EMPLOYABILITY AND SECURITY IN A FLEXIBLE GLOBAL LABOUR MARKET German system must reform to meet challenges of new economy In his analysis of the German employment situation Norbert Kluge of the Hans Böckler Foundation argued that the consequences of the recent crisis in the new economy will continue for some time. Changes in the new economy will continue to impact on and prolong the significant structural changes already seen in employment patterns within Germany and elsewhere. 50 44 40 Proportion of employees in Germany in percent 51 Knowledge sector Importance of the knowledge sector to the company 30 30 20 14 10 12 25 Manufacturing industry 21 Service sector 0 1882 1900 3 Agriculture 25 50 60 70 80 1990 2005 Source: Winfried Heidemann 04/02, Hans-Böckler-Stiftung Figure 1 New economy after its decline: business as usual – or what’s new? In this new structure, science will dominate. Intellectual capital will be the important factor. Research already shows that this is happening, particularly in the service industries, but also in fringe industries such as agriculture. These changes will take place in both Britain and Germany. The proportion of workers in industry will decrease still further, while knowledge-based industries proliferate. The emerging new industries will need highly qualified employees; so too will large companies such as BMW and Siemens. The entire employment system is gearing towards a model in which experience and knowledge are the most important factors in a person’s job prospects. In future people will need more qualifications of a higher standard. It will be essential for employees to renew and expand their skills constantly throughout their working life. This fact alone will change the value of human capital and will impact on labour relations. Mr Kluge predicts that relations between employees and employers will blur and become more difficult to define.‘One cannot assume that a company will last forever. It may be created for a specific purpose and then be disbanded. New types of employment will make different types of participation necessary. Both employers and employees will need 15 © Anglo-German Foundation for the Study of Industrial Society