Berlin: Germany must beef up its services sector if its economic backbone of manufacturing is not to weaken, the Organisation for Economic Co-operation and Development (OECD) said in a report Tuesday.
"You have to invest in services, upskill the people in services," OECD chief Angel Gurria told a news conference.
"Otherwise, all the German industry success is going to slow down because you don`t have the same level of productivity in the two areas," Gurria said as he presented the report.
While acknowledging the success of Europe`s biggest economy in recent years, with stable growth, a robust labour market and healthy public finances, OECD pointed to "a number of challenges" facing Germany. And there was "little room for complacency."
"Labour productivity has declined, and is particularly low in services," Gurria said.
Germany`s industrial prowess is built on its cars, chemicals and precision engineering, but the economic powerhouse is less successful in the services sector, which is regarded as over-regulated and rigid.
But "there is lot of value added in services," Gurria said.
Both the OECD and the International Monetary Fund (IMF) have repeatedly called on Germany to invest in infrastructure and education, a call IMF chief Christine Lagarde reiterated while on a visit to the country on Tuesday.
Gurria also urged on the government to integrate the massive influx of refugees who have arrived in Germany in recent months with special education and training initiatives.
That "requires a substantial upfront investment, but it pays," the OECD chief said.