The Italian economy is currently undergoing a period of significant change, influenced by global megatrends and adverse shocks. Key megatrends include the digital transition, the green transition, and demographic changes. Digitalization is revolutionizing business models and production processes, while the green transition, driven by sustainability goals, is transforming sectors such as energy and transportation. Concurrently, an aging population is placing pressure on the labor market and welfare systems.
Complicating this scenario further are the adverse shocks that have impacted Italian and international economic activities over the past three years: the pandemic, the outbreak of the war in Ukraine, and the escalation of the Israeli-Palestinian conflict. These events have led to the worst recession since World War II, followed by a surge in inflation driven by the post-pandemic recovery and rising energy prices. This situation has prompted central banks to raise interest rates, thereby slowing economic growth consolidation and exerting additional pressure on businesses and workers.
The combination of all these factors is redefining the employment landscape, necessitating a strategic response to ensure real, sustainable, and inclusive growth.
Three Employment Scenarios
All these considerations are addressed in the comprehensive Excelsior Report “Forecasts of Employment and Professional Needs in Italy in the Medium Term (2024-2028),” prepared by Unioncamere in collaboration with the Ministry of Labor and Social Policies, which outlines employment forecasts for the coming years across three scenarios: positive, average, and negative. In the best-case scenario, the total employment demand is estimated to be around 3.6 million units, while in the worst-case scenario, it will be about 3.1 million units. This translates to an annual average forecast of 630,000-730,000 jobs.
The resources from the National Recovery and Resilience Plan (PNRR) will play a crucial role in this context. The PNRR aims to stimulate economic growth through investments in infrastructure, digitalization, and environmental sustainability, significantly contributing to job creation and thus increasing the “expansion demand,” which is the demand for new jobs generated by economic growth.
Conversely, the demographic challenge is becoming increasingly impactful on the Italian system. With an aging active population, the need for “replacement demand” is growing, which is the demand for workers needed to replace those retiring. This component is essential for maintaining labor market stability, especially in sectors like healthcare and education, where replacing retiring workers is critical. More generally, to better understand the pressure exerted by the demographic issue on employment needs, it is sufficient to consider that for the five-year period 2024-2028, the “replacement demand” will account for between 80% and 92%, depending on the scenario considered.
Digital and Green: Skills for the Present
At the beginning, we mentioned the megatrends most influencing global economies, directly leading to the skills increasingly required by today’s and tomorrow’s workers. We refer, of course, to digital and green skills, whose growing importance is reflected in medium-term estimates. Between 2024 and 2028, it is projected that digital skills will be required by over 2.1 million workers, representing more than 58% of the total demand in the positive scenario. Skills related to environmental sustainability, on the other hand, will be required to at least an intermediate level by over 2.3 million workers, nearly two-thirds of the total.
Particularly significant in the digital arena will be the impact of Artificial Intelligence (AI) on the labor market. Despite uncertainties related to the rapid evolution of this technology, AI is expected to profoundly transform many sectors. To confirm this, a study by the International Monetary Fund estimates that in the future, AI could affect nearly 40% of jobs globally, with a greater impact, up to 60%, in advanced economies. Specifically regarding Italy, the demand for AI-related skills is already increasing, although, using online job postings as a benchmark, there is a noticeable lag compared to other European countries such as Germany, Spain and France.
The Future: Challenges and Opportunities
From the data in the Excelsior Report “Forecasts of Employment and Professional Needs in Italy in the Medium Term (2024-2028),” both the significant challenges of our time and the opportunities they can generate in the labor market are evident.
It is crucial to invest in digital and green skills, promote innovation, and continue the transition toward more sustainable business models. Additionally, it is essential to develop active labor market policies that facilitate the matching of supply and demand, also to reduce the “mismatch” between the skills required by companies and those possessed by workers. Only in this way can Italy successfully face the challenges of our time and ensure an inclusive and dynamic labor market.
