Word is out that Germany’s industrial base is tanking
The Federation of German Industries (BDI) wanted to know more and therefore commissioned a study from the Boston Consulting Group (BCG) and the German Economic Institute (IW).
It is now available – and the outlook is dire. It is no longer a question of “belief and opinion, but of data and facts,” said BDI boss Siegfried Russwurm at the presentation.
He also got straight to the point: “Germany has fallen behind almost everywhere. […] The years of driving the country into disrepair are now taking their toll.” Structural problems have accumulated: high energy costs, high labor costs, high corporate taxes, bureaucracy, a shortage of skilled workers – not to mention the acute geopolitical problems facing the export nation Germany. Germany has a “fundamental location problem,” concluded the association’s head.
The study he presented paints a bleak picture of the future: by 2030, around a fifth of industrial value creation in Germany will be threatened. The BDI boss specifically mentioned digitization and artificial intelligence (AI).
Additional investments of more than 1,4 trillion euros will be required to make Germany competitive again. The entire “industrial policy agenda” must be realigned – but so far nothing has really been done to address this.
The BDI president’s pessimism was shared by Michael Hüther, director of the IW, who also drew attention to various structural deficits. One of Germany’s previous strengths, the strong interlinking of the individual industrial sectors, could suddenly turn out to be an Achilles heel if one link in the chain is weakened.
It remains to be seen whether the “traffic light” coalition will heed the experts’ warnings. Sadly, given the “achievements” of German industrial and economic policy over the last two and a half years, such optimism is misplaced.
Federation of German Industries: A fifth of industrial value creation under threat – Free West Media