Skilled refugees could be the key to Europe’s future economic prosperity, according to a new report from the World Economic Forum.

The report says Europe is undergoing a profound demographic transformation driven by a declining workforce and an ageing population.

But is says an untapped workforce, including refugees, could play a key role in addressing labour shortages and supporting stronger economies.

“Populations are ageing, birth rates are falling and workforces are shrinking. Nearly one million people are leaving the labour market each year, placing mounting pressure on businesses, public finances and social systems,” the report says.

“Refugees, migrants, women and other groups, representing large segments of the population, remain underrepresented in European labour markets.”

The report says many refugees and migrants are ready to work but face systemic barriers that prevent them from contributing fully to the economic well-being of the communities they live in.

It says that in the face of labour shortages that are impacting sectors from healthcare to logistics, better integrating these groups is a strategic economic imperative.

“Among these groups, refugees and asylum seekers represent one of Europe’s most overlooked sources of talent. They are often discussed in terms of humanitarian need, but they also bring skills, experience and resilience that can strengthen economies. Many arrive with professional backgrounds, multilingual abilities and strong adaptability – qualities valuable in today’s labour market,” it says.

The report says addressing this gap requires rethinking labour market integration. It sets out a strategic framework with three priorities that can reshape the landscape.

These include: better use of existing skills through language learning, skills recognition and upskilling; strengthening the role of business and cross-sector partnerships, and; strengthening local capacity and holistic integration systems to advance socio-economic inclusion.

The report says early access to integration support, the buy in of local authorities and involving refugees in designing solutions are critical to properly harness the skills of refugees.

Addressing refugee unemployment and underemployment in Germany and other European countries could increase gross domestic product by up to 0.7 per cent, the report says.

“Labour market integration of people forced to flee must therefore be seen as both an economic strategy and a social investment,” it says.

“By unlocking existing talent, investing in skills and building inclusive labour markets, Europe can turn this demographic change from a structural risk into a source of long-term prosperity.”

Read the full report: Refugee talent could be key to Europe’s economic future | World Economic Forum