Abstract
New technologies and sector imbalances due to manufacturing hollowing out have dented the regional stock of competencies in the European Union (EU) labour markets. This raises concerns over the sustainability of the EU’s competitiveness in the longer term. The present study explore on what occupational mix might be able to deliver greater regional productivity in the light of emerging industrial dynamics. We estimate panel regression models using regional data from the EU Labour Force Survey and Eurostat regional statistics. Our results show that regional gross value added (GVA) is significantly improved if regions have a mix of occupations that includes what we define as smart workers: these are workers employed in advanced manufacturing and knowledge-based production-support activities. We also test interactions amongst production and production-support occupations as well as the nonlinear effect between smart workers and regional GVA. Policy implications are discussed.
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