Skills supply and demand - ex
Skills supply and demand
Countries around the world are increasingly realising the importance of showing foresight in the policy-making of different issues. Fast technological change and increased global uncertainties call for different emphasis within the educational system as well as within the employment and labour market systems so countries can increase their competitiveness and improve living standards. In this skill forecast, an attempt is made to predict the number of individuals by each field of study, level of education attainment and industry sections, in addition to the number of vacant jobs by industry sections until the year 2035.
Forecasts are made for 10 fields of education, 4 levels of education and 10 sections of industries until the year 2035. These forecasts are based on data on the highest level of education attainment of individuals, the number of individuals by industry sections and number of vacant jobs as well as the total Icelandic population and population forecasts. Education according to the ÍSNÁM2008 classification system is divided into ten categories of education: Pre-primary level of education (0), Education (1), Humanities and arts (2), Social sciences, business and law (3), Sciences (4), Engineering, manufacturing and construction (5), Agriculture (6), Health and Welfare (7), Services (8) and Unspecified (9). Education according to the ÍSMENNT2011 classification system is divided into four levels of educational attainments: Basic education (levels 1-2), Upper secondary education (levels 30, 36, 37, 40, 43 and 44), Vocational training (levels 31, 32, 33, 34, 35, 41 and 42) and Tertiary education (level 5 8). Industries according to the Icelandic Industry Classification - ÍSAT2008 are divided into ten industries: Agriculture, hunting and forestry (A), Manufacturing, mining and quarrying and other industry (B-E), Construction (F), Wholesale and retail trade, transportation and storage, accommodation and food service activities (G-I), Information and communication (J), Financial and insurance activities (K), Real estate activities (L), Professional, scientific, technical, administration and support service activities (M-N), Public administration, defense, education, human health and social work activities (O-Q) and Arts, entertainment and recreation; other service activities; activities of household and extra-territorial organizations and bodies (R-U).
An attempt is made to predict the number of individuals within each field of education, level of education attainment and industry section, as well as the projected number of vacancies within each industry section, until the year 2035.
Skills supply and demand in Iceland 2021-2035
Updated: 15 December 2021
Statistics Iceland's 2021 skills forecast publishes forecasts of labour supply and demand until 2035. The results are shown for 10 fields of study, 4 levels of education attainment and 10 industry sections. A linear trend of previous years is estimated and extrapolated to the year 2035. The forecasts are based on the assumption that education, employment and the labour market in Iceland will remain largely unchanged during the forecast period, as the linear trend of previous years is used for projections. Also, it is necessary to emphasize that this is the first edition of Statistics Iceland's skills forecast, but an annual update of the skills forecast is anticipated.
During the period 2017-2035, the population, aged 16-74 years, is expected to increase by 36 thousand, which corresponds to an 19% increase. The figure below shows that the largest relative increase compared with 2017 is expected among those working in financial and insurance activities (ÍSAT2008 category K) and those working in professional, scientific, technical, administration and support service activities (ÍSAT2008 categories M-N) of 99% (5,700 individuals) and 53% (9,500 individuals), respectively. The most decrease is forecasted to be among those working in agriculture, hunting and forestry (ÍSAT2008 category A) or about 61% (4,000 individuals). It is important to emphasize that the calculations of the number of employees by industry section takes into account the impact of the fourth industrial revolution on industries according to the Prime Minister's Office report from 2019, which assumes a decrease due to automation in ÍSAT2008 categories A, C, F, G, H, I, N, P, Q and R.
During the forecast period, job vacancies will decline in all industry sections except professional, scientific, technical, administration and support service activities (ÍSAT2008 categories M-N) where the number of vacancies is forecasted to remain virtually unchanged until 2035.
The level of educational attainment in Iceland has risen over recent years. This trend is expected to continue throughout the forecasted period, as can be seen in the figure below. Compared with 2017, the proportion of people with a tertiary education, aged 16-74, is expected to increase from 30% to 44% (48,000 individuals) in 2035. It is also expected that the proportion of people only with a basic education will decrease by 12% (24,600 individuals) during the same period. It can be assumed that this is e.g. because employers are increasingly requiring at least upper secondary education and since more people with upper secondary education are replacing those with basic education as the highest level of education.
It is estimated that the number of people with further education (other than ÍSNÁM2008 field 0, general education) will increase significantly during the forecasted period except those educated in agriculture (ÍSNÁM2008 field 6) or services (ÍSNÁM2008 field 8). As can be seen in the figure below, it is forecasted that the largest proportional increase will be among those educated in science (ÍSNÁM2008 field 4) or a 59% increase (4,000 individuals). This increase in most fields of education could be attributed to an increased population during the period as well as an increased demand for higher education in the Icelandic society.
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