Future Skills with Dr. Sven Rahner: the German strategy to boost skills development

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Talent development is a key priority for the German government. The National Skills Strategy addresses skills mismatches and develops digital skills to allow more productive systems and growth in the country. In this interview, Dr. Sven Rahner, Head of Secretariat of the German National Skills Strategy, talks about the country's plan to develop future-ready talent and make the transition to the future of work. On July 14, the GFCC is releasing a new report, Future Skills: Lessons and Insights from a Review of Innovative Skills and Development Initiatives. The launching will happen during the Frame the Future of Talent conversation. This publication is part of a sequence of materials featured in the report.

GFCC: Mr. Rahner, Germany is one of the countries that addressed Industry 4.0 and digitalization very early on. In relation to skills and education, what are the key challenges that Germany is facing and how are you addressing them with the National Skills Strategy?

Dr. Sven Rahner: Germany has a very skilled workforce and a strong manufacturing base. For us, ensuring the steady supply of skilled workers and addressing the increasing skills mismatch is the main priority. Our goal at the National Skills Strategy is to develop concrete solutions with our social partners, with industry and labor unions, to make the transition as smooth as possible. The issue of skills development is prioritized because of digitalization and also because of demographic challenges: our society is aging. There is the issue of threatening unemployment of skilled, middle-aged workers. Digitalization makes this issue even more pressing. Within the Ministry, monitoring of the need for skilled workers has shown that by 2025 we will have a total job loss of around 1.3 million while a total of 2.1 million jobs will be created. By 2035 the picture is very different: 4 million jobs will be lost while 3.3 million jobs will be created. Our predictions have shown that if we do not meet the demand for training and education, we may face a loss of production of 100 billion € per year.

GFCC: In your experience with the German industry, what do you think will be needed with regard to skills development and training?

Rahner: It’s clear that we will need a combination of very specialized skills and general skills. In light of the increase of digital technology in everyone’s work and life, we obviously have to make it a priority that every worker is equipped with basic knowledge of digital technology, especially for low-skilled and older workers. We need to bring more people to completion of their professional degrees, and we need to allow for flexible solutions that allow workers to adapt to changes in the industry. We need more employment options and possibilities for change over the course of a worker’s working lifespan. We are examining individualized instruments to develop these existing skills or facilitate a switch into industries that are likely to experience employment growth.

GFCC: Between research and your engagement with social partners, what is the main purpose of the National Skills Strategy?

Rahner: Originally, the National Skills Strategy developed from a number of existing committees on skilled workers and industry specialists. In 2018 we needed to streamline these efforts and developed a strategy across different ministries. The National Skills Strategy is a joint project of the Federal Ministry of Labor and Social Affairs as well as the Federal Ministry of Education and Research. And because of the federal system in Germany, we are also involving the Bundesländer and their respective Labor, Education, and Economic Affairs Ministers. Additionally, we have industry groups and members of our confederation of labor unions involved. Within our economic and social system, we see this inclusivity in finding a solution as a key to success and a broadly carried decision and policy-making process. At the same time, we also see our role as an intersection between policymaking and civil society. The transition costs from digitalization are worrying for some and we want to ensure that workers can rely on guidance about their individual professional developments. Providing and expanding on our advisory services is therefore also a priority for us.

GFCC: What policies and legislation have come out of this initiative?

Rahner: Since our inception, we have drafted and developed concrete policies. For a long time, re-skilling and expanded training were predominantly available for the unemployed to facilitate re-entry into the labor market. The approach that we are aiming at is an “Employment Insurance” rather than what we already have in place, only the unemployment insurance. In other words, prevention and anticipation are important. The Skills Development Opportunities Act is an example of the first step of such preventative measures, which already contains a binding right to counseling on continuing education and training by the Federal Employment Agency and extends support for continuing education and training to workers who are affected by structural changes regardless of their qualifications or the size of their company. Right now we are working on another legislation the Work for Tomorrow Act, which specifically addresses education and training for short-timed workers, which not only allows for added training but also encourages and supports workers to catch up on vocational qualifications.

GFCC: What is your main audience for these policies? Do you have a focus on specific worker groups that are more or less vulnerable in this transition?

Rahner: Given that the National Skills Strategy is under the guidance of the Ministry of Labor and Social Affairs as well as the Ministry of Education and Research, we are certainly addressing more the issues of blue-collar workers and low-skilled workers. The big challenge for blue-collar workers is automation and direct competition with advanced manufacturing technology, so there is a strong need to upskill.

GFCC: You mentioned the National Skills Strategy is a very cooperative initiative. Given the challenges faced, how do you capture what falls into the financial and organizational responsibility of industry, companies, policymakers, educational institutions, and labor unions?

Rahner: We definitely see a shared responsibility here. It’s reflected in how we distribute the costs of such innovative solutions. We know for sure the market alone cannot regulate this. Skills development has largely been a patchwork of different actors finding different solutions over the years and it’s largely worked out well. But these are unprecedented times and so we see our responsibility in bringing these actors together and finding a coherent solution in line with an inclusive industrial policy. In terms of the financial responsibility, this is a joint effort–but equity and equality for the individual is a big priority. We are very fortunate that we have very well-established industrial relations and that our industry partners have a strong interest in upskilling locally, at the plant. This makes our initiatives accessible to workers.

GFCC: Earlier you mentioned that there are different international initiatives and discussions on a supranational level. What can you tell me about the National Skills Strategy’s engagement with other national partners?

Rahner: Within the European Union there are also supranational discussions about such instruments. France and Austria, for example, have already developed similar ideas. The OECD is currently also working on a report on different national training and skills initiatives and their work is covering our work here at the National Skills Strategy as well, along with some case studies about other government initiatives. Korea, for example, is doing something similar. The ILO is also addressing the issue of skills and retraining at their congress in June this year. We have bilateral exchange with Japan as well — so we really want to exchange best practices with other countries around the globe who are faced with similar challenges.