The Characteristics of the Community's Population
In a recently released labor market forecast by the Institute of the German Economy (IW), Germany is projected to experience a significant shortage of skilled workers by 2028, driven by demographic challenges such as an aging population and declining birth rates[1][2]. This shortage is expected to affect both West and East Germany, but regional differences exist.
**Regional Focus: West vs. East Germany**
- **West Germany**—As the more industrially diverse and economically stronger region, West Germany faces broad skilled labor shortages across various sectors. Large companies and the overall economy are pledging substantial investments (€631 billion by 2028) to counteract the skill gaps and revive post-recession growth[2].
- **East Germany (e.g., Saxony)**—The eastern region, exemplified by Saxony, has a strong industrial base particularly in advanced manufacturing and microelectronics but is facing acute constraints in workforce supply. The demand for advanced digital skills has increased sharply (by 22.3 percentage points over five years, four times the OECD average). Initiatives like Silicon Saxony are actively working to develop skills and attract talent for high-growth tech roles, reflecting a pronounced need for specialized expertise[3].
**Key Findings**
- The forecast suggests that the skills gap in West Germany is projected to exceed the 2022 record by 16.4% by 2028. In East Germany, the skills gap is expected to widen by an additional 36.0% by 2028[1][2]. - The wave of retirements is already at full speed in East Germany, further exacerbating the skills shortage[1]. - The skills shortage is a significant issue affecting 1,300 professions in Germany, as revealed in the IW's labor market forecast for 1,300 additional professions[1][2]. - The demographic effect that contributes to the skills gap is building up more slowly in West Germany, compared to East Germany, which faces an additional risk of brain drain[1][2].
**Implications**
By 2028, Germany will require urgent immigration, training, and policy responses to address the escalating skills shortage. Both regions will need coordinated efforts to mitigate the shortfall, with East Germany, with its specific industrial structure and already more constrained labor supply, requiring particular attention[1][2][3].
[1] Institute of the German Economy (IW) (2023). Labor Market Forecast for 1,300 Professions. Retrieved from https://www.iw-halle.de/en/publications/research-papers/skills-shortage-in-germany-by-2028
[2] German Federal Ministry of Labour and Social Affairs (2023). Skills Shortage in Germany: Challenges and Opportunities. Retrieved from https://www.arbeitsagentur.de/en/topics/labour-market/skills-shortage
[3] Silicon Saxony (2023). Initiatives. Retrieved from https://www.siliconsaxony.org/en/initiatives/
Science plays a crucial role in addressing the escalating skills shortage in both West and East Germany, as specialized expertise is in high demand across various sectors like advanced manufacturing and microelectronics. To fill the skill gaps, workplace-wellness and health-and-wellness initiatives could be implemented to attract and retain top talent, given the increase in demand for advanced digital skills and the wave of retirements.
