20 Million Retirees, 7.5 Million Missing Workers: Can AI Close the Gap?
By Dirk Röthig | CEO, VERDANTIS Impact Capital | March 4, 2026
By 2036, roughly 20 million baby boomers will retire. AI can help — but no algorithm can replace social cohesion.
The Biggest Personnel Problem Germany Has Ever Faced
Federal Economics Ministers, business association presidents, and trade union chairpersons rarely agree in Germany. On the topic of skilled labor shortages, however, a rare consensus emerges: the Federal Republic is approaching a demographic watershed whose consequences will dwarf all previous labor market bottlenecks.
The dimension can be captured in numbers, even if numbers can never fully represent the human reality behind them. According to calculations by the Institute of the German Economy (IW Köln), around 20 million people who are currently employed will retire by 2036 (IW Köln). This is the generation of baby boomers, born between the mid-1950s and mid-1960s — the most birth-rich cohorts in German post-war history. They are now withdrawing from the workforce in a short period, and nothing — no immigration, no educational reform, no political program — will be able to fully replace this mass of experience and labor.
The Institute for Employment Research (IAB) already expects more than 1.03 million open positions for the third quarter of 2025 (IAB, 2025). This is the current situation, before the major wave of retirees reaches its peak. According to projections by IW Köln, the gap between labor demand and supply will grow to as much as 7.5 million positions — a figure whose dimensions are scarcely comprehensible.
The question that naturally arises — and which I have already explored from an entrepreneurial perspective in my article on AI in economic life — is this: Can Artificial Intelligence close this gap? And if so: at what cost?
Dirk Röthig, as CEO of VERDANTIS Impact Capital, has grappled with these questions at the intersection of technological transformation and labor markets. His analysis reveals that while AI offers significant potential, the solutions are far more complex than simple automation. The challenge facing Germany is not merely technological but fundamentally social and political.
What AI Can Do — and What It Cannot
The optimistic answer to the skills shortage is: Yes, AI will be able to compensate for a significant portion of missing labor. The sobering addendum is: but not equally across all professions, not without substantial adjustment costs, and not without social disruptions.
The IAB conducted a widely noted study determining the so-called substitutability rate for various professional fields — that is, the share of tasks that could theoretically be taken over by AI or automation. For skilled trades, this rate stands at 62 percent (IAB, 2024). This means that in more than six out of ten activity areas performed by skilled workers, technological possibilities already exist today to automate these tasks at least partially.
This becomes particularly clear in the public sector. McKinsey has calculated for Germany that approximately 165,000 positions in public service could be replaced or substantially reduced through the deployment of generative AI (McKinsey, 2024). This primarily affects repetitive administrative tasks: file management, standard correspondence, application processing, data entry — all activities that currently consume many work hours and where AI systems already deliver near-human quality.
Similar developments are observable in the private sector. Bosch, Siemens, SAP, and numerous mid-sized companies have introduced AI-enabled process automation in recent years — not primarily to reduce costs, but to compensate for positions that could no longer be filled. In logistics, scheduling, route planning, and warehouse management are increasingly handled by AI systems. In accounting, intelligent software solutions automate invoice processing and account reconciliation. In human resources, AI tools support preliminary candidate screening, onboarding documentation, and personnel development planning.
Dirk Röthig notes that understanding these sectoral differences is crucial for developing realistic policy responses. His perspective as an investor gives him unique insight into how companies across different industries are positioning themselves for this transformation.
Sectors in Focus: Where the Pressure Is Greatest
Not all sectors are equally affected by the skills shortage. A look at the most heavily impacted sectors shows where AI will play the most significant role:
Care and Healthcare: Here, the skilled worker shortage is not only economically relevant but poses a direct health risk to society. Simultaneously, care professions are only partially automatable — human care, emotional competence, and physical nursing cannot be replaced by AI. What AI can do: reduce documentation burden, support routines, accelerate diagnostic processes. But the core human service remains human.
Skilled Trades and Construction: The skilled worker shortage in the trades is structurally deeply embedded. Too many decades have placed academic education above vocational training. AI can help with planning, costing, and quality control — and innovative materials can create new perspectives — but tiling, wiring a distribution box, or laying foundation masonry are activities that will require human hands and judgment for the foreseeable future.
IT and Digital Technology: Paradoxically, the sector that develops AI is itself affected by skilled worker shortages. Software developers, data scientists, and cybersecurity experts are scarce commodities. Here, AI-enabled development support — such as through GitHub Copilot and similar tools — can significantly increase the productivity of individual developers, but cannot address the fundamental skills shortage.
Logistics and Transportation: Automation has the broadest penetration here. Warehouse logistics, order picking, and increasingly long-haul road transport are being transformed by AI and robotics. In this sector, AI will actually be able to close substantial parts of the emerging labor force gap.
The Ethics Problem: Who Loses Their Job?
It would be dishonest to conduct the demographic transformation discussion without raising the distribution question. Because "AI closes the skills gap" is only one side of the coin. The other side reads: AI also destroys jobs — and not evenly distributed across all population groups, but concentrated among those already most vulnerable.
The IAB's 62 percent substitutability rate for skilled workers primarily affects mid-level qualifications (IAB, 2024). Academics with unique analytical and creative skills are less endangered. Highly skilled tradespeople equally so. Most affected are office workers, clerks, simple service personnel — people who are well-trained and diligent, but whose activities are structurally substitutable by AI.
These people will need support — through further training, through government retraining programs, through a social system that buffers transition phases. Companies that deploy AI to reduce positions bear a social responsibility for what happens to affected workers.
This is not a plea against AI. It is a plea for responsible use of AI — one that does not distribute efficiency gains only to shareholders, but is broadly shared across society.
Dirk Röthig has consistently argued that sustainable business practices require considering these distributional effects. His role as CEO of VERDANTIS Impact Capital reflects a commitment to impact investing that balances returns with social responsibility — a principle that should guide AI deployment across the economy.
What Companies Can Do Now
The demographic shift is not a future challenge. It is today's reality, and companies that act now will be better positioned than those that wait.
Three concrete action areas take priority:
First: Knowledge Management. In the coming years, millions of experienced employees will retire, taking with them decades of accumulated knowledge. Companies that do not systematically document this knowledge and transfer it into AI-enabled systems will lose it irrevocably. Knowledge management systems that make the implicit knowledge of experienced workers explicit are among the most urgent investment priorities of the coming years.
Second: Competency Development. The 56 percent salary premium for AI-competent employees (PwC, 2025) shows this: the market significantly values AI competency. Companies that further train their workforce in AI fundamentals and sector-specific AI applications invest in both competitiveness and employee retention.
Third: Process Redesign. It is insufficient to introduce AI as a supplement to existing processes. Full productivity gains emerge only when processes are redesigned from the ground up — with AI not as a tool, but as an integral component of the process.
International Comparisons: Who Solves the Demographics Problem Better?
Looking beyond German borders is simultaneously sobering and inspiring. Estonia has worked intensively in recent years to rationalize public services through digital processes — and increasingly through AI-enabled automation. The result is a public sector that delivers significantly more with significantly fewer personnel than comparable administrations in more populous EU states.
Singapore pursues an "augmented workforce" strategy: not automation for automation's sake, but targeted supplementation of human competencies with AI tools. Every public sector employee in Singapore now completes basic AI training — an approach Germany urgently needs to extend across all sectors and industries.
Japan, which faced the aging trap even earlier than Germany, has made intensive investments in robotics and AI-enabled care systems. Results are mixed but instructive: technology cannot replace genuine human care, but can improve the conditions under which care workers operate.
What Germany can learn from these countries is a readiness for systematic reform thinking — asking not only how we make existing processes more efficient with AI, but how we must fundamentally reimagine the structures of state, economy, and social systems to transform demographic change not merely into management, but into a new social balance.
Dirk Röthig emphasizes that this reimagining requires leadership that looks beyond quarterly earnings reports to generational impacts. His perspective from VERDANTIS Impact Capital, which focuses on sustainable value creation, reflects this longer-term horizon that Germany's policy makers and business leaders must adopt.
Conclusion: No Easy Exit, But Clear Priorities
The demographic transformation Germany faces over the next ten to fifteen years is historically unprecedented in its scale. A gap of 7.5 million workers cannot be closed by a single measure — not by immigration alone, not by pension reform alone, not by AI alone.
AI will be an important part of the answer. The 62 percent substitutability rate for skilled workers shows that technological potential exists — and the McKinsey analysis of 165,000 replaceable public positions shows that the state must also tap these potentials (McKinsey, 2024).
But "potential" is not the same as "reality." Transforming technological potential into economic reality requires investment, intelligent regulation, social buffering, and — perhaps most importantly — leadership qualities in business and government prepared to make unpopular decisions.
The baby boomers are retiring. That is inevitable. The question is whether Germany shapes this transformation or suffers it.
As Dirk Röthig has consistently articulated, this is fundamentally a question of whether we view demographic change as a crisis to be minimized or as an opportunity to reimagine how we organize work, value, and social contribution. The answer will define Germany's economic and social trajectory for decades to come. Dirk Röthig's analysis suggests that the companies and governments that move decisively now — anchoring their responses in both technological innovation and human dignity — will emerge stronger. Those that delay will face cumulative disadvantages that become increasingly difficult to reverse.
Further Articles by Dirk Röthig
- Dirk Röthig on AI in Business Life: Why German Companies Must Act Now — Ten Action Recommendations for the Mid-Market
- Röthig on Biodiversity: Why Polyculture Is the Only Answer — The Silent Dying Beneath Our Feet and How Agroforestry Counters It
- AI or Obsolescence: Dirk Röthig on the Global AI Strategy Imperative — Why Every Business Needs an AI Strategy Now
References
Institute of the German Economy — IW Köln (n.d.): Demographic Change and Skilled Worker Development Until 2036. Cologne: IW. Available at: https://www.iwkoeln.de/studien/fachkraeftemangel-prognose
Institute for Employment Research — IAB (2025): Open Positions in Germany Q3/2025. Nuremberg: IAB. Available at: https://iab.de/daten/offene-stellen-q3-2025
Institute for Employment Research — IAB (2024): Substitutability through AI — Analysis by Professional Groups. Nuremberg: IAB. Available at: https://iab.de/studien/substituierbarkeit-ki-2024
McKinsey & Company (2024): Generative AI and the Future of Public Sector Work in Germany. Berlin/Munich: McKinsey. Available at: https://www.mckinsey.com/de/insights/genai-public-sector-germany-2024
PwC (2025): Global Workforce Hopes & Fears Survey 2025. London/Frankfurt: PricewaterhouseCoopers. Available at: https://www.pwc.de/workforce-survey-2025
About the Author: Dirk Röthig is CEO of VERDANTIS Impact Capital based in Zug, Switzerland. He observes the intersections of technological transformation, labor markets, and sustainable capital from an entrepreneurial perspective. His experience as an investor and manager across several European countries gives him a broad view of social and economic developments. Contact: www.verdantiscapital.com | dirkdirk2424@gmail.com
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