As today's digital landscape moves faster than ever, many businesses and organizations find themselves grappling with a shortage of skilled IT specialists, and Germany is no exception.
This ongoing shortage is a major hurdle for sectors that heavily depend on IT and digital transitions, and also affects the overall region's competitiveness.
But guess what? This also uncovers a golden opportunity for innovative technologies, such as no-code, to step up and fill that gap.
In this article, we will explore the current state of digitalization, the causes of innovation stagnation and how no-code development platforms like LoftOS can speed up digital transformation in Germany.
The State of Digitalization in Germany
Digital transformation is no longer an option for businesses; it is a necessity.
It is the driving force behind innovation, competitiveness, and growth in all sectors. It's no surprise that the shortage of IT specialists in Germany is hindering this crucial progress.
To put everything into context, let's talk data.
The Current Figures on IT Skills Shortage in Germany
According to a 2023 report by Bitkom, Germany lacks 137,000 IT specialists. The shortage of skilled workers, which had been warned about for a long time in advance, has now caught up with us after a long time of looking the other way.
...and this just reveals the true extent of the IT skills gap in Europe. As of now, we have only scratched the surface of the actual deficit, but as you can tell, the data paints a grim picture.
Yes, it's as serious as it sounds
This shortage of IT specialists has a direct impact on the competitiveness of businesses in Germany. With the inability to leverage digital technologies fully, these businesses face significant challenges in maintaining their competitiveness in the global market.
But how does this number translate to financial loses?
Labor Shortages Costs Companies a Lot of Money - €73,000 to be Exact
Yes, you heard it right.
According to a 2022 'cost of vacancy' analysis by StepStone group, an unfilled job role can set your company back by a whopping €29,000 euros on average.
And brace yourself for this one - for companies with over 250 employees, this figure shoots up to more than €73,000 euros! Now, isn't that something to think about?
Yet, there's more to the story. — the demand for IT talent is exploding even faster.
Germany's tech adoption and digitalization is projected for more growth, at CAGR of 4.12% between 2022 and 2027, specially among SMEs. This means, nearly every industry is racing to digitize operations and business models.
As a result, demand for developers, and other IT experts, is skyrocketing. And Germany simply doesn't have the talent pipeline to keep up.
Germany's Digital Future Throttled by Government Inaction
According to a recent study by Bitkom, only 11% of the 334 digital projects planned by the current government, have actually been implemented so far. Two-thirds are still in progress. Bitkom President Ralf Wintergerst labelled the glacial pace of progress the “brake block for digital Germany,” even calling the country a “failed state” when it comes to digitizing government administration.
During the pandemic, many praised Germany for its digital progress. But the numbers tell a different story. Germany's digitization index inched up just slightly, from 107.9 in 2021 to 108.9 in 2022.
For all the talk of digital acceleration spurred by COVID-19, the gains seem marginal at best.
The IT Skills Gap Reveals an Even More Alarming Trend
According to a study by Kompetenzzentrum Fachkräftesicherung (KOFA), a competence center for securing skilled labor, an average of 33,932 open IT positions requiring a university degree went unfilled last year. That's a 76.6% increase compared to the previous year. For skilled IT workers with vocational degrees, open positions jumped 77.3% to 2,213.
Bitkom President, Dr. Ralf Wintergerst, further comments on the downward trend of students enrolled in Germany.
There are still too few young people and, above all, too few women studying computer science. And the drop-out rate is consistently over 50 percent, which is far too high. We will not be able to meet the increasing demand for IT specialists from the universities.
So not only is government digitization slow, but Germany lacks the tech talent to pick up speed. Between policy paralysis and the widening skills gap, Germany seems destined to keep falling behind global digital leaders.
What is The Reason for The Slow Development?
Good question!
If we dig a little deeper, the answer is manifold.
First, the public sector is plagued by limited funding and bureaucratic complexities that stifle innovation. It’s also not too hard to find outdated tech and sluggish processes still in place, as highlighted in an article published by Open Access Government.
Compounding this is Europe's private sector and its surprisingly low cloud adoption. The AWS Digital Decade report shows only 26% of European companies leveraging cloud computing, missing out on a key driver of digital efficiency and growth.
And speaking of skills, the report shows the numbers are worryingly slow.
In five years, basic digital skills have increased by just 2.3 percentage points, a stark contrast to the rapid technological advancements happening globally.
This is a concerning gap, especially considering the EU's ambitious target of 80% of its population attaining basic digital skills by 2030.
EU Commissioner for Education Mariya Gabriel said
We are not making fast enough progress and if we want to attain the goals that we set ourselves we need to accelerate and be more audacious.
The Shortcomings of IT Projects in Europe
Beyond Europe’s political and economic framework, IT departments' months-long project timelines make digital innovation crawl at a snail's pace.
According to a software development report by Goodfirms, 61.60% of the development companies established a common average developing time period of 4–6 months.
A typical software development lifecycle goes something like this: It all starts with lots of talks, planning meetings, implementation, and testing before it’s even deployed. Even if internal resources get allocated, progress is slow. Often exceeding initial budget by at least 75%, according to a report by McKinsey & Company.
Basically, 6 months in, and you're still waiting on that software.
In that same report, it is noted that only one in 200 IT projects delivers the intended benefits on time and within budget. And public-sector projects? They're even trickier, often blowing the budget nearly 3x more than private ones.
The result? Disappointing digital tools, costly new projects, and (even) chronic frustration.
The Solution? Make App Building as Easy as PowerPoint
That's our vision behind the no-code revolution. No-code development platforms, like LoftOS, allow anyone to create complex front and backend processes, web apps and systems with simple drag-and-drop interfaces, no coding required.
Much like how we taught employees to use Excel and PowerPoint in the early 2000s, we believe it's time to empower everyone to build their own solutions. No more complicated IT concepts — just create right away. And if mistakes happen, they're easy to fix, no harm done.
With no-code, IT development cycles shrink from 6 to 12 months to just hours or days. Digital innovation at the speed of thought.
So let's dive in a little deeper on no-code, shall we?
The Role of No-Code in Bridging the IT Skills Gap
With demand for digital solutions massively outstripping developer capacity in Germany, it's clear traditional coding approaches won't allow organizations to keep pace. To be fair this phenomenon is not exclusive to Germany, for the past couple of years, enterprises across different EU member states have been struggling with filling ICT vacancies.
There simply aren't enough skilled IT professionals to meet the needs.
This is where no-code platforms have the potential to completely transform the equation. By abstracting away the complexity of programming languages, no-code opens up app and solution building to non-technical employees across businesses.
Citizen Developers: The New IT Workforce
These newly empowered non-coders are being referred to as "citizen developers." Much like "citizen journalists" or "citizen scientists," it means organization staff from non-IT roles stepping up to help meet digital needs.
With an intuitive user-friendly interface based on visual programming concepts and pre-built building block and drag-and-drop interfaces, citizen developers can assemble workflows, bots, and create any type of web application they can think of 10x faster.
Pretty cool, right?
As you can imagine, the rise of capable citizen developers effectively brings more "developers" into the talent pool. Expanding the workforce in this way is how no-code can help close the growing IT skills gap we spoke before.
And if you’ve heard about the no-code hype but still not fully sure what it can do, let’s learn a bit about the history of no-code and see how far we’ve come from the first ideas of no-code development.
A Brief History of No-Code
Believe it or not, no-code platforms have actually been around since the 1980s. But early tools were limited to simple database builders and applications through simple interfaces vs traditional coding.
Fast-forward to the early 2000s, as the internet boom took off. Platforms like WordPress and others gained steam by making it easier for anyone to publish content or build simple static websites without needing to code. However, they lacked the capability to power more complex web applications.
In recent years, the main driver behind no-code growth has been enabling organizations to unlock efficiency gains and growth through digitalization. Different solutions have risen up to meet those needs by allowing teams to automate workflows, design full professional websites, and build more intricate functions without relying on developers.
And then the pandemic hit, accelerating digital adoption across industries. The rapid shift to remote work amplified the demand for no-code tools that empower non-technical employees to meet digital transformation needs.
Forward-thinking companies are realizing the vast potential of equipping their workforces with visual development platforms that abstract away the complexity of code. Unlike the static site builders of the early 2000s, these new no-code solutions allow non-technical employees to build complex, data-driven web applications on the front and back end.
As a result, no-code and low-code are entering a hypergrowth phase. The market is projected to swell to over $52 billion by just 2024!
So while no-code may seem like an overnight sensation, it's actually the realization of a 30-year evolution, with the most dramatic growth still ahead.
Digital Transformation in Germany is a Joint Effort
There's no doubt - the IT skills shortage poses an enormous challenge as Germany races to digitize across sectors. But it also represents an opportunity to rethink old models.
By embracing new solutions like no-code, companies can accelerate development and reduce pressure on overburdened IT teams. And by unleashing "citizen developers", they can expand their talent pool rather than competing for scarce coding experts.
But organizations can't drive this digital change alone. When companies, governments, and educational institutions work together, we can ensure that Germany remains competitive on the digital world stage.
Take the First Step with LoftOS's No-Code Platform
As you can see, embracing no-code solutions represents a major opportunity for companies and institutions across Germany to close the widening IT skills gap and accelerate digitalization.
With a no-code platform like LoftOS, anyone can bring solutions to life in hours instead of months.
Take a look at our expanding library of templates to jumpstart any projects you envision such as like digital marketplaces, online B2B communities, internal tools and more.
Ready to lead Germany's digital revolution? Cut development time from months to minutes and launch your own ideas with LoftOS today. The future of digital innovation has never been more accessible