Keywords

1 Introduction

At present, the European Union (EU) context faces several challenges, such as poverty, social exclusion, an aging population, environmental changes, unemployment and in particular, youth unemployment. With the emergence of new technologies and innovations, old jobs and the skills associated call for renewal, giving way to new jobs which require new skill sets across the board. Simultaneously universities produce an increasing number of graduates, who, after leaving the education system cannot find straight away a place in the labour market, notably cannot find jobs in their field of study or a job which they desire. On the other hand, many employers report that graduates are not well prepared to enter into the labour market.

Entrepreneurship has been considered as a key element to promote growth and competitiveness through employment, skills, innovation and technology. These are the key issues which will enable the EU to meet the targets set out in the Europe 2020 Strategy for Smart, Sustainable, and Inclusive Growth (European Commission 2010a). Education, namely Higher Education Institutions (HEI), have an important role to help students developing their entrepreneurial competences, fostering youth employability and, enhancing self-employment.

Considering these factors, it is necessary to gain knowledge about the existing gaps in what concerns the development of entrepreneurial skills among young people as a preliminary step for devising strategies to promote the development of entrepreneurial capabilities in a generalized manner, as well as to implement adequate assessment methods.

This chapter aims to share some insights that result from research work conducted under the project EU Youth: From theory to action—ActYouth EU that are relevant to this discussion. The research work conducted in this context was driven by the aim of contributing to foster the employability and innovative potential of young people, notably of young graduates by upgrading and developing their competences for entrepreneurship, entrepreneurial attitudes and other transversal competences necessary for them to enter the labour market successfully. ActYouth’s aim is, thus, to respond to the educational challenges of the higher education system in Europe and all members of the EU through the development of a system to diagnose, measure and develop such competences.

The project’s goals are aligned with the European vision of building smart, sustainable and inclusive growth, especially on the priority themes of Youth on the Move, A digital agenda for Europe and An Agenda for new skills and jobs, and also Entrepreneurship 2020 Action Plan (Xavier and Lannoo 2013).

The present chapter is organized into three sections that offer a contextualized description of the essential concepts that framed the work, after which some key results are presented. Therefore, a preliminary literature review is offered as an overview of the key elements that characterize the most important competences for youth employability used to frame and support the subsequent data collection with industry representatives and young graduates. At the end, this chapter provides a conclusion that lists the main key points arising from the literature review and data analysis that should be a framework for the definition of the competence profile, evidencing dimensions and indicators to fill gaps on this field of study.

1.1 On the Relevance of Entrepreneurial Competences in Contemporary Economies

The pace of technological innovation coupled with the increasingly strong demands from employers vis-a-vis students qualifications for entering the active life have been pushing universities to reframe their educational strategies and methods. In particular, there has been a growing demand for the development and implementation of strategies to foster entrepreneurial capabilities in young people. Moreover, in order to meet to the dynamics of the current changing economy, employers expect workers to acquire and continuously update much diversified skills. There is a demand for competency at the technical level, but also regarding transversal skills, such as ICT competences, problem-solving, planning, organization and communication (World Bank Development and Private and Financial Sector Development Departments 2011; Lapiņa and Ščeulovs 2014).

Education, in particular the tertiary education sector is a key societal resort for the development of competences, and can play a key role in reducing the gaps between market demands and the profile of job seekers, therefore contributing to reduce unemployment rates (World Bank Development and Private and Financial Sector Development Departments 2011; Górniak 2013; Lapiņa and Ščeulovs 2014). Universities show a high degree of concern about the level of employability of their students (Ortiz-Medina et al. 2016), and in empowering students with the competences most valued by employers. Although some employers screen future employees according to their degree classification, for others, the grades are not the most important aspect as they pay attention to a whole range of competences not necessarily covered directly in the academic curricula (Saunders and Zuzel 2010). Entrepreneurship education appears as an important vehicle to stimulate the development of transversal skills in young people, both as an attribute for enabling them to create their own jobs, and for qualifying them to make the difference in the competitive labour market (Premand et al. 2016; Lapiņa and Ščeulovs 2014). Several studies have examined this topic and demonstrate that the employability of young people is boosted by entrepreneurship skills (Premand et al. 2016; Bustamam et al. 2015). In this new social and economic landscape several authors have also been highlighting the relevance of the models of entrepreneurial universities (Guerrero et al. 2016).

While education programs for entrepreneurship focus on skills and development of competences, they also aim to stimulate the capacity of students to act and think differently, and in making them more effective people, not only at work but also at a personal level (Bagheri and Pihie 2013). This first part of the chapter clarifies key concepts on the field of young graduates’ transition into the labour market.

1.2 Challenges of the Contemporary Economy

The World economy has faced significant changes throughout the last decades. Globalization has brought new dynamics, such as businesses trading via the internet and connections between countries with very different cultures and features. These new global contexts asks for unprecedented levels of flexibility and adaptability from individuals, and consequently from organizations. Employers expect their employees to be increasingly more prepared for the competitive national and international markets (Lapiņa and Ščeulovs 2014; Nowacka 2015). Such requirements are demanded even from young graduates, and across all kinds of job categories (Lapiņa and Ščeulovs 2014).

Simultaneously, with the increasing number of graduates, the job market becomes more competitive. Moreover, the recent economic and financial crisis requires great adaptive capabilities from companies, for which they need strong collaborators (OECD/European Commission 2015). Overall, countries are facing serious employability problems (OECD/ILO 2014), with young and inexperienced graduates having difficulties in the their search for a job (Górniak 2013). Demographic trends also contribute to this scenario. In Europe, data shows that in a near future the older segment of the workforce will be a major proportion of the population. Forecasts advanced suggest that the proportion of people aged over 65 in relation to those aged 15–64 will increase from 26% in 2008 to 38% by 2030, and that this will have important impacts in the skills that will be available in the job market. This scenario will lead to increasing pressures for expanding labor market participation, notably for women as well as for the requalification of unemployed and immigrant populations (European Commission 2010b).

1.3 Youth Unemployment

Unemployment is one of the greater challenges faced by EU, with youth unemployment being of particular concern (European Policy Centre 2014). Youth unemployment is defined as the unemployment among citizens under 25 years old (between the ages of 15 and 24) compared to the total labour force (employed and unemployed) in that age group (Eurostat 2015c). A large proportion of people in this age group is actually out of the labour market, because many young people are still full-time students. In 2012, the youth unemployment rate in EU-28 achieved the worrying number of 23% (Eurostat 2015c), registering only a slight decrease in 2014, to 21.8%, and to 20.1% in 2015 (Eurostat 2015a).

Although one of the functions attributed to the education system is to prepare students to enter the labour market, and considering that the number of people in tertiary education continues to increase (with 2012 registering an approximate number of 4.8 million students graduating in the EU-28), it is likely that the labour market will be unable to absorb these people (Eurostat 2015b). It is commonly accepted that competences are an essential part of an individuals’ development, for businesses and for society, in general. They assume a great importance, not only in the face of the economic crisis, but also in the face of a world that is increasingly globalized (Klosters 2014). Nevertheless, although there is a common concern on Education, many employers consider there is a gap between the competences required for jobs and the ones that young graduates actually have (World Economic Forum 2014; OECD and ILO 2014).

Job candidates go into the labour market with specific knowledge in several areas, with competences and other individual characteristics, such as work experience, choices of education, training, innate abilities and preferences (Klosters 2014), that may constitute factors that will allow a successful transition from school to work. However, it is not uncommon for candidates to show a low level of development of some competences that are required to respond to the expectations placed on them (Gillinson and O’Leary 2006). Demos (2006) refers, for instance, that since they come from the university used to working in the peer-to-peer environment, it leads them to find difficulties when a shift occurs to organizational hierarchies, and they tend to have some problems in their relationship with their bosses (Gillinson and O’Leary 2006).

Entrepreneurship is regarded as one possible solution to youth unemployment (OECD/European Commission 2015), since it could re-activate economies and create jobs. At the same time, studies recognize the importance of entrepreneurial competences to foster employability and reduce the risk of unemployment (World Bank Development and Private and Financial Sector Development Departments 2011).

2 Key Competences for Youth Employability

Over time, various definitions of competences have been proposed by different authors. There is often even a lack of agreement about what is the correct term to use, and for this reason the speech can be sometimes confusing, since “skills”, “expertise”, “acumen” and “competency” are used in the literature as synonyms (Mitchelmore and Rowley 2010). Boyatzis (1982) was the first to popularize the term “competency”, defining a competency as “a capacity that exists in a person that leads to behaviour that meets the job demands within the parameters of organizational environment, and that, in turn brings about desired results”.

Overall, competences are defined as an integration or combination of components of knowledge, attitudes, skills, values and behaviours that a person needs to successfully accomplish a task or an activity (Kyndt and Baert 2015; Morris et al. 2013). Considering that competences are changeable, they could be acquired, learned, developed and reached by experience, training or coaching and practice (Kyndt and Baert 2015). Yet, it is important to highlight that while competences could be enhanced with practice, if they are not practiced, they may be lost (Morris et al. 2013).

Regarding the area of entrepreneurship, the literature establishes a number of competences that determine the performance and the success of an entrepreneur. There is still some ambiguity in the studies concerning the entrepreneurial skills, and in an entrepreneurial context there is no consensus regarding the relative importance of each competence specifically (Morris et al. 2013).

The list of entrepreneurial skills is endless and there is no general agreement about the classification of those competences. Nevertheless, many authors refer entrepreneurial competences as covering personal characteristics, attitudes and skills such as problem solving, leadership, communication, self-awareness and assessment skills like business and managerial competences (Frank, 2007; Morris et al., 2013)

Attempting to answer the question about what transversal competences the young professionals need to present on their profile, the first phase of this research aims to develop a system which may recognize, evaluate and develop horizontal skills of people, students and graduates (particularly entrepreneurial skills). The following topic provides an analysis of key literature in the field of entrepreneurship competences that contributed to identify the essential dimensions to this study. With the aim of investigating the alignment between the contributions of literature and the skills required by employers in the real context of the workplace, the research involved also the analysis of 40 job offers, for graduates, from the different European countries addresses in the study (Cyprus, Lithuania, Poland and Portugal). This helped to identify the competences needed for a successful entrance into the labour market.

2.1 Key Competences to Find a Job: Insights from the Literature

Notwithstanding the huge number of studies in the field of entrepreneurship competences, there is few literature concerning the competences that graduates need to have when they leave university and make the transition to the labour market, regardless of creating their own job or working for others.

Considering that there is no set of characteristics that every entrepreneur and young graduate must have, a core list of entrepreneurial skills has been defined. Fig. 1 identifies a group of relevant competences for young students/graduates to successfully enter the labour market, deriving from the literature (Frank, 2007; García-Aracil and Van der Velden 2008; Mitchelmore and Rowley 2010; World Bank Development and Private and Financial Sector Development Departments 2011; Morris et al. 2013; Saunders and Zuzel 2010).

Fig. 1
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Comparison of competence profile between students and employers: average for the sample

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Firstly, contributions of notably literature on the topics of the entrepreneurship area and competences needed to young people in the labour market were required from all project partners for the identification of key competences addressed in the current literature. In addition, in order to assure that all relevant literature would be considered, after an in-depth literature analysis, the most identified key competences were chosen and assumed as essential for development. These were grouped in two main categories: (1) transversal competences and (2) technical competences, which complement each other (Lima et al. 2013).

Entrepreneurial competences presented in Table 1 represent a summary of the most referred characteristics found in the literature.

Table 1 Preliminary identification of relevant competences: insight from the literature
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2.2 Most Desirable Competences: Preliminary Insights from Employers

Many students invest in their university education in order to have specific knowledge and skills with the intent to obtain better employment prospects and to be successful in the labour market. Simultaneously employers expect that young people to be endowed with well-developed skills in order to become efficient right from the moment of recruitment (Saunders and Zuzel 2010). However, many employers consider that there is a gap between the competences required for jobs and the ones that candidates have (World Economic Forum 2014; OECD and ILO 2014).

Sometimes the level of skills acquired at school and those required in the labour context do not match (García-Aracil and Van der Velden 2008). Saunders and Zuzel (2010) analyses the employability skills in the vision of employers and the students perceptions, and obtained a good agreement between them. However, the priority assigned to each of the competences was different according to the group (students vs. employers). More than technical and subject-specific skills, even in highly technical jobs, employers value a range of personal characteristics and generic skills (Saunders and Zuzel 2010).

Employers who complain about difficulties in recruiting usually report a lack of soft/transversal skills (Gillinson and O’Leary 2006), namely in: occupational skills (related to the specific qualities of activities performed in the given occupation); self-organizational (self-organization and motivation to work, showing initiative, timeliness, entrepreneurship, and resilience to stress) and interpersonal (contacts with people, both colleagues and clients, and cooperation in the group) (Gillinson and O’Leary 2006; Kocór and Strzebońska 2011, Górniak 2013). Also communication skills and creative thinking are seen as competences which are lacking in new employees who have recently left education (Gillinson and O’Leary 2006).

In order to identify the competences required by employers in the real workplace, the study looked at the content of job offers, from a selected sample of ten examples per each country addressed in the study. The sources considered included offers from government or public institutions (e.g. Ministries), such as Employment and Vocational Training Institutes, Universities or their careers services and public employment pools. A time limit was established and set for job offers advertised in the period between 2014 and 2016. This phase of the research was complemented with the conduction of semi structured interviews with stakeholders such as training organizations and employers.

Interviewees were asked to score on a scale from 1 to 5 a list of transversal competences, namely personal and generic competences, regarding their importance for employability. It was also a semi-open question in order to give the opportunity for respondents to state the most important competences to find a job. In this question, respondents were invited to list up to a maximum of three other competences not mentioned in the previous question, and also scoring them in a scale from 1 to 5.

The results from this analysis are summarized in Table 2.

Table 2 Most competences requested in job offers by country
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From the descriptive analyses it can be concluded that in all countries, job offers are focused mainly on the desired transversal skills, namely generic competences, rather than focused on technical competences. Only for functions of a more technical level, the technical skills are called and described in more detail.

The most frequently mentioned skills in job offers are fluency in foreign languages mainly in English idiom, ICT competences (e.g. “Fluent in Microsoft Excel/Google Sheets”; “Good PC skills”) and management skills (e.g. “management of the materials and financial means available”; “Project management skills”). The following competences appeared to be the most referred to: attention/focus on details, communication skills, creativity, customer-orientation, flexibility, initiative, motivation, multi-tasking, organizational skills, problem solving, self-reliance, stress resistance, team work, time management, willingness to learn, the ability to work independently and to work under pressure. All the above and most cited competences in the job offers, fit in the transversal competences category. Less often mentioned but not less important, the following skills were highlighted: autonomous learning; availability to travel; driving license; motivation; networking; numeracy; organizational skills; persuasiveness; previous experience; results orientation; stress resistance; and time-management.

Several job offers referred to the need for future employees to have a university degree, but only in one case was asked a “very good grade”. This fact is in line with the authors view that less importance is attributed to grades by employers (Saunders and Zuzel 2010). Universities have an important role in the development of skills and the entrepreneurial culture of their students, that can produce a range of desirable outcomes, providing them several differentiator factors for their working and personal life. This issue is of high relevance to society and the current economy, and it is already a target of attention by policymakers.

3 A Deeper Enquiry About Competence Demands: Building on Data from Young People and Employers

The following stage in the research involved the development of questionnaires to address young people and employers about the existing and the needed competences for employability. The questionnaires were developed with the purpose of collecting data about the entrepreneurial competences that young people would need in order to make a successful transition from their studies to the labour market. The questionnaire was composed of 144 statements, associated with 38 competences, which had been previously identified in the research stage before, and the interviews with employers and stakeholders described in previous section. This preliminary analysis led to the identification of 20 personal competences and 18 generic skills. In the questionnaire for students, they were asked to make a self-assessment about their own skills, using a scale from 1 to 5 (“strongly disagree” [1] and “strongly agree” [5]). The questionnaire addressed students with diverse academic profiles. Employers, on their turn, were invited to score the statements listed, in the same scale (“not desirable at all” [1] and “strongly desirable” [5]), considering their opinion about how desirable each competence was for young graduate to hold.

The questionnaire was answered by a total of 537 people, divided in 449 graduates and 88 employers. Table 3 shows the sample by each country.

Table 3 Number of students and employers surveyed per country
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Data collection was followed by a statistical and psychometrical analysis in order to define the final version of the competence assessment scale. The psychometric analysis includes the assessment of the quality of a measuring instrument, based on the validity and reliability. The reliability refers to the repeatability of findings, which means, the reliability evaluates the extent to which a measurement procedure yields the same results on repeated trials. The validity is the extent to which the construct measures what it says it is measuring. To this aim, a sequence of steps and criteria were followed in order to clarify and identify the most important competences for transition to the labour market.

The assumptions needed to assure the adequacy of the analysis were tested, resulting in a two final factor structures, one for personal competences and another one for generic competences, which are presented below in Table 4.

Table 4 Final transversal competences
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Data analysis led to the development of a final scale including ten different competences.

Afterwards, a deep analysis of the students and employer’s questionnaires was performed, considering the ten final transversal competences. The findings of this study are presented on the next paragraphs. The global relationship between the employer’s perceptions, about the transversal competences importance for a smooth transition of young graduates to the labour market, and the students own perception is presented in Fig. 2.

Fig. 2
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Representative competence gaps per country

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Aiming to analyse the needs of students, concerning the development of competences for entrepreneurship and other transversal ones, a gap analysis was developed across the questionnaire’s results from the perspective of employers versus students, by country.

Gaps were calculated considering the difference between the importance of a given competence for employers and young students/graduates preparation, with positive values (above 0) meaning that the competence requires some training. Values below 0 mean that such skills do not require training, revealing that the self-assessment value of students is higher than the expectation stated by employers.

The results obtained in all the countries under consideration show that in general the employers consider that all the ten competences are important. In all of them the average score achieved is higher or equal to 4, except for the commercial awareness competence in which the average is equal to 3.8, both in Portugal and in Lithuania. In addition to this, the results presented in Fig. 2 also show that employers seem to expect young graduates to be more prepared than they fell they are, since for all the competences the gaps reached represent positive values in the four countries considered in this study.

The data also show that the competences with higher gaps are tolerance to stress and commercial awareness, in which the gaps are higher or equal to 0.44 and 0.58, respectively, in every country. This is observed in all the countries under consideration, although in Cyprus and Poland the differences are more expressive. It is also interesting to note that both in Cyprus and Poland the communication competence emerges as the third most critical one, considering again the gap between the importance attributed by employers and young graduates preparation. Finally, we would also like to emphasize the customer orientation competence results, in which in all the countries the gap falls between 0.42 and 0.46.

On the other side, ICT and adaptability competences are the ones in which the above mentioned gap is smaller in all the countries. The adaptability competence gap values ranged between 0.08 and 0.16, and from 0.03 to 0.2 for the ICT competence.

From this analysis we are able to conclude that there is a need to improve students/graduates skills, particularly the tolerance to stress and commercial awareness competences, as they are the personal and generic competences with greater gaps.

Figures 3 and 4 exhibit the averages reported score by employers and students, per country.

Fig. 3
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Total representation of the average reported answers by employers per country

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Fig. 4
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Total representation of the average reported answers by students per country

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As stated in Fig. 3 the results of employer’s perceptions, considering the four countries, show that tolerance to stress, time management, adaptability and customer orientation are the most valued competences. On the other side, commercial awareness is the less valued one. In addition to this, Fig. 4 demonstrates for the ten competences that there are not relevant differences per country among the students’ answers.

To summarize, we emphasize that the most worrying gap between the employers’ expectations on personal competences and students’ assessment, were found in tolerance to stress. Also, commercial awareness is the generic competence that most concerns, regarding the highest gap results.

This analysis allowed us to conclude that there are competences that need training, across all countries, particularly the ones with higher gaps. Therefore there is a demand for the offer of tools and training mechanisms to develop both personal and generic competences, towards which ActYouth Project can provide a relevant answer.

4 Conclusion

As a result of several factors as well as the current economic crisis, the increase in the number of graduates, the reduction in the number of jobs and the increase in the retirement age, challenges such as youth unemployment have emerged. Young people leaving the education system find it increasingly difficult to enter the labour market. This is a concern for many policymakers, who believe that one way to combat this problem is to give more attention to the development of entrepreneurial skills in HEI.

This chapter has proposed a theoretical and practical framework from the workplace context to entrepreneurial profiles for young graduates. In order to realize the progressive potential and transformative capacity of young graduates in finding a job, carrying the required abilities to enter in the labour market. Skills can be acquired and developed throughout life which represent a key and differentiating factor for individual success. Many of the entrepreneurial skills could be acquired and developed in the school/university context (Frank 2007). Although there are other factors that influence the availability and characteristics of entrepreneurship, such as the existence of familiar business, innate factors and individual differences (Frank 2007; Morris et al. 2013). These factors lead to a change in how a student is influenced by entrepreneurship education.

The literature lists a number of entrepreneurial skills which are important for new entrepreneurs or people who want to enter the labour market better prepared. A list of key entrepreneurship competences were defined which are the most referred in the literature, divided in two main categories: transversal competences and technical competences. The most cited transversal competences are: adaptability, creativity, initiative, self-awareness, tolerance to stress, communication, foreign languages, leadership, management and use of ICT.

Furthermore, 40 job offers from the four countries were analysed. In the real labour market, a good knowledge in ICT, foreign languages, management skills, communications skills, problem solving and team work seem to be the skills most required by employers and, therefore, good indicators of high performance. It seems that there exists a strong degree of agreement between the skills that the literature consider as important for young people to have when entering the labour market and the skills requested (in job advertisements) by employers.

The emphasis, both in the literature and in the job offers analyzed, is given to transversal competences. With respect to technical skills the job offers refer to them less often, with the exception of work with a very specific technical component (e.g. software developer). This is consistent with what is reported in the literature and may be linked with the fact that in jobs that require more technical skills these can be provided through on-the-job-training (Frank 2007; World Bank Development and Private and Financial Sector Development Departments 2011).

It is clear that competences such as communication skills, team work (working with others), initiative, networking (contacts with people) are requested, and according to the literature they are the ones most often lacking in future employees (Gillinson and O’Leary 2006; Kocór and Strzebońska 2011; Górniak 2013). Possibly due to this fact, they are specifically requested in job advertisements. Knowledge of foreign languages is also referred to both in the literature and in job offers as a differentiating factor in the employability of young graduate (Araújo et al. 2015).

According to the literature review and data analysis resulting from this research, it is important to ask young people/students/graduates and employers their opinion about the competences needed to enter into the labour market with success. This kind of methodology to acquire Data Collection Tools, targeting students/graduates, employers, training organizations and stakeholders aims to verify if the information extracted in preliminary phases, as in the literature review, match with the reality. So, in this chapter we also present the results of a survey conducted with the aim to identify a set of most important transversal competences for youth employability. The following set of competences emerged: adaptability, attention to detail, social relations, time management, tolerance to stress, commercial awareness, communication, customer orientation, conflict management and ICT. According to our analysis tolerance to stress and commercial awareness are the competences that need more attention, since they are the ones in which the gaps are higher.

Such an initiative, which encourages dialogue between employers and employees can be a first step in approaching the mission of universities in terms of their relationship with the business sector, taking the realities of the workplace and the practical requirements of employers into account. This could allow universities to reframe their teaching methods and the focus of their research in order to provide students with the skills and abilities that they need in the field of entrepreneurship.