Editorial: Opening up the job market

Governments and their agencies around the world have long been the principal enemy of service sector growth. Examples abound, from the Kenya Film and Classification Board (KFCB) clamping down on VoD companies such as Netflix for hosting films it does not approve, to threats by India’s Telecom Regulatory Authority to impose controls on cloud computing to the needless impositions placed on lab testing in the US health system.

For the HR practitioner few regulatory systems are more problematic than the way occupational entry is controlled. Leading the way is undoubtedly Germany where over 150 “professions” are subject to strict rules – and 42 craft occupations require specific vocational qualifications before they may be practiced.

At a European Union level, around 47 million people require some kind of official authorization to perform their job and EU member states achieve this through over 6,000 regulations. Fortunately, after years of establishing rules about mutual recognition of qualifications (and latterly the prompting EU member states to undertake reviews of their professional regulatory systems) the European Commission is finally considering what more direct action could be taken to combat over-regulation. The outcome of consultations during the Summer have yet to be published, but it is likely that they shall be moving towards pan-European regulatory mechanism of the major professions such as lawyers, architects, accountants and medical practitioners. Resistance from current bodies will be fierce and it may therefore be necessary to superimpose institutions on top of the national structures.

It will require an entirely different approach to tackle the vocational entry qualification requirements for many trades. It has been calculated by Koumenta and Martins (QMUL) that deregulation of the “regulated professions” could generate 700,000 new jobs in Europe. But the deregulation of trades and the opening up of jobs such shop-keeping to those from other EU countries could revolutionise the services sector, and even overcome Germany’s problem about what to do with its new one million Syrian refugees.

Maybe what the employment world needs is a method pioneered in the UK financial sector. The “regulatory sandbox” approach allows new products and services to be launched without being punished by regulators. Safeguards exist, but are much more flexibly imposed. Such an approach will be more appropriate in countries such as Austria, the Czech Republic, France and Germany where qualifications are regarded as sacrosanct, even many years after they have been gained. Ironically, in the UK deregulation has been achieved in the legal profession without even going through the sandbox stage.

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