When people talk about digital transformation in Germany, they often think about start-ups in cities like Berlin. But innovation takes place everywhere in Germany. Family companies, which are often not in big cities, are the real drivers of digital transformation. And when it comes to the Internet of Things or Industry 4.0, these companies have a special need for skilled workers at every level, from trainees to experienced specialists. A study by the German Economic Institute in Cologne for the Foundation of Family Businesses looks at this shortage of skilled workers and ways to address it. It examines four occupational groups that play a key role in digitalisation, and identifies areas where skilled workers are needed in Germany and locations where they are abundant. There are shortages in all four groups among university graduates as well as trainees. For example IT specialists are needed in cities like Traunstein, Heilbronn or Emden, but are looking for jobs in Elmshorn, Berlin and Saarland. It’s much the same for machinery and vehicle technicians: Both university- and company-trained workers are scarce in cities like Kempten, Bad Hersfeld and Nordhorn, but they are looking for jobs in Meschede, Braunschweig and Berlin. It’s the same story for research and development jobs as well as construction and production control. Mechatronic, energy and electro-technicians are especially rare and are needed everywhere. What can be done? The researchers at the Cologne institute have a few ideas: First of all, family companies should recruit new staff outside their home regions. They should also expand their presence in social networks. Political leaders must act as well: Relocation assistance and affordable housing would increase the mobility of skilled workers and trainees. Young people finishing secondary school must learn that a university degree is not the only path; jobs with non-academic training offer good prospects, too. The process of recruiting skilled workers from abroad must be simplified. A customised immigration law for skilled labour would help. Each of these measures could help companies to drive innovation in future as well as today, so that they remain competitive and safeguard jobs in Germany.