Although the German economy was affected by the global financial crisis, it is in a solid state nine years later. The shift from an industrial to a service economy is continuing. Small and medium enterprises prevail and play a crucial role in providing training.
Germany has 82.5 million inhabitants (2016), of which in the end of 2017, 44.6 million were in employment. The numbers have been growing since 2006. Reasons for the growth are migration and mobilisation of the hidden reserve, especially the increase of employment among women. Despite the growth of the labour force the demographic change remains a challenge. The declining numbers of school leavers for demographic reasons as well as growing interest for higher education have an impact on the amount of newly signed training contracts in the dual apprenticeship system. Moreover, the effects of the inflow of refugees cannot be anticipated yet.
According to EUROSTAT the overall unemployment rate in 2017 was 3.8%; and the youth unemployment rate was/amounted to 6.8%. In 2016, 58.2% of the population aged 25-64 had an upper secondary qualification (ISCED 3-4) and 28.3% held a tertiary level qualification (ISCED 5-8).
The German economy is largely characterised by small and medium-sized enterprises (SMEs). Of the 3.5 million companies in 2015, 99.3% were SMEs. They include the majority of the 579,264 craft enterprises. More than 60% of the workforce in Germany is employed in SMEs. SMEs play also a crucial role in providing training to apprentices in the dual apprenticeship system.
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 service sector is the largest economic sector and generated 69% of the GVA (gross value added) in 2016, whereas the industry/manufacturing sector accounted for 30.4% and the agriculture/forestry sector for only 0.6%. This is also mirrored in the employment statistics. Almost three out of four persons were employed in the service sector in 2016, and the number of employed persons in agriculture/forestry has halved since 1991 (Statistisches Jahrbuch 2015/2017).
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 already affected by skills shortage. It is expected, that especially SMEs encounter increasing difficulties to recruit skilled personnel. This is already mirrored in growing difficulties of enterprises to fill their training places.
Sources and further reading:
- Federal Statistical Office of Germany Destatis: www.destatis.de (available in English)
- EUROSTAT: http://ec.europa.eu/eurostat/data/database