Executive summary
Berlin is Germany’s capital, its biggest city with a population of almost 3 650 000 and one of its 16 federal states. While the city has a labour force of more than 2 million, due to Germany’s decentralised economy it is neither Germany’s financial capital nor the city with the most headquarters of large enterprises. Berlin’s population has grown by more than 8% since 2000. It is one of the most diverse across Germany, with around one-third of its residents having a migration background.
Over the past decade, Berlin’s labour market has significantly tightened. The unemployment rate has been falling from 13% in 2010 to 5.5% in 2019. Following a decade of rapid employment growth driven by the service sector, Berlin’s labour market has now entered a new period. Recruitment of suitably qualified workers is becoming increasingly difficult for employers. Since 2010, the number of job vacancies has almost tripled and reached around 115 000 jobs in 2019. Ultimately, this development will put upward pressure on wages in sectors that experience shortages in labour supply and could reduce productivity growth of firms that cannot fill vacancies.
The tightening of Berlin’s labour market raises the importance of the local adult learning system for two reasons. First, the system will need to increase the supply of qualified workers that can meet the skills needs of Berlin employers. Second, as wages are likely to rise disproportionally in high-skill sectors, there is a risk of aggravated social divisions if low and medium-educated workers are not trained and upskilled to remain attractive to local employers.
While the pandemic has been the focus of much of the policy discourse in the past two years, Berlin had already faced several labour market challenges that require an effective adult learning system. The crisis has put the spotlight on these challenges. Educational attainment in Berlin has been rising but it remains below that of many other OECD metropolitan areas. Additionally, many inhabitants of Berlin are not making optimal use of their skills. Around 41% of workers are mismatched by qualification, the second highest degree of mismatch among 13 major OECD metropolitan areas. Such skills mismatches and gaps affect not only workers, but also have a negative impact on employers and thus local economic growth. Employers are struggling to fill vacancies with suitable staff, particularly in services such as health, social services and education.
The pandemic also compounds labour market trends that risk exacerbating socio-economic inequality in Berlin. As a catalyst for technological change, COVID-19 accelerates megatrends such as digitalisation and the automation of production processes. Already before the pandemic, Berlin faced higher automation risks than many other OECD metropolitan areas. Almost half of all workers in Berlin (47%) could be directly affected by automation, compared to less than 30% in cities such as Oslo or London. Those workers need tailored support via skills development and adult learning before they become unemployed.
The challenges for Berlin’s labour market call for greater efforts aimed at enhancing and future-proofing the adult learning and continuous education system in Berlin. Employers play a vital role in offering training, learning and skills development opportunities in Germany. However, employers in Berlin do not invest enough into training and learning for their employees. Only 14% of the labour force participated in work-related training in Berlin in 2019, the lowest participation rate among all German states.
Financial resources and capacity constraints are major obstacles for most firms in Berlin to provide training. However, they affect SMEs, microenterprises and own-account workers the most. Only 28% of enterprises with less than 10 employees in Berlin offer education and training opportunities, compared to 76% of larger enterprises with more than 250 employees. The fact that Berlin has the highest share of self-employed (13.5%) in Germany exacerbates these constraints. Additionally, own-account workers without any employees make up 74% of all self-employed in Berlin compared to 54% nationally, which further limits participation and investment in adult learning.
Berlin recognises the importance of skills and a functioning adult learning system to support skills development and the local labour market. In 2021, Berlin's first Adult Education Act came into force. Furthermore, during the pandemic the exchange between the responsible ministries in Berlin and other key stakeholders such as employer federations, social partners and learning providers has also intensified. Nonetheless, participation in adult learning and continuous education remains low in Berlin compared to other German states and is only half that of the leading OECD metropolitan areas. If Berlin were to catch-up with cities like Zurich, Helsinki or Stockholm, nearly half a million more adults would need to participate in training every year. Additionally, general adult learning and training for the labour market are separately defined and managed, even though a better integration could reap significant benefits.
Addressing the barriers to accessing adult learning, supported by a long-term comprehensive skills and adult learning strategy, is within the scope of public action in Berlin. To future-proof the adult learning system, Berlin could build on the following policy recommendations laid out in this OECD report:
Develop a long-term strategy for adult learning in Berlin
Develop a new master plan for skills development and adult education: The rapid labour market transformation requires a comprehensive strategy with a clear vision and objectives for the future of Berlin’s labour market and economy. Creating a new advisory board that includes workers, social partners and employers could help inform and steer the strategic direction of skills development policies and ensure that it aligns with local skills needs.
Encourage a culture of life-long learning: Creating stronger links between general adult learning and work-related continuing education and training could help enhance learners’ willingness to stay involved in Berlin’s adult learning system. Capitalising on Berlin’s general adult education provision could support transversal skills that matter for a work-related context and foster “learning to learn”.
Provide adult learning to all individuals and tailor it to the needs of vulnerable groups
Ensure learning and retraining opportunities reach workers most at risk of labour market transformation: This could include an expansion of short, modular courses and online training as a complement to traditional learning modules. Introducing education and training instruments that target own-account workers and account for their greater need for flexibility could enhance access to training and participation.
Expand learning opportunities for both basic as well as digital skills: Opportunities could include embedding digital skills training in adult learning programmes and expanding the Berlin Alphabetisierungskampagne (“literacy campaign”) and the work of the Grundbildungszentrum Berlin (“Berlin Centre for Basic Education”). Furthermore, Berlin could scale up social economy programmes that offer targeted support for youth who leave school early or lack basic skills.
Adapt the adult learning offer for migrants to their specific needs: A closer integration of education, labour market and career guidance services into Berlin’s Volkshochschulen (“Adult Education Centres”) could turn them into “one-stop-shops” for the economic and societal integration of migrants. Berlin could also scale up learning and training offers to migrants in areas that do not require German language proficiency, such as the IT sector.
Encourage employer involvement in adult learning and training
Foster demand-led training and labour market information: Increasing employer representation in the planning of skills policies could create a better alignment with labour market needs. Setting up regular surveys of enterprises in Berlin to collect comprehensive data on skills challenges in recruitment and with the existing workforce could help inform the design of effective training programmes.
Strengthen workplace training and tailor support to the needs of SMEs: Berlin could aim to establish peer-learning platforms that spread good workplace practices and share resources for training among both small and large firms. Additionally, Berlin could raise awareness of the value of training and learning among SMEs, by employing dedicated project account managers that contact SMEs proactively, help them develop a joint skills needs assessment, and identify suitable training programmes.