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August 2023
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FIVE THINGS TO WATCH THIS QUARTER
Germany's Industrial Crisis
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What is happening?

Germany has been the near-dominant economic force in Europe, led by its machinery, automotive and chemical exporters. But an economy that benefitted from ‘cheap Russian gas, discounted US defence, and strong exports to China’ is now experiencing none of all three, triggering an existential crisis. Major employers, like chemical producer BASF, are ‘structurally reducing’ their German footprint even in the face of substantial state subsidies.

What to watch?

Germany, like Japan, is a master of atoms rather than one’s and zero’s, but crisis is usually the trigger for real change. German leaders have a knack for getting the big decisions right, and a renewed focus on infrastructure and technology could allow for a long-term successful pivot. It remains to be seen who will lead this shift and, crucially, when they decide to do it.

What to do?

Chiefs of staff operating in the region should continue to consider any efforts to adopt and integrate more digital technologies into their operations and services. Whether it be it through digitisation of processes or fostering digital skills within their workforce. This is not only important for the organisation to stay competitive, but also to leverage any opportunities that arise from Germany's (and the broader EU's) impeding push into digital technology.