Across countries, tackling skill mismatch and skill shortages is a major challenge for labour market and training policies in the context of rapid and substantial changes in skill needs. In most countries, a substantial share of employers complain that they cannot find workers with the skills that their businesses require. At the same time, many college graduates face difficulties in finding job opportunities matching their qualifications.

Developing better skills and using them effectively in the labour market can play a major role in revamping stagnant productivity growth in Italy and promote a more inclusive labour market. To achieve this objective, however, Italy faces a number of important challenges.

The “Buona Scuola” reform has the potential to reshape the Italian education system by providing, through the Alternanza Scuola Lavoro (ASL), renewed incentives for education providers and the world of work to co-operate. Lack of trust and dialogue need to be addressed, however, to develop strategies leading to more relevant skills to reduce imbalances.

Increased globalisation and rapid technological change, but also demographic, migration and labour market developments, have altered considerably the structure of skill requirements in most countries in recent decades.

Skills assessment and anticipation (SAA) exercises are carried out in virtually all OECD countries but the approaches used can vary substantially. This chapter sketches the fundamental aspects of the Italian SAA system by discussing the involvement of its main actors and stakeholders in the creation and use of SAA information. The chapter reviews the co-operation ties across these stakeholders and the channels used to disseminate SAA information to policy makers and end-users.

This chapter provides novel evidence on the existence and degree of skills imbalances in Italy. To this purpose the chapter draws directly from the information contained in the new OECD Skills for Jobs Database. Imbalances in skills, abilities and knowledge types for Italy are analysed and their extent is compared to that observed in other countries for which information is available in the OECD Skills for Jobs Database. The chapter also explores how key technological trends are reshaping the demand for skills in Italy and how the information contained in the OECD Skills for Jobs Database can be used to provide guidance on the skills that are needed to fill current gaps in the labour market so as to increase skill matching.

This chapter discusses the reform of the Buona Scuola and other elements of the Italian education system with a view to understand how the reform is addressing the long-standing skills imbalances in Italy. The chapter discusses the renewed incentives spurred by the reform to create bridges between education providers and the world of work and how these can play a fundamental role in reducing skill mismatch and shortages. The chapter also discusses the responses that the Italian Government put forward to reinforce the alignment between the supply of skills and its demand in Italy more broadly. Bottlenecks and barriers to the implementation of the reform are also discussed with a view to provide recommendations on how Italy could fully reap the benefits of these recent policy efforts.

This chapter discusses the recent set of measures that goes under the name of Industria 4.0 and how this has the potential to boost the demand for skills in Italy by helping the country to transit to the use of new digital technologies and innovative production strategies. The chapter discusses how technical and soft skills will become increasingly important in the adoption of these new technologies. The chapter also discusses the importance of lifelong learning to ensure that workers of all ages are part of the digital revolution and contribute meaningfully to Italy’s growth.

This chapter discusses how elements of the recent labour market reform Jobs Act are providing renewed incentives for skill matching in Italy. The chapter discusses the way skill supply meets the demand in the Italian labour market and how this process can be strengthened to ensure that workers are employed in jobs that fully make use of their skills across the whole country. The chapter also discusses the recent introduction of the new National Agency for Active Labour Market Policies (ANPAL) and how this can play a key role in spurring skill matching in Italy. Bottleneck and challenges for the future are also discussed.