Productivity profile of Germany

The Council of Economic Experts is the appointed National Productivity Board of Germany as of August 1^st, 2019. It was originally set up in 1963 as an independent academic body advising German policymakers on questions of economic policy, aimed at assessing the macroeconomic development of Germany. It also aims to aid the public and relevant institutions in making informed judgments about economic developments.

The Federal Ministry for Economic Affairs and Climate Action (BMWK) also conducts analyses related to productivity issues.

The Commission of Experts for Research and Innovation (EFI). The commission advises the German Federal Government and presents an annual report on research, innovation, and technological performance in Germany.

Several independent (private and public) economic research institutions study productivity performance, its determinants, and policy implications. Moreover, they have close links with local universities. These include:

Centre for European Economic Research (ZEW)

The German Institute for Economic Research (DIW Berlin)

The Kiel Institute for the World Economy (IFW)

The CESifo Group

The Halle Insitute for Economic Research (IWH)

The Council of Economic Experts: Annual Reports (multiple);

CES Ifo: Monopsony Makes Firms Not Only Small but Also Unproductive: Why East-Germany Has Not Converged (2022);

DIW Berlin: Cost and Productivity Effects of Demographic Changes on Local Water Service (2021), Let's Switch to the Cloud: Cloud Adaption and Its Effect on IT Investment and Productivity (2022), Intangible Capital and Productivity Divergence (2022), Locus of Control and Investment in Training (2022); Broadband and Productivity: Structural Estimates for Germany (2021), The Productivity Puzzle in Business Services (2021), Knowledge-Based Capital and Productivity Divergence (2020);

EFI: Report on Research, Innovation and Technological Performance in Germany (2022);

Bertelsmann Foundation: Produktivität und inklusives Wachstum (2020) in German, Produktivität von kleinen und mittleren Unternehmen in Deutschland (2019) in German, Frontiers und Laggards: Die Produktivitätsenrwicklung deutscher Unternehmen, Produktivität für Inklusives Wachstum (2019);

IWH: The East-West German Gap in Revenue Productivity: Just a Tale of Output Prices? (2022), Worker Participation in Decision-making, Worker Sorting, and Firm Performance (2021), Micro-mechanisms behind Declining Labor Shares: Rising Market Power and Changing Modes of Production (2022);

ZEW: The role of intangibles in firm-level productivity - evidence from Germany (2022), Artificial Intelligence and Firm-Level Productivity (2022);

OECD: OECD Economic Surveys: Germany (multiple), Economic Policy Reforms 2023: Going for Growth – Germany, OECD Reviews of Innovation Policy: Germany (2022), Accessing Higher Education in the German State of Brandenburg (2022), Future-Proofing Adult Learning in Berlin, Germany (2022), Continuing education and training in Germany (2021); Career Guidance for Low-Qualified Workers in Germany (2022), Improving Skills and their Use in Germany (2018).

Promote a competitive business environment by strengthening infrastructure, competition and digitalisation:

• Further strengthen infrastructure investment including in high-speed broadband, low-emission transport, roads, schools, housing, energy, waste, and water.
• Bolster local capacity for infrastructure planning through inter-municipal cooperation, training, and expanding staffing in key technical roles.
• Reduce restrictive regulation in the professional services and government ownership in business sector activities.
• Improve the effectiveness of start-up and growth financing instruments, including by avoiding complexity, scaling up later-stage funding, and improving conditions for institutional investors to invest in venture capital.
•  Accelerate progress towards digital government and a data-driven public sector, focusing on high-impact services, collaboration across levels of government and open government data, and systematically collect and use data from e-procurement processes.
  
• Accelerate SMEs’ digital transformation by swiftly implementing existing SME support, increasing it if needed, and ensuring that investment incentives for physical capital do not discourage expenditures on digital services.
• Promote digital security risk management by firms through a revised national cybersecurity strategy; raise awareness and empower all stakeholders to understand and manage digital security risk, and incentivise continuous risk assessments in firms.
• Accelerate the digitalisation of administrative processes for migrants, notably with respect to visa issuance, and improve the coordination of the different processes in centralised migration offices at the Laender level.

Foster the qualification of the labour force from early childhood education to lifelong learning:

• Raise quality standards in childcare and early childhood education. Expand primary education to high-quality full-day education programmes.
• Further expand access to early-childhood education by centralising application procedures within municipalities.
• Raise the quality of basic education by using performance evaluations to better target support to children with weaker learning outcomes.
• Improve the VET transition system through better coordination across levels of government, providing systematic information and guidance services and strengthening on-the-job training.
• Strengthen general education within vocational schools while maintaining the strong labour market orientation of vocational education and training.
• Improve transparency in the adult education market and facilitate access to guidance on adult training.
• Offer more training programmes for the modular acquisition of qualifications in lifelong learning and foster the recognition of skills acquired on the job.
• Facilitate participation of low-skilled individuals in adult education by taking further steps to validate uncertified skills, including those acquired on-the job, and through workplace outreach.
• Increase ICT training for teachers to ensure effective use of ICTs. Introduce computational thinking earlier (particularly benefitting girls) while avoiding gender stereotypes in education and career guidance.