ifo Institute: Digital Skills Not Yet Standard in German Industry, but Growing

Digital skills are becoming more widespread in German industry. This is shown by a new study conducted by the ifo Institute together with the LinkedIn Economic Graph Team on the basis of data from the LinkedIn professional network. Since 2016, more and more industry workers have been listing digital skills on their CVs.

Today, 48 percent of LinkedIn members who work in industry have digital skills. “That’s a surprisingly low number. In a country with highly digitalized production, one would expect all employees to have at least application skills,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. Steffen Kampeter, Managing Director of the Confederation of German Employers’ Associations (BDA), says: “Digital skills are decisive for Germany’s competitiveness as a business location. This study shows that there’s still plenty of room for growth.”

“These results show that Germany has some catching up to do,” says Barbara Wittmann, Senior Director Talent Solutions and member of the management board at LinkedIn DACH. “If we are to survive in global competition, we must seize the opportunities offered by digitalization, shape them, and drive them forward. To do this, we need employees and leaders who not only understand and apply new technologies, but can also develop them independently. It is up to politicians and educational institutions, but also employers and employees, to ensure that we don’t fall behind on this issue and that everyone benefits from the opportunities offered by digitalization.”

Falck adds: “A good third (36 percent) of members have digital professional skills, as they are called. These are precisely the skills that enable companies to drive digitalization and develop new business models.”

The higher up in the hierarchy the members are, the fewer digital professional skills they list. While 41 percent of career starters and 40 percent of employees have digital skills, the figure is 30 percent for managers and just 25 percent for board members. “This is alarming, because digital change is usually more successful when it is driven by top management,” Falck says. Kampeter adds: “Lifelong learning is the be-all and end-all of this. We need a new culture of continuing education that makes lifelong learning a matter of course for everyone, regardless of the industry or professional activity.”

There are differences among employees with regard to occupational groups, gender, and size of their employer: as expected, most software developers (88 percent) list digital skills, but only 42 percent of project managers do, followed by 39 percent of mechanical engineers, 31 percent of product managers, and 21 percent of sales specialists.

Women are strong in digital application skills, while men are strong in digital professional skills (37 percent, women 33 percent).

Employees in small and medium-sized enterprises (SMEs) have fewer digital professional skills (35 percent) than those in large corporations (41 percent). And this gap is widening: “If the development of digital skills is slower in SMEs, it’s worth considering whether they need special support,” Falck says. Kampeter says: “What’s important is for further training to take place in a practical and demand-oriented manner and for companies to closely coordinate such training with their employees. Companies are aware of the importance of training and development: they already invest EUR 33.5 billion annually in training their workforce.”

The following differences can be observed across industries: digital professional skills are strong in the defense and space industries (56 percent). The electronics sector (44 percent), industrial automation (44 percent), and the automotive industry (41 percent) are also come out well.

Regional distribution among major German cities is unbalanced: while the proportion of members with digital skills is comparatively high in Munich (45 percent), Regensburg (45 percent), Berlin (42 percent), and Stuttgart (42 percent), it is only 29 percent in Leipzig, for example. “If everyone is to share in the benefits of digitalization, politicians must ensure that these inequalities do not grow,” Falck says.