Lukas Kleine-Rueschkamp
Head of Unit – Local Employment and Skills, OECD
Patricia Peñalosa
Policy Analyst – Regional Labour Policy, OECD
The success of green, digital and demographic transitions depends not just on technology or goals, but on people and the places they live and work.
Recent OECD work shows that the places most at risk of job displacement due to automation or industrial change are often those least equipped to respond. This regional imbalance is not new, but it is becoming more urgent.
In some OECD regions, over 25% of jobs are at high risk of automation, while others face a surge in demand for green and digital skills, with insufficient training provision in place. Without targeted investment, these transitions could deepen divides. However, with the right policies, they offer a historic opportunity to boost both equity and productivity.
Place-based skills strategies are essential
Local labour markets vary dramatically in their structure, vulnerabilities and capacity to adapt. Yet, training policies are often designed at the national level. This mismatch weakens their impact.
The OECD’s Job Creation and Local Economic Development report highlights the growing need for place-sensitive upskilling and reskilling programmes. Regions facing industrial decline need tailored support to shift workers into new, sustainable industries. This means aligning training with local assets, from green manufacturing to rural health care to digital services.
France’s Plan d’Investissements dans les Compétences (PIC) channels EUR 15 billion into training low-skilled youth and the long-term unemployed. Half of this supports regional programmes tailored to local labour needs, with public-private partnerships supporting green transition roles.
Upskilling isn’t a silver bullet, but
it’s one of the few tools that can
boost productivity, reduce inequality
and support the green transition.
Early action reduces long-term costs
Industrial transitions take time, but delays are costly. OECD analysis shows that when training lags labour-market needs, regions risk long-term stagnation and skills shortages. By 2042, 72% of OECD regions could face tighter labour markets due to demographic shifts, underlining the urgency of early investment in vocational education and digital access.
Canada’s Future Skills Centre offers both national and regional programmes focused on digital skills, AI and the green transition. Its emphasis on early action and local tailoring offers a model for others.
From recovery to resilience
Delivering effective training requires coordination across governments, employers and education providers. Local skills councils, employer-led hubs and flexible funding models work best when regions have the capacity to act.
Upskilling isn’t a silver bullet, but it’s one of the few tools that can boost productivity, reduce inequality and support the green transition — if rooted in place and embedded in wider regional strategies.
