Community Research and Development Information Service - CORDIS

H2020

CBTA Report Summary

Project ID: 712284

Periodic Reporting for period 1 - CBTA (Feasibility Study for the CBT Academy)

Reporting period: 2015-12-01 to 2016-05-31

Summary of the context and overall objectives of the project

THE DIGITAL REVOLUTION

According to the majority of Chief Technology Officers across the globe by 2020 all industries will be digitalized. This means that every business across every sector across every region will need to overcome the digital literacy gap of its own staff to avoid losing the “digital era´s train”.

In a nutshell, to cope with the ongoing “Digital Revolution” all companies need to start training today their staff in new concepts such as: The Device Mesh; Ambient User Experience; Information of Everything; Advanced Machine Learning; Autonomous Agents/Things; Adaptive Security Architecture; Advanced System Architecture; Mesh App and Service Architecture; Internet of Things Platforms.

If one believes such topics belong to science fiction scenarios or are just required in specific ICT companies, guess again as these are the new normal topics for all industries. In fact, these are just the top 10 strategic technology trends for 2016 described by one of the world's leading information technology research and advisory company.

The Digital Revolution imposes today that companies engage skilled talent, which already have such know-how ingrained in terms of hard skills (ICT savvy) and soft skills (good communication skills and mobile to work where projects are being implemented). But is there enough talent being trained in Europe to cope with market needs?

THE SKILLS´ SHORTAGE DRAMA

The answer to the previous question is: No. According to EC’s figures (Grand Coalition for Digital Jobs), there could be up to 825,000 unfilled vacancies for ICT professionals by 2020. According to this source: “Digital technology is transforming almost every aspect of our public, private or work life. For every individual - the worker, the learner, and the citizen - the natural consequence of technological innovation is the quest for new types of skills. Yet skills development does not come about as fast as technological development, which is why we are faced with a paradoxical situation: although millions of Europeans are currently without a job companies have a hard time finding skilled digital technology experts.”

According to McKinsey, the global shortage of skilled workers will reach 85m in 2020. Even more dramatic is the forecast that 94m persons will have their skills obsolete (!!!) when matching the new market´s needs.

As a summary, we can say that experts are forecasting that 85m will be vacant by 2020 while at the same time 94m persons will no longer fit the labor market due to having obsolete skills, which will promote a complex social situation across the old continent. Such forecast collides against the EC's 2020 targets specifically concerning employment where the goal is to have 75% of the 20-64 years-old to be employed until 2020. How did Europeans, and Humans in general, get into such an explosive social situation?

THE GENESIS OF THE PROBLEM AND HOW CBT WANTS TO BE PART OF THE SOLUTION

More than twenty years working hard to improve the world of work across more than 50 different labor markets – the founder of Cross Border Talents Group* and his shareholder and business mentor** (who is one of the world´s top experts in recruitment), when analyzing the recruitment needs of CBT´s global customers seeking hard-to-find profiles to work on their vast operations across five continents - more than 15,000 ICT open job vacancies only in the first quarter of April 2016 - realized that two common skills were in demand across corporate organizations as well as SMEs and Startups: Software Engineers (Profile A) and ICT Programmers (Profile B).

CBT also observed that while the global market has been increasingly desperate for recruiting tech talent that is able to interact with customers in order to understand their business needs (Profiles A and B) less students have been applying for STEM disciplines (science, technology, engineering and mathematics) scoring only 13% of all applications for European universities in 2014. The main reasons for such decline is connected with how generation Millennial find such courses: “boring and hard to accomplish” Therefore a combination of less technical professionals graduating annually over the last decade and an increasing demand for hard skills connected to logical thinking lead the global labor market to the paradox of available jobs keep on growing as well as the unemployed number of European citizens.

When confronting CBT´s customers’ needs for Profile A with existing talent graduating in European universities, CBT concluded that universities need more than double the number of annually graduates to keep up with the new digital era market skills´ requirements. Moreover when confronting the skills requested by customers with talent working nowadays in such job positions, CBT concludes that while companies have a great need for engineers (Profile A) a great part of these needs can be fulfilled with technical staff who can code and interact with customers (Profile B). Such profile combines “logical thinking competencies” that enables the candidate to learn how to code and “social competences” that enables him/her to work in a team at a customer's team environment.
Top companies are currently investing millions to train engineers with soft skills (to help the to socialize, to communicate, to share ideas, to work in a team) and such engineers already cost millions to be educated. Something smells fishy in the current education system and CBT is doing its best to improve it.

CBT also realized that in several geographies companies are not using the full capacity of extremely skilled engineers by having them coding and testing code (Profile A doing tasks of Profile B), which leads to demotivation, frustration and career blocked situations. By unleashing the potential of such professionals and enabling companies to invite engineers for more challenging projects having the possibility to employ other colleagues to fill these roles (new talent entering the ICT market as Profile B) this lead to the fulfillment of vacant jobs via a vocational training after high school graduation. This also enable skilled engineers to unleash their potential and develop their own startups, SMEs or continue to be corporate entrepreneurs adding more value to the value chain when new technicians take their role as ICT programmers.

Ricardo Nobre* has his academic background in Mechanical Engineering (IST, Lisbon) and holds a Master's degree in industrial production. He works since 2001 in the context of talent mobility and the in the world of work matters.
Ben Noteboom** served as the Chairman of the Executive Board and Chief Executive Officer of Randstad Holding NV from March 1, 2003 to February 28, 2014 and its Member of the Executive Board from 2001 to February 28, 2014.

If one assumes that 80% of the current 1mn unfilled job vacancies in Europe are connected to STEM profiles, we are convinced that 30% of those 80% (240,000 jobs) must be filled with highly educated engineers graduated from top universities (Profile A). Good luck for universities (and countries that host investment related to high skilled human capital) to inspire generation M and generation Z to pursue an engineer career that implies hard study and hard commitment. The remaining 70% (560,000 jobs) vacant can be filled – in our opinion - with people trained online in coding (Profile B).

As soon as the cause for the problem was identified by CBT, the solution was easy to be defined: in 2014, CBT planned to develop an Academy (new business model and activity) that strives to recruit, train and employ 500,000 ICT professionals by 2020, using the “Just in Time ICT Skills” methodology.

The main objective of this project is to refine and detail the Academy’s business model in order to define the plan that will enable a full-scale market entry of the Academy (concept to market-maturity).

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

For this project, CBT defined as the main objective to further develop the business idea and explore in detail several aspects regarding the business model to implement for the Academy:

- Define the characteristics of Demand for ICT skills in the EU and worldwide, focusing on the main markets and the skills most in need nowadays and in the future.

- Define, segment and describe the different people who may be interested and motivated to join the Academy as trainees and which the Academy will address.

- Describe how the business model of the Academy will function, how it has evolved from the current CBT Group’s business model, which is the revenue model and what are the resources needed for its operation.

- Define and estimate the critical economics of the business plan.

- Identify the main innovations of the Academy and compare them against the competition.

- Conclude if the business model is viable (or not) and define the next steps for the Academy’s business plan.

From this project, the Academy’s management team has concluded the following:

- There is a clearly identified and understood business opportunity, for which the existing solutions are not being able to answer (market failure) and which is growing in size and relevance;

- There is sizeable demand, which is receptive and interested in the Academy’s service;

- There is sizeable and sourceable supply, which CBT has identified and defined specific and disruptive strategies to reach it.;

- The business model defined is clear, realistic and complements / expands CBT’s value chain;

- The economics of the business show that this operation is profitable but implies a substantial initial investment (kick-off) for which CBT will need to find financing solutions;

- The Academy is innovative and has clear benefits when compared to other competing solutions;

- The recognition and declarations of interest trusted to the Academy’s project from various top experts, organizations and companies supports the idea to prepare, launch and grow the Academy throughout the EU.

For all the reasons stated above, CBT considers the Academy’s project is viable, has great potential and presents itself as a critical and strategic move for the company's future.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The main innovations of this business model are:

1. Focused at solving an existing market failure not only in the present but also anticipating the future needs and trends in tech industry.

2. People who graduate at Academy see their chances in the job market enhanced, due to the involvement of ICT companies throughout the process of recruitment. It’s a unique training course with a job “connected” at the end.

3. Integration of a larger extent of the employment value chain when compared to other players in the recruiting business.

4. The online formula for training will allow the Academy to supply skilled workers on a global scale.

5. The Academy is seen by public entities as an effective and accountable vehicle to promote employment and intelligent mobility and furthermore contribute to achieve Europa ´s 2020 strategy targets (topic employment).

The major impacts that the Academy is expected to generate are:

- Reduction of unemployment, especially among the youth and unemployed;

- Enhancement of the skill set of workers in the EU, focusing the ICT-related skills;

- Promotion of cross-border talent mobility, within the EU and with the rest of the world;

- Reduction of the time required and the cost for ICT firms to fill their vacant positions, especially those requiring medium-to-high technical skills;

- Development of an enhanced sustainable network/consortium for promoting and supporting the operation

Related information

Record Number: 190261 / Last updated on: 2016-11-14
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