How frontier technologies are reshaping jobs in Germany

Rapid advances in artificial intelligence (AI), machine learning, and robotics are transforming the workplace—but not always in the ways public debates suggest. A new IZA Discussion Paper by Sabrina Genz, Terry Gregory and Florian Lehmer offers a data-driven perspective on how technology is actually embedded in jobs today, shifting the focus away from hypothetical automation risks toward the skills workers currently use.

At the core of the analysis is a novel indicator, the Occupational Technology Skill Share (OTSS), which measures the proportion of skills in an occupation associated with three broad technology categories:

• Manual skills: Skills used to perform tasks without digital support—such as manually controlled equipment or non-IT-supported tools. These are characteristic of work prior to the Digital Revolution.
• Digital skills: Skills required to use digital tools that support or indirectly control work processes—such as CRM software, ERP systems, or computer-controlled machinery. These reflect the computerisation wave since the 1970s.
• Frontier skills: Skills related to advanced technologies that can perform tasks autonomously or semi-autonomously—such as AI systems, machine learning, collaborative robots, or digital twins—associated with the Fourth Industrial Revolution.

The measure is constructed using detailed information on occupational skills from expert database BERUFENET, provided by the German Federal Employment Agency. To ensure consistent classification, the study combines this expert-based information on job-specific skill requirements with modern AI tools to enrich and standardize skill descriptions. These harmonized descriptions are subsequently classified using supervised machine learning methods.

The findings show that, despite growing attention to AI, manual and digital skills continue to dominate the workplace. In 2023, manual skills accounted for the largest share of job content (42%), followed by digital skills (38%), while frontier skills made up about one-fifth (20%).

However, this aggregate picture masks important differences across occupations. Frontier skills are concentrated in technical, engineering, and scientific jobs, whereas digital skills are widely used across administrative, service, and sales occupations.

At the same time, the study documents a clear shift over the past decade. Between 2012 and 2023, frontier skills expanded across most occupations, while the relative importance of manual and digital skills declined. This indicates that advanced technologies are diffusing broadly through the labor market rather than remaining confined to a narrow set of high-tech roles.

Importantly, these changes should not be interpreted as indicating a direct risk of job loss. The developed classification identifies which skills are related to frontier technologies, but it does not establish whether these technologies complement or substitute labor. When examining the employment growth across occupations with varying frontier skill intensity, the study documents a U-shaped pattern: occupations with either very low or very high increases in frontier skills tend to experience stronger employment growth. This suggests that frontier technologies may both complement highly specialized work and leave certain manual or service-oriented jobs relatively unaffected.

Overall, the study highlights that technological change is already deeply embedded in everyday work—but unevenly so. For policymakers, the message is clear: preparing workers for the future requires more than just advanced AI training. Broad-based digital skills remain essential across most occupations, while frontier capabilities are becoming an increasingly important—though not exclusive—component of the modern workforce.

Download the full study here.