Joan Ramon Rosés Primo Piano Morning Future
Guiding Interview 28 June Jun 2019 0800 28 June 2019

Less politics and less inequality: the European challenges to create better jobs

Joan R. Rosés (London School of Economics and Political Science): “Digital economy and technological innovation are concentrated in a few areas. This is the problem we need to solve”

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“We are experiencing a period of transition, just like during the industrial revolution: we are not creating new jobs to replace the old ones and the problem is that this transition is much more difficult, because it is a matter of moving from a typically industrial job to a new model in highly specialized sectors, such as digital and technology, which require a high level of education”, explains Joan Ramón Rosés, director of the economic history department at the London School of Economics and Political Science. Rosés addresses the issue of territorial inequalities, no longer due, as in the past, to the gap between rich industrialized regions and agricultural regions, but to the presence of new work sectors, concentrated in very few places in the world. Associate Professor of Economic History at the Charles III University of Madrid from 2000 to 2013, Rosés talks about the future challenges of society concerning the creation of new job opportunities, the new frontiers of education, the need for new training for people around 50 years to reintegrate them into the new job market, and the skills we will need to succeed in the future.

Joan Ramón Rosés

What measures can the state take to create new jobs?
I think we are in a process of transition, like during the industrial revolution, during which those who involved in the old jobs were losing them and not moving towards new ones. Today we’re going to need 30-40 years to create new jobs. I'll give you an example: Sweden had a huge crisis in the 1840s in the boot industry in the south of the country. The crisis happened because the products were too expensive for the international market, so the Swedish government gave funding to all these people to go to live in the south and study one or two years to get a new job. But in this case it was easy, because it was a transition from a semi-specialized job to a similar one, like a job in a factory or in the field of hospitality. Now the problem is that the transition is much more arduous, because it entails moving from a typically industrial job to a new one, in the highly specialized digital and tech sectors, which require a high level of education. In this system, where new jobs are not for everyone, you cannot train 50-year-olds to do absolutely different jobs.

What can the government do?
Usually the training is only for young people or is "education for life": for example for researchers and academics, not for people over 50, for whom changing jobs is difficult unless they are highly qualified. The problem therefore arises with people who have a profession that has become obsolete. For example, in the US there are 2 million truck drivers. In 10 years’ time trucks will be self-driven. How is it possible to educate 2 million people to do a new job, which probably involves computer skills and new skills, when their only profession is to drive? Furthermore, many professions are disappearing. We are losing mid-level jobs, which are paid rather well and carried out by middle class people. We are not talking about low paid jobs.

So which are the models to keep an eye on?

The Spanish give great importance to being prepared in a given subject while in England we are much more focused on giving people the skills to learn. In Spain, for example, if you want to become a lawyer, you must study law for 4 years, after which that area coincides with your professional life. You are a lawyer, but you are not very flexible. In England those who study economic history do it because they really like the subject, and the curriculum lasts three years, it’s very flexible. Then you can choose a master's degree of 1 or 2 years and become a lawyer. If you get tired of the law you can choose another master and change jobs. So in England we train people to be independent, to be able to write really well, and have the ability to carry out research. The Anglo-Saxon approach is different from the continental one. The United States has a flexible system like England. We need to be much more flexible, not focused on just one subject, but focus on being able to have a general knowledge.

What is the role of companies in promoting employment?
In Spain companies are very different from those of the UK, which invest in the training of people. I think that companies should invest in their workers and that many don’t do it because they are very small, but they need to understand how important it is, because it is difficult to get exactly what they want on the market. For example, in Spain companies put up job advertisements in newspapers, such as: “We want a specialized engineer who speaks 6 languages”. Then they complain that they cannot find the professional figure. This system is not efficient. We need to invest in people.

What is Europe’s role as a facilitator of good legislation for the creation of new jobs?

Due to globalization, the economy has concentrated in a few areas of the world and the problem is that Europe as an institution is not acting in the face of this problem. We see big cities like Paris and London that are growing very fast and other places that are collapsing. The European political arena is not cooperating because it tries to save the crisis hit cities, and does not create a real policy to evaluate how to improve things. I think politics have failed for many years. We have spent too much on agricultural production when there are few people working in the countryside; we have spent too much to keep people in areas where they have no jobs, and both Europe and individual countries have spent too little to promote better education. European politics have the issue of mediating with national governments. It’s not clear what European governments, institutions and the European Commission want. If people in Europe spend European funding badly, what's the point of giving it to them? For example, in Spain we build lots of highways and railway stations. I do not think that this should be done with European funds, and I believe that in general the EU is not able to act outside national decisions.

How can the trend be reversed?
The only way to fill regional inequalities is to have much more integration. There must be the same income tax for everyone in Europe, the same indirect taxes for everyone and a European economic government. And this is a serious problem, because otherwise we will never be able to sort out critical issues.

What are the main causes of regional inequalities?

In the past, inequalities were due to the gap between rich industrialized regions and agricultural regions. If you became industrialized you became rich. Now there is no longer this gap, but the presence of new highly specialized sectors, such as the digital and tech sector, concentrated only in very few places in the world. Finance is globalized, the people who deal with finance live in London because it is the financial center of the world, and obviously all this produces very many inequalities. As far as Europe is concerned, the new problem is that there are few places that produce a great deal of income and that are increasingly growing. There are no longer many industrialized regions, but few successful geographical areas, around which many poor people often live. In London there is a great concentration of rich people, who owe their wealth to the fact that they work in the new, highly specialized sectors. The Guardian reports that 60.000 people earn more than 150.000 pounds a year in Britain, of which 47.000 live in London and 6.000 even live in one district of the English capital, Kensington. So 10% of the richest people in London live in one neighborhood. London has a high percentage of incredibly rich areas but also incredibly poor areas.

In your opinion, how should the European educational system change?
I think it is very important to have a network outside the government, and to have a system that is much more independent and local. The best way to have very good universities is not to depend on the state, but to give them a lot of independence to give them the ability to make decisions. It’s a much more centralized system. The London School of Economics is a global elite, and is a charity. All the money we make is invested in the university or in scholarships and our job is to improve society. That's where we invest our money, and we don't need the government to do it. In England and Sweden there are many things that are not done by the government. In England, for example, there is a day when we clean the countryside, as they do in Italy. There are many charities in the country. It's society that organizes things; there is no need for the government for everything. In schools there are several hours per year when children work in charities. Historic buildings are sheltered by the UK national lottery, which is a charity, and it is possible to become a member of the national trust. Despite the participation of the people, English society has various problems, because there are many social differences, and because the transition to the new model is difficult.

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