Germany is weakening. At the end of July, the International Monetary Fund revised its growth forecast for Germany downwards in its “World Economic Outlook”: The German economy will shrink by 0.3 percent in 2023.
One could now assume that this was to be expected after the pandemic and the Russian war of aggression and that all economies in Europe should be affected to about the same extent. But far from it: For the euro area – including the shrinking German economy – the IMF is now assuming an increase of 0.9 percent. So it is we who are undoing an even bigger growth spurt for the Eurozone.
The IMF has also raised its growth forecasts for the USA (1.8 percent) and the global economy as a whole (3.0 percent). Even Great Britain recorded an increase of 0.3 percent. Of all the developed economies, Germany alone has to record a minus in 2023.
What if we are dealing with a structural weakness in our country?
Now this would not be dramatic if it were only a temporary phenomenon. But looking ahead to 2024 only promises a slight improvement. Next year, too, Germany will lag behind most developed economies and, at 1.3 percent, will grow well below the world average.
A concern is spreading, for which there are more and more indications in the everyday life of the people in our country: what if we are not dealing with temporary effects, but with a structural weakness in our country?
At some point, the consequences of oversleeping digitization will become visible. Anyone who travels to Sweden, South Korea or Brazil quickly realizes that we are years behind. Excessive bureaucracy, layer upon layer of new regulation and the atomization of responsibility and responsibilities weigh on innovative strength, creativity, entrepreneurial spirit and ultimately our competitiveness. All at a time when a gradual deindustrialization of Germany can hardly be denied.
Germany’s economic strength is not a law of nature
Demographic change will do the rest: Even if immigration continues, we will lose a net four to five million workers by the end of the next decade. Already, more people of working age are leaving the labor market each year than we are recruiting.
The conclusion from this should actually be indisputable, but it is mined territory in Germany: we have to work more and longer. And we need to increase the (full-time) employment rate of women.
Germany’s economic strength is not a law of nature, as some seem to believe. It has to be reworked every day. We need to take our future back into our own hands by making smart, forward-looking decisions. It’s not too late for that. We are still world champions in engineering and process management. Our specialist training sets international standards. We are often envied for our medium-sized business, corporate culture and social partnership.
We need to become a society of learners again
But we will not be successful with the recipes of the past. We must – preferably yesterday, but at least immediately – invest in creativity and innovation. We need to make better use of the potential that still lies within our society by breaking down bureaucratic hurdles and rewarding, not suffocating, entrepreneurship.
And we have to use every conceivable opportunity to become a society of learners again and not of those who preserve vested interests. We can still be the ones who see the new technological possibilities not as a threat but as an opportunity. Innovations made in Germany.