Skill up: smart work, occupational mix and regional productivity

New technologies and sector imbalances due to manufacturing hollowing out have dented the regional stock of competencies in the EU labour markets. This raises concerns over the sustainability of the EU’s competitiveness in the longer term. The present study sheds light on what occupational mix might be able to deliver greater regional productivity in the light of emerging industrial dynamics. We estimate panel regression models using regional data from the EU Labour Force Survey and Eurostat regional statistics. Our results show that regional gross value added is significantly improved if regions have a mix of occupations that includes what we define as smart workers: these are workers employed in advanced manufacturing and knowledge-based production-support activities. We also test interactions amongst production and production-support occupations as well as the non-linear effect between smart workers and regional gross value added. Policy implications are discussed.