Backlash Is Bad for Business

3 min read

Turning equality into a culture war issue may result in economic self-harm. Dismissing equal opportunities and skills development as so-called »woke« distractions may undermine Europe’s competitiveness.

A right-wing backlash against practices condemned as too »liberal« or »woke« is gaining momentum in Europe. In a kind of anticipatory compliance with Washington and under pressure from far-right populist political campaigns, progressive initiatives are hastily being rolled back. Climate-neutral transformation? Too expensive. Corporate responsibility? Too bureaucratic. Gender equality? Too ideological.

But this cannot be confined to ideology. Economic strategy cannot be ignored. It is reasonable to suggest that the relegation of equal opportunities, high-quality education and fair working conditions to the margins is likely to weaken Europe’s competitiveness.

It makes sense to try to streamline reporting requirements. It’s fair to say that Europe has sometimes overdone it. As things stand, however, we may be taking an axe to our own strengths. That may well come back to hurt us economically. A quick look at the state of the labour market suffices to make this point.

Until recently, the shortage of skilled workers was considered the greatest danger to the energy and industrial transition. There were simply not enough hands, minds and skills to meet the challenge. Attention swiftly turned to the labour market potential of women. Boosting the proportion of women in engineering, industry and energy was not merely a sop to »woke« sensibilities but economic common sense. It would be self-defeating to allow such potential to remain untapped.

Nevertheless, it seems that once more it has become socially acceptable to put that potential back into hibernation. Layoffs are pushing skills shortages out of the headlines and equality is slipping down the agenda — or straight onto conservative blacklists.

In the post-nuclear fallout of neoliberalism the workers are once again coming under general suspicion. To take one example, part-time work is portrayed as a »lack of ambition«. »People need to work more«, we are told. But little, if anything is said about the essential structural reforms required to make that possible, such as proper child care, more flexible working practices or targeted upskilling. The fact is that child care is not being expanded and career barriers are not being systematically dismantled. Women’s labour potential is still expected to solve problems, but God forbid women should ask for adequate basic conditions.

In a parallel development, attitudes to qualifications are shifting. In the age of so-called »AI«, the traditional university career is becoming less imperative. It’s true that a revaluation of vocational training and skilled trades is long overdue. But if we simply reshuffle academic qualifications while doing nothing to tackle persistent gender stereotypes, we will end up stuck in the old patterns: girls in social professions, boys in technology. That would be both a step backward and economically reckless.

Education and training should be at the centre of a lively debate, but instead the discussion feels exhausted. It’s important to recognise, however, that a failure to invest today will lead to increasing problems tomorrow. Competitiveness is invoked constantly and of course Europe must perform much better in that regard. But our greatest strength will never be subsidies or tariffs, but always our well-educated people and a well prepared workforce.

There is no imperative to get involved in a race to the bottom. Europe couldn’t possibly come out ahead in such a race and anyway, who would want to? Our way forward depends on innovation, skills and lifelong learning. This is how we can ensure competitiveness over the long term.

Resilience is another important buzzword of our time. Rightly so, as our vulnerabilities are currently being painfully exposed. Having said that, resilience tends to be understood in purely technical terms, including grids, storage and production capacities. All of that is important, but it is scarcely sufficient. After all, innovation and technology only work as well as the labour markets in which they are embedded.

Europe – and not just its population – continues to get older. The current (poly)crisis makes it not less, but much more urgent to accelerate the digital and climate-neutral transitions. Otherwise, we risk decrepitude and falling behind economically. Nevertheless, women remain underrepresented in precisely the sectors most central to the necessary transformation, namely technology, industry, digitalisation and energy. Naturally, that is bad for women, but it is also very bad for Europe.

Achieving climate neutrality depends on technological progress. The energy transition will increasingly affect every household and everyday experience and exigencies must be reflected in development and design. The involvement of women engineers broadens perspectives. Diversity is not mere window dressing, but a factor in innovation. We need more women in engineering not (only) because it’s »fair«, but because the success of the energy transition depends on utilising all the available talent.

Energy, industrial and digital policy are becoming increasingly intertwined. Shaping the transformation will require capital and technology, certainly, but above all people with a wide variety of skills.

We face a dual challenge. On one hand, we must prevent industrial decline and make Europe more economically resilient; on the other, we must avoid falling back into old patterns. We need a deliberate effort to strengthen the sectors we need to maintain and expand in Europe, such as future industries, above all clean tech. This cannot be ensured by capital alone. We need qualified and committed workers whose contributions are respected. Resilience does not emerge in isolation, but as part of the process of strengthening our capabilities.

More European value creation will be necessary in strategic sectors. Our competitors are already operating along similar lines. We need a smart approach because crude protectionism is likely to alienate many of the partners we depend on. That is why qualitative criteria matter, such as working conditions, training and environmental standards. Particularly if industries take taxpayers’ money, they cannot undermine social rights. Collective bargaining should not be regarded as a luxury, but as a location factor. 

Public procurement is key. The state is one of the largest buyers in the economy. Its purchases and procurements shape markets, whether it be technologies, production sites or working conditions.

By imposing the right procurement criteria it is possible to steer whether companies invest in training, adhere to collective agreements, and systematically develop skilled workers. In practice, however, caution and an aversion to so-called »red tape« still dominate. Social criteria are seen as unnecessary complications and equality almost as a burden.

This is short-sighted. Public funds are intended to strengthen industry, but they must also be invested in the people who sustain that industry. Local content without skills development misses the point. Separation of equality, training and labour market policy from industrial policy weakens Europe’s capacity to act.

To this end we need to start well upstream of funding guidelines. To take a more personal example on the occasion of International Women’s Day, I was looking for a holiday course in technology and digital skills for my daughter, one that didn’t appeal only to nerds. But all I could find were programmes aimed at people who were already enthusiastic. Most other people were more likely to be discouraged than feel welcome.

That is not how we can encourage people to learn new skills. It is merely preaching to the choir. It’s not enough.

If we are really serious about technology, industry and energy, we need low-threshold options. More early experimentation, more active outreach, not least by companies themselves. That would truly be a smart economic strategy.