover all economic activities (i.e. sectors) in five years, and to repeat the panels every five years.

The role of stakeholders

The main stakeholders in skills anticipation activity are employers, trade unions, education and training institutions, and various third-party organisations that have an interest in skills. However, until this point, the limited tradition of social partnership in Estonia and the lack of formal inclusion of stakeholders in the skills anticipation process has meant that stakeholders’ contributions to policymaking have been limited. Consequently, stakeholders have not shown much interest in participating in skills anticipation activity.

With the deep involvement of stakeholders in the governance of OSKA, this has changed Before the implementation of OSKA, the role of stakeholders was limited to providing comments on the forecasts made by the Ministry of Economic Affairs and Communications. With OSKA now in place, the role of stakeholders has expanded considerably. OSKA guarantees stakeholder input in policymaking through the OSKA Coordination Council, which has the power to make recommendations regarding labour market and educational policy. It also has the power to determine which sectors receive a greater focus in OSKA, and comments on the assessments used by policymakers in decision-making.

The implementation of this system has both increased the involvement of stakeholders and created a systematic process by which they can provide input into skills anticipation. Representatives from employers and trade unions have seats on both the OSKA Coordination Council and the sector skills councils. Representatives of educational institutions also have a sizeable role in the process. Additionally, the process places an emphasis on the input of sectoral experts – who are usually representatives of key stakeholder institutions – in its assessments of skills needs and supply.

Target groups

The results of the skills anticipation activity in Estonia are intended for use by policymakers, education and training institutions, career and student counsellors, and other interested parties. The information is intended for use by policymakers in determining the curriculum for state-run schools and adult training programmes – such as those run for unemployed people by the Ministry of Social Affairs. The information is also used by policymakers in assigning budgets to different educational sectors and institutions. Career and student counsellors can use the results to improve their advice and guidance.  

Funding and resources

The OSKA system has been allocated a budget of €0.8 million for the 2018. Of this amount, up to 85 per cent is financed by the ESF while the remaining 15 per cent is financed by the Estonian government, specifically in cooperation with the Ministry of Education and Research, the Ministry of Economic Affairs and Communications and the Ministry of Social Affairs.[iv]

Methods and tools

There are several tools used for undertaking skills anticipation in Estonia.

Skills assessment

OSKA marks the first implementation of a structured and routine skills assessment process within Estonia. The project is part of the Estonian Lifelong Learning Strategy 2020 and is intended to fulfil the goal of harmonising learning opportunities with the demands of the labour market.

The programme combines the quantitative data, supplied by the Ministry of Economic Affairs and Communications through its annual employment forecasts, with qualitative data in the form of expert contributions (e.g. via expert panels) and other relevant quantitative and qualitative data (such as previous sectoral surveys or development plans).[v] These experts are drawn from the sector skills councils as well as from various stakeholders within each sector. By combining the forecast data with other relevant information and the opinions of experts and stakeholders, the process provides a more detailed analysis than would be provided by the forecasts alone.

The outputs of these exercises are in the form of five to six annual in-depth reports on individual sectors. The OSKA Coordination Council chooses which sectors are to be analysed each year, with the goal being that each sector will go through one in-depth examination every five years on average.[vi] In addition, the cooperative structure of the system is also intended to ensure that there is a constant flow of information from each sector to stakeholders, policymakers, and society.

As part of the OSKA system, in addition to the in-depth sector reports, an overview report is published annually (the first was published early in 2017).[vii] This report comments on the state of the labour market and anticipated changes over the next ten years, as well as the most substantial changes in skill requirements, based on the quantitative skills forecast and the OSKA sectoral reports. The most recent report is the 2019 edition, Estonian Labour Market Today and Tomorrow 2019-2027. It gives an overview of the Estonian labour market and the labour force demand and training requirements until 2027.

In addition to the annual reports, other occasional labour market reviews are published by OSKA, such as the Work and Skills 2025 (Töö ja Oskused) report, which provides information on, among other things, trends in the labour market and the qualifications that will be required by the future labour force.

Skills forecasts

Since 2003 the Ministry of Economic Affairs and Communications has conducted an annual skills forecast for the forthcoming seven to ten years.[viii] The time horizon has now been extended to ten years. This forecast includes around 40 sub-sectors within the national economy as well as five major occupational groups (which are further disaggregated into ISCO 4-digit level/detailed occupation level). Estimates of expansion and replacement demand for sectors and occupations are made as part of the forecast. Demographic and educational data are also used to forecast skills supply. The results also present the degree of skills mismatch in each sector by occupation.

The forecast is based primarily on statistical data collected by Statistics Estonia and, prior to finalisation of the forecast, the Ministry has occasionally offered stakeholders the opportunity to comment on the results.

The Ministry of Economic Affairs and Communications has acknowledged the limitations of the forecast. It is based on the current employment structure, does not take into account vacancies, and is not able to capture the reallocation of employees between economic sectors. The forecast also does not provide information about the skills requirements within specific occupations. With the introduction of OSKA, sectoral forecasts are adjusted based on the sectoral analysis it provides. For instance, estimates of the overall labour demand were significantly increased for the most recent forecast based on the results of the five sectors analysed by OSKA. There is scope for more information to be eventually incorporated, as OSKA offers more insight about skills needed today and in the future, as well as about current mismatches. The involvement of stakeholders in the adjustment of the forecasts is also expected to increase their accuracy.

Similarly, the forecasts are carried out at the national level; simplified calculations of regional projections are sent to relevant institutions but are not made publicly available. This limits the use of forecast results in local-level planning.

As part of its pan-European forecasting activities, Cedefop produces skills forecast for Estonia.

Skills foresight

There do not appear to be any systematic or regular skills foresight exercises in Estonia. Over the years a number of sector-specific studies and analyses have been commissioned by various organisations on an ad hoc basis. For example, the projects ‘Forecast of Labour Force Needs in the Estonian Energy Sector’ (2011), ‘Sector Research of the Estonian Machinery Industry’ (2011) and ‘Sector Research of the Estonian Wood and Forest Industry’ (2013) were all commissioned by Enterprise Estonia. The Estonian Development Fund has also provided several analyses of specific growth sectors (for example, ICT,  the creative industry, etc.).           

Other skills anticipation practices

Since 2016 the Estonian Unemployment Insurance Fund (Eesti Töötukassa) published an ‘Occupational Barometer’.[ix] The barometer assesses short-term, general trends in the labour market by occupation using a method of forecasting based on employers’ perspectives. Two indicators are taken into consideration: i) how employers’ demand for labour will change over the next 12 months, especially the demand for specific occupations; and ii) based on the assessment of the first indicator, whether there will be a labour surplus or shortage in occupations after these 12 months. The assessment of the indicators and the resulting estimates which are fed into the Occupational Barometer are developed by the regional departments of the Estonian Unemployment Insurance Fund, with the involvement of external experts as required.

Dissemination and use

Use of skills anticipation in policy

Before the introduction of OSKA, forecasts of future employment demand were mainly used by the Ministry of Education and Research to plan the national curriculum and determine the types of state-funded vocational education programmes to be offered. With regard to other policymakers, dissemination has been limited. The forecasts have been published on the web page of the Ministry of Economic Affairs and Communications; however, the annual forecasts, for instance, are usually published on an ad hoc basis and not in a structured way. OSKA publishes an annual, detailed report (see subsection 2.1). Therefore, OSKA improves the dissemination and increase the use of its data and analyses among policymakers and stakeholders.

The Estonian Qualifications Authority also cooperates with stakeholders to share relevant information from the OSKA forecasts. So far, a successful partnership has been established with the Public Employment Service, which will use OSKA results in the design of active labour market policies.

Target groups’ uses of skills anticipation outputs

The intended end-users of the skills anticipation outputs are employers and individuals looking to select a career or enter educational or vocational training programmes. Through representation within OSKA’s system of sector skills councils, employers should now be able to more easily access the data generated by the skills anticipation activity. The most likely use of the information among employers will be to pursue developments within their own sectors as well as the national labour market. Individuals usually make use of the system’s outputs through intermediaries such as student counsellors/careers advisers. The information can be used to enhance the advice provided by these intermediaries and to help them guide individuals towards appropriate programmes or qualifications.

Please cite this document as: Cedefop.(2022). Skills anticipation in Estonia. Skills intelligence: data insights. URL [accessed DATE]

Bibliography

The following sources have been drawn upon in preparing this report.

• Cedefop. (2019). 2018 Skill forecast in Estonia.
• Cedefop. (2020a). Strengthening skills anticipation and matching in Estonia: capitalising on OSKA’s potential to realise national ambitions. Luxembourg: Publications Office of the European Union.
• Cedefop. (2020b). Developments in vocational education and training policy in 2015-19: Estonia. Cedefop monitoring and analysis of VET policies.
• EEPO. (2015). Country Fiches on Skills Governance in the Member States – Estonia. Developed by the European Employment Policy Observatory for the European Commission. Brussels: European Commission.
• Empirica. (2014). e-Skills in Europe: Estonia Country Report.
• Enterprise Estonia
• Estonian Qualifications Authority
• European Commission. (2019). European Centre of Expertise (ECE) in the field of labour law, employment and labour market policies. Labour Market Policy Thematic Review 2019: Skills imbalances. Estonia
• European Commission/ CEDEFOP/ ICF International/. (2014). European Inventory on Validation of Non-Formal and Informal Learning 2014: Country Report Estonia. Brussels: European Commission.
• ILO/Cedefop/OECD/ETF/. (2017). Skill needs anticipation: Systems and approaches. Analysis of stakeholder survey on skill needs assessment and anticipation.
• Johnson, M. (2019). European inventory on validation of non-formal and informal learning 2018 update: Estonia
• Ministry of Economic Affairs and Communications
• __ Tööjõuvajaduse ja -pakkumise prognoos aastani 2024.
• Ministry of Education and Research
• __ Estonian Lifelong Learning Strategy 2020. and https://www.haridusfoorum.ee/images/haridusstrateegia/Eesti_elukestva_oppe_strateegia_loplik.pdf
• Ministry of Finance
• Ministry of Social Affairs
• Nurmela, K. (2011). Social Partnership for Anticipating Change in the Labour Market: National Paper Estonia. Talinn: Praxis.
• OSKA
• __, Rosenblad, Y., Randma, T., Leemat, A., Leoma, R., Mets, U., Sõmer, K., Kitt, E., Aarna, O., Kerem, M-K., Järve, J., Pihor, K. (2016). ‘Tööturu koolitusvajaduse seire- ja prognoosimetoodika’.
• __ (2018). Estonian Labour Market Today and Tomorrow 2018.
• Riigi Teataja. (2015). Professions Act.
• Sihtasutus Kutsekoda. (2016). Töö ja oskused 2025.
• Silla, E., Aarna, O., Orion, K., Haller, A., Murasov, M., Reinhold, M. (2014). Estonia: VET in Europe – Country Report 2014. CEDEFOP REFERNET.
• Statistics Estonia
• Unt, M. (2016). Skills Forecasting in Estonia: A Shift Towards Policy Driven Approach.

Endnotes