2023-08-29 06:00:05
QWhether or not we share the currently hotly debated idea that Germany is the new “sick man of Europe”according to the expression popularized by The Economist in 1999 and taken over in mid-August by the British magazine, it must be admitted: the “made in Germany” has reached the end of a cycle.
The culprits of this relative decline are neither the Covid-19 pandemic nor the war in Ukraine, which have only revealed it: the German economy was showing signs of loss of competitiveness as early as 2018, perfectly identified by economists at the time. Along with aging infrastructure and a loss of administrative efficiency due to lack of investment, the composition of the industry itself was beginning to gray. Cheap Russian fossil gas has perpetuated a structure marked by old specialities, which consume a lot of energy, such as chemicals, steel, glass and ceramics.
Blinded by the export success of their machines and thermal sedans, the Germans have largely missed out on the fundamental breakthroughs of the 2010s: the mobile Internet, the digitization of the economy, the electrification of equipment and the slowdown in globalization. The best-selling vehicle in the world today is not the Volkswagen Golf, it is the Tesla Model Y: above all a computer on wheels, powered by batteries, an extension of the smartphone. The heart of the vehicle is not the engine, but the program, which continuously analyzes and compiles road data, battery data and individual driver preferences.
China and the United States now want to replace their imports with goods produced at home. Individual data, long scorned by Germany, is the new fuel for industry thanks to artificial intelligence. The Chinese command economy has completely appropriated some of the specialties where German companies were once at the forefront of the world, such as solar panels and wind turbines. On the other side of the Rhine, expensive energy and the aging of the population have become serious handicaps.
Cultural assets
Should we then bury the « made in Germany » ? This would be to forget that the German economy has recovered from several crises in the past, thanks to traditional forces. One of them is the stability of the middle class, which has so far not lost its ability to reach compromises. This can be explained in particular by its astonishing network of societies (“associations”), which link society at all levels. This practice of social dialogue always guarantees a great capacity for adaptation to civil society and companies. This was particularly evident during the large waves of refugee arrivals in 2015 and 2022, even if the rise of the far right is a threat to be taken very seriously.
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