Germany’s ability to innovate at risk: 209,000 skilled workers in STEM professions are lacking

The STEM disciplines and professions (mathematics, information technology, natural sciences and technology) are of central importance for the innovative capacity and growth of the German economy. They are therefore also crucial to the success of the transformation in the coming years. Despite the sharp economic slowdown, the labor shortage in the STEM sector remains at a high level of 209,200 in September 2024 and threatens to increase in the coming years. German companies are already losing ground in the global competition for innovation. Urgent measures are therefore needed to successfully meet the challenges.

Berlin, November 6, 2024: The sharp economic downturn in 2023 and 2024 is also reflected in the ratio of job vacancies to job seekers in STEM professions, albeit to a surprisingly small extent. There are still 209,200 STEM jobs that cannot be filled. At around 109,100 people, the STEM skilled worker occupations form the largest bottleneck group in September 2024, followed by around 77,700 people in the STEM expert occupations segment (academics) and around 22,300 in the specialist, master craftsman and technician occupations. A breakdown of the labor shortage by sector shows that the largest shortages are in the energy/electrical occupations with around 68,600, in the mechanical and automotive engineering occupations with around 41,500, in the construction occupations with around 30,800, in the metalworking occupations with around 30,300 and in the IT occupations with around 18,700 people.

M+E industry: the driving force of innovation in the German economy

Industries with a large proportion of employees with a STEM qualification have high innovation expenditure in Germany. This is particularly true of the M+E industry, in which 55 to 68% of the workforce has a STEM qualification. The German M+E industry invested around 74 billion euros in research and development in 2023. That is significantly more than half of Germany's overall economic innovation expenditure. Well-trained people with STEM qualifications are essential to ensure that these innovation activities can be further increased to meet the challenges of the future.

Various studies show that skills shortages are one of the most important obstacles to innovation projects. A recent survey by the IW also shows that for 44% of companies, skills shortages slow down digitalization in the company, 29% are hampered by skills shortages in climate protection and the energy transition, and 27% in dealing with geopolitical risks. STEM specialists are particularly important for the success of the transformation.

Competitiveness: Germany is falling behind in international comparison

Germany is burdened by high and rising costs for energy, wages, taxes and bureaucracy and is losing ground in the global competition for innovation. Overall, a high proportion of existing industrial value creation in Germany is at risk. There are still strengths in research, patents and STEM education. There are also new opportunities in climate protection technologies. In recent years, other countries have also increased their expenditure on research and development more strongly in relation to GDP - with the result that, according to evaluations of the IW patent database, Germany's share of international patent applications has also fallen sharply.

Outlook: Demographics and declining educational performance are a burden in the innovation competition

"Germany's innovative strength threatens to decline significantly in the coming years due to a shortage of STEM specialists," says Prof. Dr. Axel Plünnecke, head of the study and the Education, Innovation and Migration cluster at the Cologne Institute for Economic Research. The future supply of STEM specialists will be burdened by demographic developments and at the same time (according to the PISA study) by the declining STEM skills of the next generation entering the labor market. Other countries such as Japan or Korea have significantly better and more stable STEM skills or, like the USA, France, Denmark and Sweden, have a much more favorable demographic starting position.

Steps against the STEM skills shortage

The following measures should be taken by an alliance of politics, business, science and civil society in order to strengthen STEM education along the entire education chain and thus counteract the STEM skills gap:

◼ Raise the potential of women: More young women should be attracted to STEM through stereotype-free career and study guidance, female role models and mentoring programs.

◼ Activate the potential of older employees: The transformation requires an increasing amount of further training for STEM workers. Companies affected by digitalization are therefore investing more in the qualification of their employees. In this context, universities should expand their part-time study programs and offer more academic continuing education courses. Legislators should also improve the framework conditions for later retirement in order to keep STEM specialists in the workforce for longer.

◼ Unlock the potential of immigration: The potential of the new Skilled Immigration Act should be better leveraged through faster bureaucratic processes. Immigration via universities is also particularly attractive, as a high proportion of graduates come from demographically strong third countries and work in academic STEM professions.

◼ Improve opportunities in the education system: In order to increase STEM skills and improve educational opportunities, early childhood education should be strengthened, high-quality all-day programs should be expanded, language and reading promotion should be intensified and additional funds, differentiated via a social index, should be made available for the individual support of children and young people. The Startchancen program should be evaluated and successful models should be extended to other schools.

◼ Promote digital STEM education: Digital education should be strengthened in teacher training and further education and digital teaching opportunities should be further developed. Digital media education should be introduced as early as pre-school and computer science as a subject from primary school onwards. Digital literacy should be strengthened, particularly with regard to the effects of excessive private media consumption. Furthermore, measures should be developed along the entire education chain to strengthen STEM education and extracurricular activities should be strengthened. The motivation for mathematics lessons and the learning atmosphere must be improved.

◼ To ensure the quality of teaching in schools, the availability of well-trained teachers must be guaranteed. Multi-professional teams should be expanded to support teachers, for example to successfully promote digital concepts.

View the study: click here.

Here you can download the following documents on the STEM Autumn Report 2024 Labor market report / MINT-Meter / MINT Autumn Report barrier-free / Press release MINT Autumn Report

About the MINT Report

The MINT Report is produced twice a year by the Cologne Institute for Economic Research. The study is commissioned by the following members of the National MINT Forum: Confederation of German Employers' Associations, Employers' Federation Gesamtmetall and MINT Zukunft schaffen.

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