As the world rapidly digitises and the
automotive industry embraces electric cars, Germany risks falling
further behind countries such as China that have developed their
technological capabilities. On a comparative basis, Germany’s labour
costs exceed other manufacturing regions. Adding to its struggles is
stagnant labour productivity as Germany’s aging population retires or
shifts to part-time work. This trend doesn’t bode well given Germany’s
historic strength producing leading-edge automobiles and dominating the
manufacturing of equipment, chemicals and pharmaceuticals.