Demand factors: demography, economy and innovation

Labour migration is one possible response to shortfalls in labour supply relative to demand, as manifest in labour shortages and skill shortages. The chapter distinguishes between ‘labour shortage’ and ‘skill shortage’, problematising the latter given that both ‘skill’ and the term ‘shortage’ are ambiguous. This chapter outlines three key factors influencing the demand for labour: demography, economy and technological innovation. In the face of labour and skill shortages employers may adopt a range of strategies, with labour migration playing a part in some of them. Drawing particularly on a comparison of the UK, selected EU countries and Japan, the chapter highlights how immigration policy shapes the ease of, and possibilities for, labour migration to address labour and skill shortages.