S4S3 - Food processing

Countries involved: Moldova??

Why are some regions and countries better at stimulating competitiveness, productivity and economic growth?

One of the main goals of the European Union is to reduce disparities in the level of development between regions. And this is not happening. Within countries, some regions are growing faster than others. They have dynamic businesses and innovation clusters, and they develop and commercialise internationally significant products and services – while others do not.

Could other regions and countries replicate the same model and achieve the same result?

The EC believes that these approaches to economic growth and competitiveness are replicable – and developed an approach and a tool to support each region in identifying their own competitive advantages. They called the approach Smart Specialisation. Today, many countries beyond the EU have adopted smart specialisation in their national or regional development strategies.

Skills for Smart Specialisation

While smart specialisation is primarily about the economics of specialisation, VET and skills are the engine that drive smart specialisation. The reason why the ETF set out to develop a methodological approach, Skills for Smart specialisation, in 2019, is that regions and countries that have the right skills are able to certain things better. They are able to:

1. Produce more
2. Produce more complex products and services
3. Innovate and make new products or develop services that are not yet available
4. Industries are related through their skills. Industries that enter a region are often related to the region’s current industries. Vice versa is also true. Industries that exit a region, tend to be unrelated to other industries in the region. This is because industries are related through their skills.

These four points make human capital development of a region is a key determining factor for smart specialisation.

Moldova

This report (condensed summary or the full report) presents findings from an ongoing effort to assess the implications of skills development of Moldova's preliminary smart specialisation priority on food processing.

Overview of the food processing priority area

The agriculture and food processing sector accounts for 18% of GDP and 50% of total exports. The sector employs more than 30% of the labour force, of which 25% (80 700) are directly employed by agri-enterprises, while the other 75% (242 300) are classified as self-employed. Moldova is largely self-sufficient in terms of food production. The sector also supplies raw materials for other agriculturedependent sectors. However, to achieve stable growth in agri-food exports, there is a need to diversify exports and increase access to high value markets. Challenges include emigration and an ageing labour force; the lack of product testing units in industrial quantities; and limited exploitation of functional products by the private sector. Moldovan organic products are the exception. Seventy-five thousand tonnes of the country’s organic products are exported to the EU’s high value markets each year, making Moldova the region’s market leader.

Analysis of skills needs

The potential to diversify exports also exists with the Moldova’s small private farms. They produce a limited surplus of high value-added crops such as fruits, nuts, grapes, vegetables and potatoes. For the moment, they are mostly sold in open-air agricultural markets. Larger agricultural companies specialise in low value-added crops (such as cereals, oilseeds and sugar beet), and employ a limited labour force due to the high level of mechanised operations. SMEs are important to the food processing as well. To stay competitive, they need skills in the following areas: up-to-date pricing strategies, marketing, labelling, supply chain management, technology and operational innovations, such as packaging and sustainable processing.

Requirements in terms of skills for this sector are lower than in the energy sector. In 2018, 33% of those employed in this sector had a general secondary or a low level of education. Manual labourers are still in demand, especially during the growing season. SMEs identified a need for multi-skilled employees who work in an environment where processing, production and sales are integrated. The mechanisation, automation or computerisation of food processing operations require specific skills to operate, regulate and maintain these technologies. A high level of technical and ICT skills and mechatronic engineering are also necessary. Those at management level often have technical skills but lack economic knowledge and business management skills.

Based on the evidence, the following technical and generic skills and knowledge were identified as key to support growth and innovation in food processing:

■ advanced mechanical operations;

■ ability to operate and maintain machines;

■ extensive knowledge of safety-related issues;

■ environment-related issues related to sustainable plant design, waste reduction and water protection;

■ computation skills that may range from basic knowledge to operate technology to advanced programming skills to manage data or interface with consumers online;

■ communication skills, used in different contexts and with different interlocutors, such as employees, supply chain partners and clients; and

■ with increased exports, cultural awareness and language skills are also important.

These skill requirements in food processing can be met through formal education programmes as well as short-term workplace training. The programmes in the field of food processing are mainly provided by universities, colleges, centres of excellence and vocational schools. There are 14 VET programmes offered in the field of food processing. CVET in food processing is underexploited. As with other sectors, it is not provided systematically and systemically. Currently, all VET programmes in the field of food processing have set curricula, which are modular in design. However, the textbooks and other didactic materials are still to be elaborated and are lacking at the moment. In the absence of primary didactic sources, the quality of the teaching process is dependent on the quality and motivation of teachers.

Despite the wide range of education and training providers, there are not enough specialists to meet demand. Inadequate human resources practices, uncompetitive job offers, poor working conditions, low salaries and geographical barriers also contribute to this problem, which is especially relevant for SMEs. Furthermore, aspirations for EU membership have led to a series of market-oriented reforms that provide access to the EU single market and facilitate the export of goods. This has led to demand for new skills such as marketing and management, which are essential to understanding consumer needs, ensuring high-quality products and adapting to the requirements of different markets. The use of new technologies in the processing and preservation of food products is predicted to intensify as well, which will increase the demand for the requisite skills. Education and training for the organic food sector has also become necessary, along with background knowledge on environmental issues.