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2018 OECD Economic Surveys: Germany 2018

image of OECD Economic Surveys: Germany 2018

Germany has been enjoying strong economic performance. Exports have benefited from an innovative manufacturing sector. Record-low unemployment has underpinned private household demand. On aggregate, the population enjoys a high standard of living. The share of population in relative income poverty is lower than in most OECD countries. The main concern for policy makers is to make sure strong social and economic outcomes are sustained in the future and that efforts are stepped up to reduce inequality of market incomes and poverty risk. New technologies must be exploited more extensively, with benefits for the whole society, as well as for strong growth consistent with the low-carbon transition. Accelerated technological change requires workers to be ready to adapt throughout their life time. Better use of workers’ skills, especially among women, can also boost productivity. Enhancing education opportunities for people with weak socio-economic background brings better access to economic opportunities to all.

SPECIAL FEATURES: BOOSTING PRODUCTIVITY AND PREPARING FOR THE FUTURE OF WORK; IMPROVING SKILLS AND THEIR USE

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Boosting productivity and preparing for the future of work

This chapter reviews policies to strengthen Germany’s productivity growth and prepare for changes in labour markets brought about by new technologies. The chapter also discusses how social protection and the bargaining framework should be reformed for the future of work. Germany enjoys a relatively high labour productivity level but productivity growth has been modest in recent years. There is room to boost productivity growth by accelerating the diffusion of new technologies throughout the economy. Vigorous entrepreneurship and innovation by small and medium enterprises are key for such technology diffusion while strong broadband and mobile networks widen the scope of data-intensive technologies that can be exploited to increase productivity. Widespread use of new technologies will bring about significant changes in skill demand and work arrangements. As in many countries, Germany saw a decline in the share of middle-skilled jobs in employment. A relatively high share of jobs is expected to be automated or undergo significant changes in task contents as a result of technological change. New technologies are also likely to increase individuals engaging in new forms of work, such as gig work intermediated by digital platforms. Such workers are less covered by public social safety nets such as unemployment insurance than regular employment.

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