Lessons for the United States from the German Model of Training Skilled Workers

Updated with a clip from the last panel: The Importance of Workforce Training for Advanced Economies.

At a recent Aspen Institute Manufacturing & Society event on the German Model of manufacturing excellence, one consistent theme emerged: the United States must do a better job training skilled workers for the modern factory floor. During the session, organized by the Institute and three German partners representing government and industry, leaders from American government, educational, and business institutions, as well as speakers from German firms producing goods in the US all affirmed that one of the highest priorities for creating a robust manufacturing society and the good jobs that come with it is a better pipeline of skilled workers. Several speakers illustrated this deficiency of skilled workers by citing the number of job openings going unfilled in the manufacturing sector, others by the remedial work and training firms need to provide to new hires. Estimates of manufacturing job vacancies range from 300,000 to over 600,000: the higher number being equal to about 5% of the total manufacturing workforce. This is about twice the unfilled jobs rate in the overall economy.

Speakers offered a number of explanations for the skills gap. American commentators noted that the education system is generating many fewer graduates at every level in the science, technology, engineering, and mathematics (STEM) fields, as early as primary school, that are crucial to both research and design and the production of products required in a globalized manufacturing industry. Others noted that cultural preferences in the United States do not favor these fields, and that the bias is especially acute for women. Several audience members pushed panelists to consider a push to attract students to STEM fields in primary school, and many of the American speakers suggested US industrial firms need to be more involved with local educators in designing and adopting appropriate training strategies and credentialing systems reflecting the needs of local firms. They also noted that in some cases educators have not been sufficiently responsive to the requirements of the local or national economies, due in part to the cultural bias towards four-year college degrees.

A major focus of the event was the German system of vocational education and training (VET), whose organization and workings were outlined by the President of the Federal Institute for vocational education, Dr. F. H. Esser. Well under one-half of German students enroll in four-year college degree programs, while 55 percent enter a degree program combining the work in the classroom with practical experience in operating companies. Curricula are a collaborative process between industry, educators, labor, and government. 75 percent of the program costs are paid by companies, and the path to jobs is linear, thanks to the work apprenticeships. Youth unemployment in Germany is low by European standards — 8.2 percent in Germany compared to an average 21.6 percent in the EU and over 50 percent in Spain — and the manufacturing sector is able to thrive in a globally competitive economy despite its high wage structure in substantial part due to the contributions of the highly skilled workers the VET system provides. German society is far more culturally supportive of vocational education, and students are often willing to commit to this track in high school.

All program participants agreed that the “German Model” for skills training works well in Germany, and that parts have been successfully adopted in areas of the United States with large German manufacturing facilities. However, divergent traditions, economic and political systems, and cultural preferences in the two countries preclude wholesale adoption in the US. The challenge and remaining work lies in selecting and implementing the model’s most successful and adaptable components for the US.

For those interested in the entire discussion (which also includes analysis of how Germany supports research and development for manufacturing), a full recording of the event can be found here. The introduction and keynote address are below: