For years, European arguments about competitiveness ran through a familiar set of topics: energy prices, regulatory burden, fiscal space, access to capital. The assumption was that if electricity became cheaper, permitting faster and industrial subsidies more flexible, investment would return and growth would follow. That story is no longer sufficient. When more than half of firms surveyed by the European Investment Bank say that the main constraint on investment is the lack of workers with the right skills rather than energy prices or red tape, the structure of the problem changes. Human capital moves from the social policy chapter into the core of Europe’s strategic debate.
The clean industrial turn that Brussels now proclaims through the Green Deal, the Net Zero Industry Act and a still forming Clean Industrial Deal rests on a concrete assumption: Europe will be able to build, install and operate the technologies it wants to subsidize. That requires grid technicians and heat pump installers, battery engineers and electrolyser specialists, coders and cyber staff for digitalised systems, project managers for offshore wind, and teachers capable of preparing the next generation for all of the above. If these people do not exist in sufficient numbers, the vocabulary of sovereignty, de-risking and resilience covers a much thinner reality. Industrial policy becomes a catalogue of intentions that others may end up executing.
Recent work on the strategic dimension of skills has tried to describe this problem with some precision. Detailed modelling of clean-technology job creation and fossil-fuel job losses shows a Europe that is about to move millions of people across value chains in less than two decades, with Central and Eastern Europe facing the sharpest combination of industrial upheaval and weak training systems. In parallel, Mario Draghi’s report on European competitiveness has framed the issue in macroeconomic terms: in a world where capital, technology and regulation are mobile, the knowledge and skills embodied in the labour force weigh more heavily than relative labour costs. That diagnosis sits uneasily with an EU that spends less on education than some peers, that has seen its basic skills performance decline in international tests and that is ageing rapidly.
The Commission’s Union of Skills communication, published in early 2025, represents an attempt to bring these strands together. Its core assumption is direct. Europe will not be able to keep pace with the United States and China in clean technologies, artificial intelligence or defence unless it rebuilds its own skills base and attracts talent from abroad. That in turn implies a deep reordering of priorities in education systems, labour-market policies, regional development and migration. A serious reading of Europe’s clean industrial ambitions now has to track what happens in these fields as closely as it follows carbon prices or state aid rules.
What follows is an attempt to take that logic seriously: to treat skills as a central variable in Europe’s power rather than a residual concern, and to test whether the current trajectory is enough to prevent a skills shock from derailing the clean industrial deal in the 2030s.
A competitive squeeze shaped by people, not tariffs
Europe’s position in the global economy is now described through a simple comparison. The European Union has moved through a decade of stagnating or weak growth, while the United States has expanded more rapidly and China has combined slower headline growth with sustained industrial build-out. Draghi’s argument is that Europe risks sliding into a middle position, richer than emerging economies but unable to generate the productivity gains needed to maintain its social model and strategic weight. The reasons he lists are familiar: chronic underinvestment, slow reform, a fragmented single market. Skills, however, cut across every part of that story.
At firm level, skills appear first as a direct investment constraint. Surveys of European companies show the availability of staff with appropriate skills ranking as a more serious obstacle to investment than energy costs, taxation or regulation. Manufacturing plants looking to electrify processes or introduce advanced automation report shortages of technicians who can run the new systems. Service firms trying to move into data-rich, higher-value segments struggle to hire people who can integrate software, cybersecurity and sector-specific knowledge. Subsidies and relaxed state aid rules cannot compensate for the absence of these profiles.
Skills also shape innovation performance. Draghi has underlined that business investment in intangibles, including research and development and human capital, explains long-run productivity growth more reliably than repeated subsidy rounds. European firms do invest heavily in intangibles, yet there is a persistent gap in breakthrough digital innovation. Part of that gap reflects differences in management skills, in the density of advanced digital competencies and in the capacity to combine technical expertise with commercial judgment. The result is an ecosystem that generates strong engineering but fewer dominant digital platforms or globally scaled clean-tech firms.
There is a third, explicitly geopolitical element. Energy transition jobs sit at the centre of today’s industrial competition. China controls large segments of the solar, battery and critical mineral chains and employs vast numbers along them. The United States has set out to build its own clean-tech workforce through the Inflation Reduction Act and related legislation, and is pulling investment and technology into that orbit. Europe risks a subordinate role as a final assembler of imported technologies if it cannot field its own technicians and engineers in sufficient numbers. Where European clean sectors have expanded rapidly, such as solar installation or segments of the battery value chain, job growth could evaporate quickly if manufacturing relocates or if investment hesitates.
Demography intensifies this squeeze. The Commission expects roughly one million adults to leave the EU labour market each year until mid-century as the population ages. In parallel, working-age populations in several emerging regions are still growing. Europe therefore combines labour shortages in critical sectors with pockets of youth unemployment in others. In principle, the gap could be narrowed through targeted migration and more intensive training. In practice, political systems often treat migration primarily as a cultural issue and skills policy as a national matter, even as firms complain that they cannot hire.
In such an environment, skills policy can no longer be delegated to education ministers. It sits within the same field as industrial strategy, climate policy, digital regulation and defence planning. A clean industrial deal that does not place skills at its centre is likely to produce paper sovereignty, import-dependent supply chains and a growing credibility gap between rhetoric and capacity.
The clean industrial deal viewed from the shop floor
The Net Zero Industry Act and the broader clean industrial agenda emerged from two shocks: the energy crisis that followed Russia’s full-scale invasion of Ukraine and the competitive jolt of the American Inflation Reduction Act. Their purpose is straightforward. Europe wants to retain or attract clean-tech manufacturing and deployment, keep high-value segments of the energy transition at home and prevent a repeat of solar’s earlier boom-and-bust pattern, where domestic deployment surged while production migrated to Asia.
The regulation sets a headline goal that at least 40 percent of annual deployment needs for key net-zero technologies should be met by EU manufacturing by 2030. It also foresees sectoral Net Zero Industry Academies that would train around 100 000 workers each on a three-year timescale. On first reading, these numbers appear large. Translated into sectoral employment trajectories and regional transition plans, they look much tighter.
Detailed modelling suggests that, under stable policy and with contained leakage, Europe could see around 4.8 million additional energy-transition jobs by 2030 in core clean-tech sectors. Over the same period and into the 2040 horizon, around 8 million workers in fossil-related activities, from coal and refineries to internal combustion engine supply chains, will require reskilling or upskilling. The spatial distribution of these shocks is uneven. Central and Eastern Europe, parts of southern Europe and several older industrial regions in the West face concentrated losses just as they are trying to attract new investment.
The tension is visible in concrete projects. Gigafactories in northern France, battery plants in Poland, heat-pump production lines in the Czech Republic and offshore wind projects in the North Sea repeatedly report difficulties in recruiting enough qualified staff. The European solar sector almost doubled its workforce within a short period after 2022, driven by accelerated rooftop deployment. Companies now warn that a move toward more automated utility-scale projects, combined with fragile manufacturing prospects, could flatten or reverse employment gains even before retraining systems are in place.
On the other side of the ledger, job losses in legacy industrial clusters are already under way. Trade union figures indicate that close to one million manufacturing jobs were lost between 2019 and 2023, with Central and Eastern Europe among the most affected. Coal regions in Poland, Czechia and Romania face earlier closures than official plans once assumed, as aging plants and market rules undermine profitability. Automotive regions in Slovakia or Hungary observe declining orders for internal-combustion components long before electric-vehicle ecosystems can replace them at scale.
At the heart of this process lies a skills problem that is more about adaptation than about starting from zero. Workers in fossil sectors bring technical discipline, experience of complex operations and often a strong safety culture. What they typically lack are specific competencies in new processes, including battery chemistry, high-voltage electronics, data management and digital monitoring. Retraining them is cheaper and socially less risky than leaving them behind. Yet the numbers are demanding. If the average cost of retraining for net-zero manufacturing jobs is in the range of several thousand euros per person, reskilling even half of the projected energy-transition workforce implies tens of billions of euros. That is comparable to some of the Union’s dedicated transition funds.
Actual disbursement has been slow. Only a limited share of Just Transition Fund resources had been spent by mid-2025. Administrative procedures explain part of the delay, but they do not explain the underlying ambiguity about priorities. Regional strategies often waver between using scarce money for physical infrastructure and allocating it to people. As long as skills feature as a secondary item in regional plans, Europe risks building clean projects that run short of a local workforce, forcing companies to import labour on a large scale and fuelling perceptions that the transition benefits outsiders more than local communities.
A narrow accounting of costs cannot resolve this dilemma. Without a funded and operational plan to reskill workers at scale, the promise of net job creation in the energy transition will remain fragile. The political backlash in regions that experience serial industrial closures without credible pathways into new sectors will grow. Skills policy has therefore shifted from a complementary measure to a precondition for the clean industrial deal to work.
The Union of Skills and the Net Zero Academies
The Union of Skills initiative is the Commission’s attempt to sketch a cohesive framework. It rests on four broad pillars: raising basic literacy, numeracy and digital skills; supporting reskilling for green and digital transitions; easing mobility and recognition of qualifications within the Union; and attracting and retaining talent from outside Europe. Human capital is treated as a shared strategic resource rather than a purely national concern.
The diagnosis behind this initiative is stark. Europe is sliding backwards on basic competences. International assessments show declines in mathematics and reading. A significant share of adults still struggles with basic literacy and numeracy, while roughly half of young and adult Europeans lack basic digital skills. Age structures intensify the problem in sectors central to the transition. In the electricity industry, more than a third of workers are already over 50, and incoming cohorts are too weak to offset retirements. Industrial careers remain unattractive to many graduates, and gender imbalances are persistent.
The Union of Skills text links these trends explicitly to social cohesion and security. Closures or restructuring in carbon-intensive sectors can misalign local labour markets for years and weaken trust in institutions. Regions that experience repeated plant closures and weak re-employment prospects become fertile ground for anti-system politics. In this sense, the skills agenda becomes part of the Union’s internal security debate. Stable jobs and credible training pathways are among the most effective antidotes to the narrative that climate and industrial policies amount to a technocratic project imposed on ordinary citizens.
From a strategic perspective, however, the Union of Skills is more a framework than an instrument. Brussels cannot legislate school curricula or directly manage national labour-market agencies. Those powers sit with member states and regions. The Union can supply analytical tools, coordination and partial finance. That is not trivial, but it risks adding yet another layer of programmes unless there is a clear centre of gravity.
The Net Zero Industry Academies are meant to provide such a focal point in clean-tech sectors. Under the Net Zero Industry Act, the Union pledges to create sector-specific academies that will train about 100 000 people each within three years, design curricula with industry and harmonise qualifications. The blueprint draws on early models such as the European Battery Academy and the nascent Solar Academy, which have trained tens of thousands of workers and created common standards for installers and technicians.
In practice, these academies are being organised through existing knowledge and innovation communities that bring together universities, training providers and firms. They receive EU grants for a limited period, after which they are expected to become financially self-sustaining. Their immediate value lies in their ability to broker between national education systems that move slowly and firms that know their skills needs in detail. They can create common micro-credentials, lift the status of vocational tracks and reduce confusion created by competing certificates of variable quality.
The strategic opportunity goes further. Academies can function as shared industrial training platforms that pool expensive infrastructure, shorten time to competence and give small and medium-sized enterprises access to facilities they could not build alone. In the grid sector, France’s RTE Campus Transfo replicates key elements of the transmission system at real scale and allows staff to rehearse incidents, while also serving as a testbed for new digital control systems. In the battery field, Verkor’s Ecole de la Batterie weaves together universities, technical institutes and company facilities to provide pathways from short courses to degrees and to train trainers for other regions.
If Net Zero Academies evolve into networks of such real-world platforms, they can reshape the landscape. A young technician from Romania or Portugal could train on state-of-the-art equipment in France or Germany with EU support and return home with recognised credentials. Firms in Slovakia or Greece could access training infrastructure that does not exist domestically. Reskilling programmes for fossil workers could plug into a European catalogue rather than improvising region by region.
The risk is that the academies remain small grant-funded projects with limited industrial buy-in. In that scenario, they would deliver workshops, reports and a thin layer of highly mobile professionals while leaving the mass of technicians and mid-level workers untouched. Avoiding that outcome requires choices. EU support should concentrate on a limited number of substantial platforms in each sector, tied to explicit training and placement targets, with over-representation of just-transition regions among trainees.
Nowhere is this more urgent than in the electricity grid sector. Grids sit at the intersection of electrification, digitalisation and resilience. They face an expansion and reinforcement effort without historical precedent on short timelines. Their skills needs range from high-voltage line workers and protection technicians to data engineers and cyber specialists. A dedicated Net Zero Grid Academy, anchored in existing centres of excellence and extended across borders, would form part of Europe’s critical infrastructure in everything but name.
The broader implication is that Net Zero Academies should be treated as strategic assets, akin to industrial clusters or research facilities. Training a new generation of grid operators, nuclear engineers or hydrogen specialists is as essential to Europe’s autonomy as building physical plants.
Member states, regions, firms and migration
Even with an active Union of Skills framework and functioning academies, most of the hard work will remain national and local. Education systems are financed by member states. Regional authorities manage key instruments for vocational training, regional development and just-transition spending. Companies decide whether to treat training as a central investment or a peripheral cost.
The spread in effort is substantial. On average, EU governments devote around 4 to 5 percent of GDP to education, with only a small fraction reserved for adult learning. Some states, such as Sweden, have sustained education spending above 7 percent of GDP and built dense adult-learning systems. Others have invested less and report weaker skills outcomes. The difference shows up in the attractiveness of industrial regions, in the ability to absorb clean investments and in the resilience of local labour markets.
Several governments have begun to treat skills for the energy transition as a strategic file. France has used a multiyear Skills Investment Plan and reforms of apprenticeships and public employment services to build capacity. Its energy and environment agency now models green-jobs trajectories for industrial projects. Regions such as Dunkirk have mapped the jobs and skills linked to planned battery and hydrogen investments and are using Just Transition and other funds to prepare their workforce accordingly.
Germany’s dual vocational system offers another reference point, with its structured combination of classroom learning and company apprenticeships anchored in real industrial environments. Adapted to clean-tech fields, such models can accelerate the formation of technicians able to move across sectors during their careers as technologies evolve.
Other cases illustrate what happens when labour shortages and migration anxieties pull in different directions. Hungary has expanded the use of guest workers to staff automotive and electronics plants, including new battery investments, while maintaining a strongly restrictive migration discourse. This has produced precarious conditions for foreign workers and tensions in local labour markets. Italy has combined tougher policies on irregular flows with more open channels for legal labour migration, issuing large numbers of work permits to offset demographic decline.
The strategic lessons are straightforward. Member states will have to raise investment in education and adult learning, especially in regions that will host major clean-industrial projects or face fossil closures. They need to institutionalise skills intelligence, through permanent observatories that track job creation and destruction in key sectors rather than sporadic consultancy studies. And they will need to align migration policy with labour-market realities, moving away from the assumption that all relevant skills can or should be cultivated within national borders.
Firms remain crucial actors in this picture. Large utilities and industrial companies already operate serious training ecosystems. The RTE Academy, Verkor’s battery school and Terra Academia are examples of how companies can create their own platforms, partner with universities and replicate best practices across borders. Public policy can recognise these efforts as part of Europe’s strategic capacity, by co-funding open training slots, integrating them into Net Zero Academies and counting their output toward Union of Skills objectives rather than treating them as isolated corporate initiatives.
The external dimension: talent and partnerships
While most European debates on skills remain inward-looking, the global context is now a decisive factor. Clean-energy employment is growing worldwide. China continues to dominate solar manufacturing, batteries and electric vehicles, and is increasing automation to manage its own demographic shift. Emerging economies hold key positions in critical raw materials, with mining workforces concentrated in Africa and Latin America, yet often lack the training systems needed to climb value chains.
For Europe, this creates both competition and opportunity. Chinese and American firms can draw on larger home markets for engineers and technicians and often offer higher salaries in shortage occupations, which makes it easier for them to attract global talent, including Europeans. At the same time, expanding working-age populations in parts of Africa and Asia offer potential for skills partnerships that could support both sides.
The Union of Skills communication acknowledges this by proposing an EU Talent Pool and Talent Partnerships with third countries. Combined with visas, recognition of qualifications and co-investment, these instruments could help Europe attract highly skilled workers while supporting partner countries in building their own capacities. The risk is a narrow approach in which Europe effectively skims a thin layer of qualified individuals from countries that need them as much as the Union does.
Avoiding that outcome will require designing partnerships that expand training capacity in partner countries, include provisions for circular migration and treat skills as a core element of wider energy and industrial cooperation. A battery or hydrogen partnership with a North African state, for example, should include co-funded training centres serving both European and local companies. Offshore wind and grid interconnection projects in the North Sea and the Mediterranean can host mixed crews of engineers and technicians who work across jurisdictions. Net Zero Academies could extend their reach to such joint platforms, making skills cooperation a normal part of Europe’s external energy and industrial policy.
Geopolitically, this matters beyond narrow labour-market considerations. In many parts of the Global South, Europe is competing with narratives that portray it as a declining and self-absorbed actor that preaches climate responsibility while hoarding value. Visible, long-term investment in people and careers provides a different signal.
Three paths to the mid-2030s
Looking toward the mid-2030s, Europe’s skills landscape in the clean industrial deal can evolve along several plausible lines. None of them is predetermined. Each depends on political choices that are being made now in Brussels, national capitals and regional administrations.
One trajectory is a slow-burn skills crunch. In this scenario, the Union of Skills remains largely declaratory, the Net Zero Academies train far fewer workers than announced and member states resist structural changes in education and migration. Clean-tech investments materialise in some sectors but are postponed or scaled back in others because firms cannot recruit. Wage inflation in shortage occupations coexists with stagnant incomes elsewhere and feeds resentment. Reskilling for fossil workers remains inconsistent, and regions that lose industries without clear alternatives become focal points for political anger. Europe still reduces emissions, but it does so mainly through demand reduction and imported technologies. Its clean industrial base remains thin, and dependence on American and Asian equipment and expertise deepens, including in critical parts of the energy system.
A second path could be described as patchwork resilience. Here, a group of member states takes the skills challenge seriously, raises education and adult-learning spending, integrates Net Zero Academies into their industrial ecosystems and uses migration strategically. Regions in the Nordics, parts of France, the Netherlands, Bavaria or a few central European clusters become magnets for clean investments because they offer both infrastructure and talent. Other regions lag, constrained by weak institutions, low education investment or restrictive migration politics. At EU level, the Union of Skills and clean-industrial instruments provide some coordination, but deep differences persist. Europe retains significant clean manufacturing and a strong services ecosystem. The map of opportunity, however, remains uneven, and gaps in basic skills and demography keep productivity growth modest.
The most favourable scenario would amount to a form of skills sovereignty within an open Europe. In this case, the next multiannual financial framework reserves clear and sizeable lines for skills and education, including an EU-level Skills Guarantee and expanded mobility for vocational training modelled on Erasmus. Net Zero Academies are confined to a limited set of high-impact sectors and are built as substantial industrial training platforms rather than small projects. Reskilling for just-transition regions is treated as a central mandate, not a marginal addition. Member states raise education and adult-learning budgets, upgrade vocational routes and include migration in competitiveness strategies rather than crisis communications. Outcomes are measured, reported and debated in ways that enable political accountability.
Under such conditions, Europe enters the mid-2030s with a workforce that is still ageing but better prepared, with more technicians and engineers in clean technologies, with stronger ties between universities and industry and with a more open talent regime. It may not close the gap with the United States or China across all indicators, but it would possess enough internal capability to make its clean industrial deal credible, sustain its energy transition and support its defence and security needs without excessive dependence on external providers.
Which of these paths prevails will be determined less by new slogans than by a set of practical decisions. Whether transition funds are spent primarily on concrete and steel or on people. Whether Net Zero Academies are pushed to function as hard training infrastructure or allowed to drift as bureaucratic shells. Whether member states reverse the decline in basic skills and invest in teachers and trainers. Whether migration is integrated into long-term labour-market planning or left to emergency politics.
The deeper issue is political time. Skills policy produces its most visible gains beyond the horizon of most electoral cycles, yet the costs of neglect emerge quickly in missed investments, discontented voters and eroding industrial capacity. If European leaders start treating skills as part of the Union’s security doctrine rather than as a soft adjunct to industrial policy, the clean industrial deal gains a foundation. If they do not, the skills constraint will remain the quiet variable that limits Europe’s ability to turn climate and industrial ambitions into durable power.
In a world where strength is measured not only in military assets, patents or subsidy volumes but in what citizens know and can do, Europe’s human capital strategy will go a long way toward deciding its geopolitical fate.
