11 DEC 2023
Data insights

Skills anticipation in Iceland (2023)

Summary

Overview of the Icelandic approach

Systematic forecasts of jobs and skills across the entire labour market are new to Iceland. In 2021, Statistics Iceland presented the first forecast of future skills demand in the Icelandic economy to 2035. Disaggregated results are provided by 10 areas of education, four levels of education, and 10 sectors. The forecasting methods are simple. For the most part, it is assumed that the developments of the past decades will continue at the same pace. For some sectors, a linear trend based on previous years is used to predict the number of employees. The forecast is presented as experimental statistics on the webpage of Statistics Iceland. A second edition of the forecast, using more sophisticated methods, was planned to run in late 2023.

Stakeholders, such as representatives of labour organisations, were involved in making the first edition of the skills forecast. For the second edition, consultation with stakeholders is more informal. The aim is for the second edition of the forecast to be more widely publicised than the first one. It is expected that it will probably be more useful for young people choosing a course of study, since it will be based on more sophisticated methods than the first one and so offer more concrete results.

There is a shortage of information about skills demand that can help young students and those who determine the availability of study programmes[i]. For instance, detailed information on current income and unemployment, classified by type of education (carpenter, lawyer, doctor etc.) is not available. This information would indicate the types of training currently in need and thus guide young people who are about to choose a course of study.

Description

Skills anticipation is still in its initial state in Iceland. Until recently there were only studies on skill needs on sectors, such as the health sector, or different parts of the country. In 2016 representatives from, among others, the Directorate of Labour, the Confederation of Employers and the Confederation of Labour sought advice from Cedefop on how to adopt a skills anticipation system in line with that undertaken in other European countries. Among Cedefop’s recommendations were:

  • The current situation on the Icelandic labour market in terms of supply and demand needed to be described. That was covered, at least in part, by a report published in 2018 (Sigurður Björnsson, 2018).
  • Ideas should be developed in cooperation with labour market organisations.
  • The process of creating a skills anticipation system should start as soon as possible.

In 2018 a group of experts made up of representatives from Statistics Iceland, the Directorate of Labour, the Confederation of Employers and the Icelandic Confederation of Labour put forward proposals on initiating a systematic skills anticipation approach (Anton Örn Karlsson et. al., 2018). Following this, Statistics Iceland received funding to work on the project.

The first forecast, for the period up to 2035, was published in 2021 (Statistics Iceland, 2021). It reports on the outlook for 10 fields of education, four levels of education, and 10 sectors. The forecast is presented as experimental statistics on the Statistics Iceland website. The first version of the forecast was relatively simple and it did not go through a thorough review process. Statistics Iceland aimed at working on a new edition of the forecasts in 2023, based on the experience of the first edition and the needs of users. Furthermore, the method of communication of results will be revised to increase users’ accessibility.

Aims

The aim of the forecast, as well as of the overall efforts to develop a more systematic skills anticipation approach is to lead to results that could be widely used for policymaking in the education system and policy action in many additional areas. Skills intelligence stemming from skills anticipation will need to support individuals make personal choices on education and employment choices.

Legal framework

There is no regulatory framework for skills anticipation activities in the country.

Governance

The director of Statistics Iceland in cooperation with the Ministry of Social Affairs, which currently finances the project, lead the skills forecast.

The working group that initiated the programme of skills anticipation - with representatives from labour market organisations, the Directorate of Labour and others - was very much involved in the making of the first, experimental skills forecast. In the preparation for the second edition the consultation has been more informal. A consultation meeting with representatives of labour organisations and other potential users was planned for late 2023, before the second edition of the skills forecast results is published.

Target groups

The committee that initiated the Icelandic skills anticipation project mentions three target groups. Those are governmental agencies, young people who are choosing a course of study, and those who plan the education system (Anton Karlsson et. al. 2018, p.10).

The first edition of the skills anticipation forecast, with a time horizon up to 2035, was only preliminary, and it is unclear who benefits from it. The second edition, expected in late 2023, will be more elaborate than the first one. It will be better publicised and will potentially be of more use to students, those employed, and policy makers.

Funding and resources

The first edition of the skills anticipation forecast was financed by three ministries: The Prime Ministry, the Ministry of Education and the Ministry of Social Affairs. It was wholly financed by the Ministry of Social Affairs.

Methods and tools

As mentioned earlier, the assessment of skills needs in Iceland is at an early stage. Although Statistics Iceland has published a forecast on skill requirements for the next 15 years it is only an experimental edition.

Skills assessment

Statistics Iceland uses its educational database as a basis for their assessment. Its latest classification standard was published in 2017 (“Ísmennt2011, flokkun menntunarstöðu”). Statistics Iceland has a student register that goes back to 1975 and it has kept a register of students who have graduated from secondary schools and universities since 1995 (Statistics Iceland, website information).

Skills forecasts

The first, experimental forecast contains an estimate of the need for skills in the years 2021-2035. The forecast is rather simple methodologically wise. On the one hand it is expected that there will be a reduction in staff in certain sectors because of the fourth industrial revolution, bringing about, among other things, more automation. For other industries a linear trend of previous years is used for the projections (Statistics Iceland, 2021a). Some useful information is not used in making the forecast. For instance, the rapid ageing of the population is not used to analyse the need for trained staff in the health sector. The same can be said about forecasts on the need for teachers. The experimental edition is primarily intended as a basis for a more elaborate edition, planned for late 2023. All forecasting methods are under revision in preparation of the second edition.

Skills foresight

No information was identified on foresight studies having taken place in the country.

Other skills anticipation practices

For many years, the Central Bank of Iceland and the Confederation of Employers have requested Gallup to survey 400-500 firms about the outlook for employee hiring and firing over the coming six months. There are no questions, however, about the qualifications or skills of the labour needed.

Dissemination and use

The forecast has not received much publicity and finding it on the webpage of Statistics Iceland can be challenging. There is also lack of other information that could be helpful to planners and young people who are about to choose a course of study, such as information about salaries and wages paid to various educational groups, and the current employment situation for the same groups.

Use of skills anticipation in policy

The use of skills anticipation in policy has been limited in recent years primarily due to the lack of necessary information. It should also be reminded that the number of students admitted to the various study programmes are not defined by the central government.  

Target groups’ uses of skills anticipation outputs

There is no concrete information or evidence on the use of the first skills foresight results in policy making, individuals’ decisions or in any other way.

 

Please cite this document as:  Cedefop. (2023). Skills anticipation in Iceland. Skills intelligence: data insights. URL [accessed DATE]

Bibliography

Endnotes

[i] In general Iceland’s education system is highly decentralised, with most decisions made by individual schools (OECD, 2021, p. 34-35). At the University of Iceland, there are formal access restrictions in the studies of medicine, where the number of new students is limited to 60 per year, and physiotherapy, where 35 students are admitted each year, while there are more informal restrictions for other fields of study.