German businesses are turning to automation solutions in response to a significant labor shortage the country is currently grappling with. Official data from June revealed approximately 1.7 million job vacancies across Germany, and roughly half of German businesses are struggling to fill these positions, given that Germany boasts the largest economy in Europe.
One of the primary labor challenges facing the nation is the retirement of a substantial portion of the Baby Boomer generation, individuals aged 57 to 75, leaving a significant workforce gap. Additionally, Germany’s declining birth rate has been an ongoing concern.
Replacing these retiring workers is proving to be a challenging task, as many younger individuals are hesitant to accept jobs perceived as physically demanding or hazardous. This labor shortage has been estimated to reduce Germany’s economic growth by approximately $109 billion annually, according to official estimates. The Federal Employment Agency predicts a further decrease of 7 million available workers by 2035.
This issue is affecting businesses of all sizes, leading some to adopt automated systems as a solution. With similar labor shortages impacting other advanced economies, the use of robotic and artificial intelligence (AI) technologies is expected to expand. Nela Richardson, Chief Economist at financial provider ADP, suggests that these innovations will fundamentally alter the future of work, as people will adapt to new ways of performing their jobs.
The significant investment in automation by car manufacturers and major industrial companies has made Germany the world’s fourth-largest market for robotics and the largest in Europe. As the cost of robots decreases and their operation becomes more user-friendly, smaller companies are also embracing automation. The International Federation of Robotics estimated that around 26,000 robotic machines were installed in Germany last year.
Ralf Winkelmann, director of FANUC Germany, notes that robots are vital for the survival of companies that face potential closure due to labor shortages, and they serve as a valuable resource for small and medium-sized businesses, with approximately half of the Japanese-made robots being sold to such enterprises.
ROLEC, a family-run German company specializing in systems for protecting industrial electronics and control equipment, recently acquired its first robot, enabling 24-hour production. ROLEC has already invested in a second machine and plans to continue automating its processes.
Experts in the industry highlight that the growing use of robots reflects their improved user-friendliness, often equipped with a Human Machine Interface that operates similarly to a smartphone. Even companies with 20 to 100 employees are being targeted by start-ups like SHERPA Robotics, indicating that specialized skills are no longer a prerequisite.
Surprisingly, even workers and trade unions, who were once concerned about job losses due to automation, are showing an increasingly positive attitude. A public opinion study conducted by a robots marketplace organization in June revealed that nearly half of German employees now view robots as a helpful solution to the labor shortage.