Economic Context
General overview
In the last decades Germany has undergone a substantial shift from an industrial to a service economy and the manufacturing sector has become more service intensive. The shift from an industrial to a service economy is continuing. Small and medium enterprises prevail and play a crucial role in providing training.
The further worsening shortage of skilled workers, occupational bottlenecks and mismatch problems on the labor market are primarily due to Digitalization, Decarbonization and Demographic Change, which are changing Germany as a business location with increasing momentum. Added to this are the effects of the Covid 19 pandemic, the economic consequences of the war in Ukraine, and also the increasingly necessary adjustments to progressive climate change.
Current data:
- Population Current population of Germany - German Federal Statistical Office (destatis.de)
- Economic sectors and enterprises Economic sectors and enterprises - German Federal Statistical Office (destatis.de)
- Working population Employment - German Federal Statistical Office (destatis.de)
- Unemployment rate Unemployment - German Federal Statistical Office (destatis.de)
Role of SME for the VET system
The German economy is largely characterised by small and medium-sized enterprises (SMEs). SMEs play a crucial role in providing training to apprentices in the dual apprenticeship system.
The declining numbers of school leavers for demographic reasons as well as growing interest for higher education and the decrease of in-company apprenticeship training offers have an impact on the amount of newly signed training contracts in the dual apprenticeship system.
In Germany - the country with still the lowest unemployment rate in the EU - youth unemployment rose by 1.2 percentage points year-on-year (2019) to a total of 7%.
Current data:
- Youth population Datenreport 2022_20102022_online.pdf (bibb.de) (Page: 445; 455-459)
- Newly signed contracts for initial vocational training Vocational training - German Federal Statistical Office (destatis.de)
- Skills level Educational level - German Federal Statistical Office (destatis.de)
- SME Small and medium-sized enterprises (SME) - German Federal Statistical Office (destatis.de)
Regional differences
There are strong regional disparities in the German economy. Very roughly said there is a North-South and an East-West divide. East Germany still has a much lower labour productivity and less industrial companies, although there are also less prosperous regions in West Germany. Some regions and branches are affected by skills shortage. Especially SMEs encounter increasing difficulties to recruit skilled personnel. This is already mirrored in growing difficulties of enterprises to fill their training places.