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Author's profile photo Markus Werling

Using technology to stimulate the labor market

Technology has transformed the way we bank, shop, manufacture, distribute goods, collect taxes, and manage security. But it hasn’t yet been applied  effectively to improve the labor market value chain. However, the technologies available today have the potential to reshape the antiquated labor market as we know it and help to overcome the massive challenges we are faced with:

  1. According to the EU by 2050 the
    population in the age between 25 and 40 in Europe will decrease 16% (EU
    Commission: Europe’s Demographic Future)
  2. Youth Unemployment has reached record
    highs of up to 50% in certain countries with increasing  pressure on low skill job profiles of all ages
  3. Average vacancy times for technical
    research & development staff in Germany 162 days, for software developers
    131 days according to the German Unemployment Agency (Engpassanalyse,
    Bundesagentur für Arbeit, 2013)

This is not a given! Thanks to technology innovations such as Big Data analytics & Predictive analytics, information locked away in siloed local and central government repositories, company databases and social sources can be integrated, exploited and turned into insight, to drive tighter collaboration between the private and public sector. It does allow to know your customers and their needs intimately and deliver the rights services, proposals to them through the channel (web, mobile, phone) they wish to consume it. Social media and job-matching algorithms can transform the identification and matching of candidates with roles to ensure a better fit for both employer and employee, resulting in greater stability of tenure and less economic wastage. And by combining instructor led, on-the-job and online training, blended learning solutions can accelerate knowledge transfer and the acquisition of skills to give organisations competitive advantage.

It’s recognised that small businesses are collectively a bigger employer than large enterprises, so owner-managers should be given the resources they need – access to markets, finance, coaching, productivity tools and skills – to be able to create jobs. In parallel, governments must also seriously consider reducing the red tape for growing businesses. By exempting them from, or scrapping, irrelevant standards, guidelines and regulations that hold them back, they can give entrepreneurs a better chance of not just setting up but staying in business for the long haul.


Lastly, governments can apply predictive analytics to better anticipate the demands of the labor market and identify specific skills shortfalls. This would enable them to develop education and labour policies accordingly to address these gaps, with decisions based on robust data rather than ideology. Only a truly joined-up government can harness citizens, the private sector and the education sector in policy-making to ensure nations cultivate the skills they need to increase employment and compete on the global stage.


This is exactly the ambition behind SAP’s platform for economic and social development. We have a keen interest in helping organisations become best-run businesses, and delivering on our mission to make urban environments work and improve liveability for all. But that won’t be achieved by automating every process – it’s about freeing up people to do what people do best: take the decisions that make a difference to the world at large. 

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