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Economic restructuring

„How subsidies exacerbate the skills shortage“

By Andre Kartschall and Aspasia Opitz, rbb, as of October 31, 2023, 6:47 a.m.

„How subsidies exacerbate the skills shortage“

As of October 31, 2023, 6:47 a.m.
 Billions in funding are flowing into the Cottbus region to phase out lignite. This also causes problems: large-scale new settlements are depriving the local economy of skilled workers.
By Andre Kartschall and Aspasia Opitz, rbb
Interview excerpt with Dr. Harald Michel, I/F/A/D - Institut, Berlin

 This is not how Lars Wertenauer had imagined the economic upswing in Lusatia. He is managing director of Metall-Form-Technik GmbH in Kolkwitz in the southeast of Brandenburg. And for several months now, he has been losing employees again and again - poached by larger, surrounding companies.

 He has lost six of his former 60 employees this year alone. Some went to Deutsche Bahn, which is building an ICE maintenance facility in Cottbus. Others said goodbye to the lignite company LEAG, which says it is „working on a green future“; with solar parks and electricity storage.

 Since then, the spirit of optimism has been mixed with a certain disillusionment. Wertenauer has observed this among engineers and technicians. „Employees are actively poached.“ Some of the newly arrived companies even paid earnest money, as a starting bonus, so to speak. Other entrepreneurs from the region also report this.

Demographic change is striking

 The big competitors simply offer a better salary. And this despite the fact that Wertenauer pays its employees standard wages. Medium-sized businesses in Lusatia have been complaining about a shortage of skilled workers for years. The population of the region around Cottbus has been falling for years - demographic change is hitting here with full force.

 In order to cushion the economic consequences of the impending coal phase-out, there are plenty of subsidies for the region: regional and municipal funding, business support and money for economic and ecological change. In plain English, this means that jobs are being created, many of them with the help of tax money.

 Deutsche Bahn alone wants to employ 1,200 people in Cottbus - in a maintenance facility for ICE trains that will go into operation at the beginning of next year and run at full capacity in 2026. Employees who have to take the train from somewhere. Wertenauer says: „As a small medium-sized company, we cannot keep up with the financial strength that the railway brings.“

Headhunting after training

 Wertenauer is not alone in his dissatisfaction: car dealerships in Cottbus complain that newly trained mechatronics engineers are simply being poached in droves after their apprenticeship. Until recently, there was hardly anything like this within the region. The state-financed economic recovery appears to be enormously exacerbating the shortage of skilled workers - and weakening the established middle class.

 There are scientists who warned about such effects decades ago. Harald Michel from the Institute for Applied Demography in Berlin, for example. For him, the government's windfall of money being poured out over Lusatia is just a political sign: „According to the motto: We have not given up on the region. You can already see the problems that this brings with it in a shrinking region: cannibalization.“

Lost business in Lausitz?

 The problem of „cannibalization“ has been known to researchers for at least 25 years. If the population is shrinking - and it is doing so in Lusatia - it is almost impossible to counteract it politically: „The pie is simply getting smaller and smaller. And if you combat the organic shrinkage with funding policies, you might induce something like artificial growth - but only regionally,“ says Michel.

 However, viewed across Germany as a whole, this has negative consequences. „In economic terms, this is not even a zero-sum game, but rather a minus game,“ says Michel. „Investing such sums in shrinking regions means an economic loss. The funds would be invested more effectively in growing regions.“

 The problem has been recognized in Lusatia - there is no solution in sight. Manuela Glühmann from the Cottbus Chamber of Commerce and Industry explains: „Of course we urge the big players to deal with this fairly, especially Deutsche Bahn and LEAG. And we also know that they are aware of their responsibility.“ Statements that many entrepreneurs in Lusatia view with skepticism when it comes to poaching bonuses.

 Medium-sized company Wertenauer relies on young people, as he says: „We like to train new trainees with passion.“ His metal processing company has already won a training award twice. But whether the next generation will stay with the company afterwards seems more uncertain than ever before..

More on the subject of a shortage of skilled workers (in German language):

(Translation of 'zAppAx')

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Harald Michel
Demographic development and effects on spatial development - using the example of Brandenburg and the Uckermark

Keywords: Demographic change - Aging - Shrinkage - Regional differentiation - Spatial development

Demographic Development and Impacts on Spatial Development - using the example of Brandenburg and the Uckermark

The main effects of demographic change - shrinkage and aging on the one hand and increasing concentration on the other - are extremely differentiated in spatial terms. The resulting set of problems is huge and, at the same time, complex. Regional planning models and plans should pay more attention to the demographic trends. The coexistence of growth, restructuring and shrinking processes requires flexible solutions adapted to the specific region. The article illustrates the challenges using the Uckermark district as an example.
Demographic change - Aging - Shrinkage - Depopulation - Regional differentiation - Spatial development

1    Demographic initial situation¹

Demographic developments indicate that in 40 years there will be significantly fewer people living in Germany than today. With weaker immigration, the population will fall from 83.2 million to 74.4 million, i.e. by more than 10 percent. Even with moderate influxes, as has been the average in recent decades, it still falls to 78.2 million (14th coordinated population forecast; Federal Statistical Office 2019).

The fact that the population in Germany is shrinking is not essentially the problem. Much more explosive is the change in the age structure, which will have fundamental effects on society and coexistence. At the same time, the demographic differences within Germany will continue to increase due to migration processes and their own dynamics. The new federal states in particular are increasingly among the regions of Germany that are being shaped by this self-reinforcing development.

1.1   Effects of demographic change on the regions of Eastern Germany

The main effects of demographic change - shrinkage and aging with simultaneous increasing concentration and internationalization (combined with an increasing importance of integration problems, especially in the large agglomerations of western Germany) on the other hand - are extremely spatially differentiated and run in the countries and regions, cities and municipalities in Germany are not proportional or linear and not along political or administrative boundaries. We are experiencing a coexistence of growth and shrinkage processes. In a rough overview, there is a demographically-related division of Germany in relation to this development: In addition to prosperous metropolitan areas that are increasingly attractive, large parts of northern and eastern Germany, especially in the rural peripheries, are experiencing change as a shrinkage as more and more people emerge and more emptying spaces leading to depopulation with a rapid increase in the proportion of the elderly population.

The number of inhabitants in the rural peripheral regions will shrink more in the next 20 years than in the past 22 years and the process of shifting the age structure (aging) will accelerate, which will lead to a further widening of the demographic differences. Of course, this does not remain without impact on the settlement structures and their development, especially in East Germany. The rural areas, which make up around four fifths of the eastern German federal states, are subject to permanent and far-reaching demographic change processes, which in particular call into question the guarantee of public services in more and more areas. This process is further reinforced by internal migration in East Germany itself, as a few urban centers are able to stabilize themselves through immigration from rural areas, albeit only temporarily. On the one hand, these processes promote the accelerated „degradation̴ of further areas of land. Demographic concepts and initiatives in the competition for residents (EW), whose long-term benefits for municipalities are unclear, should therefore be reflected.

The greatest challenges in dealing with demographic change in East Germany, with the core issue of ensuring public services for a large proportion of the residents of these parts of the country, are still ahead and will cause increasing problems.
These demographic conditions in East Germany have so far been mainly attributed to a particularly pronounced aging and shrinking process. Nevertheless, these regions have shown a clearly asymmetrical development of emigration for years - also from a gender perspective - which, particularly in the rural areas of the districts, has led to a pronounced male predominance in the younger age groups of the working population. In combination with the already known economic and social problems, this gender-specific demographic imbalance is already posing major challenges for the region today, but especially in the medium and long term.

The situation is differentiated: While the gender proportions of the cities in East and West Germany are roughly at a comparable level and there is even a surplus of women in university towns, the rural regions in East and West Germany differ more significantly in terms of the deficit of women than ever. Especially in younger age groups, there is a disproportionate female migration from rural regions, while this gender selectivity is exactly the opposite for older women in most regions. Districts in the north of East Germany, but also in Thuringia and Saxony-Anhalt, are particularly affected by this numerically large imbalance between men and women of younger and, in some cases, middle age groups in a region. In some districts the male surplus among 18 to 25 year olds is 20 percent.

The resulting problem is enormous and at the same time diverse. The demographic, economic and social effects of this development go beyond the immediate effects of the emigration of large parts of a respective „mother generation“. They cannot currently be fully assessed in the medium and long term, for example: care for older relatives (even based on conservative calculations, the number of potential care people in families in East Germany will decrease by at least 25 percent by 2035 and this will be the case), absolute and relative increasing number of those in need of care or regional dominance or tolerance towards deviant behavior with a male connotation, which can have a lasting damaging effect on the region's image from the outside perspective. In a situation in which not only has the number of young people leaving school been continuously declining since the mid-1990s, but is forecast to continue to decline dramatically, this results in an extraordinarily difficult demographic situation (Michel 2017).

1.2   Causes of development

As a result of the emigration of particularly young people (a significant number of over 1.8 million people from 1991 to 2012) and the drop in birth rates since 1989/90, the new federal states are experiencing a serious aging process as a whole. In 1990, the new federal states with an old-age dependency ratio of less than 20 (or just over 20) were among the countries with relatively few older people in relation to the working-age population. In 2030, old-age dependency ratios will be over 70. Saxony-Anhalt will then probably have a ratio of 71, Mecklenburg-Western Pomerania of 70 and Thuringia of almost 70.

1.3   Persistence of processes

There can be no talk of a trend reversal at present or in the foreseeable future. Without exception, all demographic processes in East Germany are running on the paths that have been shown for around 20 years: the aging and shrinking process continues unabated and will even increase in intensity compared to the West German countries. Since 2010, the generations born after the fall of communism in East Germany have moved into active migratory age. For well-known reasons (drop in births), these age cohorts are up to 50 percent smaller in number than the previous cohorts. In many East German countries there is simply hardly anyone in the relevant age groups who could emigrate now or in the near future.

1.4   The accelerated emptying of the peripheral spaces

The focus of the analysis is on rural areas as peripheral areas. In East Germany they make up around 80 percent of the area and are home to around 50 percent of the population (for comparison: in the West German states around 20 percent of the population lives in rural areas, which make up around 50 percent of the area). It is precisely in these areas that demographic change - shrinking population numbers, aging residents - will be concentrated in the next few years and will take place at increasing speed in all areas.

Fig. 1: Regions in demographic change / source: BBSR 2014: 17

It can be assumed that these disparities will lead to permanent regional differences, to an intensification of the development differences between urban centers and rural-peripheral areas: a direct coexistence of strongly or slightly shrinking, stagnating and temporarily stable to slightly growing regions will emerge.

In addition, there are unfavorable geographical conditions. In East Germany there are significantly fewer large cities and metropolitan regions (with the exception of Berlin) that can serve as regional stability and development anchors.

The cities and communities in the rural regions described are particularly affected by the consequences of demographic change; they face a wide variety of political and social problem constellations. Migration processes create demographic and social disproportions in the age and gender structure. The decline in population leads to the general infrastructure falling below the carrying capacity; This means that the maintenance of functioning regional labor and supply markets is at stake. The sharp increase in the proportion of old people places high demands on local infrastructure to ensure public services.

1.5   Temporary stabilization of middle and upper centers through immigration from the rural surrounding areas

The process of „desolation“ of peripheral areas as a result of demographic change is further intensified by internal migration, as a few urban centers are able to stabilize themselves through influx from rural areas, albeit only temporarily (islands of stability). In this context, the goal of creating equal living conditions in all parts of the country as a state goal, which is currently being discussed again in current politics, is not realistic in this form and must therefore be fundamentally redefined (cf. BMI 2019).

Equality can and must no longer be understood primarily in terms of regional features, but rather must be defined as the creation of social equality of opportunity. In view of the different developments in the sub-regions, there can no longer be uniform standards. Minimum standards must be redefined, particularly in shrinking rural areas, and spatially graduated and realistic offerings of social services and benefits must be developed. However, access to high-quality education and health facilities must be ensured in all parts of the country. The current growth-oriented understanding of politics needs to be supplemented by a paradigm of shrinkage and restructuring.

The control instruments that are primarily aimed at distributing growth are no longer sufficient to meet the challenges of demographic shrinkage processes. Rather, processes of dismantling, stabilization, revitalization and qualitative development must be designed. Mission statements and plans should monitor demographic developments more closely and have a controlling effect.

The coexistence of growth, restructuring and shrinkage processes requires flexible solutions tailored to the respective region. As a result, corresponding models have to be edited or reformulated at regional and municipal level in order to align them with the requirements of demographic change as integrated regional adaptation and development strategies.

2    Situation in the state of Brandenburg

The state of Brandenburg occupies a special position in this development in that its peripheral regions of the „wide metropolitan area“ (with over 60 percent of the state's inhabitants) are developing identically to the other states in East Germany, while the area around Berlin („Berlin Surrounding area“) is the only region in the New States to benefit to a remarkable extent from the charisma of a so-called „anchor city“, the capital Berlin.

Fig. 2: Population development in the state of Brandenburg compared to 1990 / Source: own evaluations of the IFAD database (26.07.2023)

Based on the balance of natural population movements alone, the state of Brandenburg has had a population decline of 10 to 15 thousand inhabitants (PE) every year since 1993. Until the year 2000, this was counteracted by the spatial population movement with a positive net migration of around 10 to 30 thousand people per year. Overall, the population of the state of Brandenburg grew. It was only in 2000 that the positive balance of migration and the negative balance of natural movement (excess deaths) were balanced out and thus a standstill in population development. Since 2001, the spatial balance has been low and the overall development is determined by the negative natural balance - with the consequence of the significant decline in the number of inhabitants since 2000, interrupted from 2015 by slight increases from immigration.

The forecasts for Brandenburg up to 2030 (LBV 2018) assume that the population will decrease by around 60,000 people to 2,495 million people by 2030, and in the longer term even to 2,222 million people by 2060.

Fig. 3: Population projection 2030 compared to 2010 for the middle areas / Source: LBV 2018, Attachment 2, Paper 3

A massive shrinkage is to be expected in the rural areas („“wide metropolitan region“) (from 2016 to 2030 by around 127,300 inhabitants - that corresponds to -8.3%), while in the Berlin area there is an increase of 83,800 inhabitants in the medium term (that is +8.7%) can be assumed. However, the potential for population growth from the capital will only be able to compensate for the fundamental developments for a limited time.

This means that the socio-demographic differences between the Berlin area and the wider metropolitan area will continue to increase in the future.

3    Case study: The Uckermark district

The Uckermark district is an example of the development in the „wide metropolitan area“ of the state of Brandenburg defined according to the state development plan for the capital region (LEP HR 2019). With around 120,000 inhabitants, it has the highest population of the districts that do not border Berlin and at the same time (together with the Prignitz district) has the lowest population density of all districts in Brandenburg with 39 inhabitants per km² (the „wide metropolitan area“ has a population density of 57 inhabitants per km²).

The sharp decline in population, resulting from a negative natural population balance (excess death) and high emigration figures, has been observed for many years. As a result, the Uckermark district can be viewed as a prime example of the complex demographic aging process in rural regions.

There has been a population decline of around 28 percent since 1990. This is an exceptional value which, however, can be found in one way or another in most of the rural peripheral areas of the New States.

When looking at the population development and forecast (LBV 2018), it becomes clear that the trend of population shrinkage will continue. By 2030, the population of the Uckermark region will decline by a further 17 percent. The slight increase in 2015/16 as a result of increased immigration was only a temporary interruption to the trend that continued from 2017 and also shows that international immigration, even of a considerable size (in 2015/16 Germany had a net immigration of 1.639 million people) have little impact on the course of demographic change processes at the regional level in East Germany.


The development of the age structure of the population in the Uckermark district exemplifies the changes in an aging society. The younger generation is becoming increasingly smaller and the number of old cohorts is constantly increasing. The changed age structure in the Uckermark district can be illustrated using the old age and youth quotients.


In 1993, the ratio of young people under the age of 15 was still a remarkable 41.7 people per 100 people of working age between 15 and 65 years. 25 years later there were only 28.8 young people for every 100 employable people. The old-age dependency ratio has developed in the opposite direction. In 1993 there were only 18.3 people over 65 for every 100 employable people. In 2018 there were already 48.8 old residents per 100 people aged 15 to 65. The forecasts show that the respective trends for the old age and youth quotient will become even stronger in the future.

The Uckermark district is therefore an example of the rural peripheral regions of eastern Germany most affected by demographic change. Their further demographic development will only be marginally influenced by political intervention; what is required is an intelligent design of regionally tailored adaptation strategies.

¹  The data and figures mentioned in the text are based on our own evaluations of the IFAD database: (26.07.2023)

² (06.07.2023)


BBSR - Federal Institute for Building, Urban and Spatial Research in the Federal Office for Building and Regional Planning (2014): Regions particularly affected by demographic change. An important topic in the context of demographic strategy. Bonn. = BBSR online publication 11/2014.
BMI - Federal Ministry of the Interior, Building and Community (2019): Our plan for Germany - equal living conditions everywhere. Berlin.
LBV - State Office for Building and Transport Brandenburg (2018): Population forecast for the state of Brandenburg 2017 to 2030. Potsdam.
LEP HR - State Development Plan for the Berlin-Brandenburg Capital Region (2019): Ordinance on the State Development Plan for the Berlin-Brandenburg Capital Region (LEP HR) dated April 29, 2019, which came into force on July 1, 2019.
Federal Office of Statistics (2019): 14. Coordinated population projections. Wiesbaden.
Michel, H. (2017): Something new in the East? In: Mayer, T. (Ed.): The transformative power of demography. Wiesbaden, 331-339.

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