The course must be set now for future success
Germany is at a crossroads. Although currently one of the most successful economies in the world, it can only remain so if it continues along its path of close networking between the industrial and the service sector. Germany must now set the course – in government, society and industry.
The future belongs to cross-industry networks
Networking is becoming increasingly important for a strong German economy. Many companies are already pooling their knowledge in order to develop innovations and bring them to market in a faster, more focused manner. This approach is increasingly catching on, and not just within the same industry. Businesses are finding that in order to meet customers’ requirements for highly individual products and services, cross-industry collaboration is the answer.
Cooperation with other businesses as well as with research centres and universities opens up new possibilities for manufacturers. If they are to remain competitive in Germany and abroad, they will have to broaden their product ranges, trial new working time models, and forge stable production and development networks. Moreover, they will have to invest. In times of globalisation, particular attention needs to be paid to the areas of IT and data security. At the same time, it’s important to prepare employees for digitalisation and the resulting upheavals in the workplace. After all, the demands on employees will change. Therefore, we need to invest heavily in education and training at all levels in order to equip people for their new tasks. And one thing is certain: despite all the technical progress, people will remain the cornerstone of our industrial companies.
Government must create a sustainable framework
In many companies nowadays, the potential for innovation and growth is being wasted. Overregulation and high red tape in many sectors sometimes make it difficult for the economy to operate in a forward-looking manner. To ensure future success, legal grey areas such as in data protection need to be rectified. At the same time, bureaucratic hurdles besetting, say, collaboration between industry and science need to be removed. This could be done by adapting regulations to industry standards as well as by introducing uniform templates for cooperation agreements.
But in addition to meeting these structural demands, if the state wants to retain its strong economic power, in the coming years it will have to invest on a scale which is almost unprecedented in recent history. One of the most pressing issues for Germany as an industrial location will be the nationwide upgrading of its broadband network. In more remote locations where the free market is unable to deliver high-speed internet, balanced state subsidies will have to be provided to encourage investors to connect ‘blind spots’ to the broadband network. Production and development networks between industrial companies can only deliver maximum success if full use can be made of the information and communication technology available. This is only possible with fast, reliable data connections. If the broadband network isn’t upgraded soon, the resulting disadvantages for the locations concerned will be enormous.
Apart from its productivity, the future sustainability of the German economy depends on its innovative capacity. To remain competitive, products, technologies and services have to be produced which are innovative. This challenge can only be met by German industry if industry and the research sector work together more closely. Furthermore, more support is required for the young, creative start-up scene in order to harness its expertise and experimentation. In these areas, the state is obliged to support the networking of society, science and industry – for example by means of networks, initiatives and funding instruments.
Transparency and participation for shared responsibility
In all these areas, although the stakeholders are already taking the right steps, frequently they’re not moving fast or far enough. A vital aspect for the future currently only plays a minor role in economic policy: the participation of broad sections of society in innovation and the integration of new technologies. At present, industry is faced by a considerable acceptance problem in some sectors. Many people no longer consider industrial production primarily as a source of growth and prosperity. The increased awareness of for example environmental protection and social responsibility has generated growing scepticism towards an economy that is heavily reliant on industry. This scepticism needs to be tackled with transparency and innovation. In the future, too, Germany will only be able to survive internationally if it has a strong industrial sector. Allowing the public to share in decision-making and explaining to them the opportunities and risks will be a time-consuming, labour-intensive task, yet it will be essential. Acceptance can only be created by transparency and a certain level of participation.
This involvement needs to begin before children start school. Economic matters, new technologies and how to use them could be taught at preschool centres and in the classroom in a practical, age-appropriate manner, and should be included in nursery schools’ and primary schools’ curricula. If a closer relationship were forged between industry and schools – for example by encouraging firms to sponsor preschool centres and schools, showing teachers life behind the scenes in the industrial sector, and setting up a new excellence initiative – the next generation would grow up with the view that not just industry and the state but all of us bear responsibility for a strong German economy.
Dr. Stormy-Annika Mildner
B20-Sherpa External Economic Policy