Germany’s Economic Renaissance, Jack Ewing

How did Germany do it? How did it steer through the economic storms of the last several years and come out stronger than before? What is the secret of a country with high labor and energy costs in maneuvering successfully in global competition?

Jack Ewing takes a crack at answering those questions in his book Germany’s Economic Renaissance (Palgrave, 2014), primarily by drilling down into the experiences of several leading corporate leaders in Germany, who share their insights about success.

The trick, as Ewing tells it, is to find a market niche, pour R&D into creating the best product in it, and stick with it while dominating the world competition. In a country that gets half of its GDP from exports, this formula is vital. And despite the fact that what Germany makes is not cheap, it makes things the world wants.

Success begins at home. Over many decades Germans have developed a formula for maximizing resources to be competitive globally. Management-labor relations have been guided by a cooperative paradigm keeping conflict under control. Germany’s labor force is funneled through a job training apprenticeship system, which produces capacity and innovation. German managers are close to their customers no matter where they are.

The result is Germany’s superpower export machine, which has its presence all over the globe.

Ewing points at a few vulnerabilities in his analysis. He sees one in the excessive dependency on the automobile sector and its related networks. Another appears in the relatively static domestic service sector. And Germany shares a challenge with the United States—investing more in infrastructure and education at home. Then there is the banking system, which needs an overhaul. Whereas the U.S. economy draws a fair amount of its fuel from equity markets, Germany remains over banked and under developed in venture capital formation. Much of that is a legacy of the days of the interlocking economic-business-banking system of yesteryear. But that is now in transition by necessity.

Can anything be lifted from the German model to other countries—particularly the United States? Not entirely. A lot of Germany’s power is built in to the decades old socio-cultural web. But there are modules. Job training-apprenticeship programs are becoming widely popular now in the U.S. business network. An effort to revive the manufacturing base in the United States is part of a look at Germany’s experiences. Perhaps the cheaper energy sector may contribute to more innovation.

A former German foreign minister—Guido Westerwelle—once said about Germany’s economic competition with the United States, “wir müssen Amerika nicht unbedingt kopieren sondern kapieren.” (we don’t necessarily have to copy the United States—rather understand it). The United States has had a different path to its pinnacle of economic success, but it certainly can take a look across the Atlantic to understand what tools are needed to compete today—including those made in Germany.

The views expressed are those of the author(s) alone. They do not necessarily reflect the views of the American Institute for Contemporary German Studies.

Jackson Janes

President of AICGS

Jackson Janes is the President of the American Institute for Contemporary German Studies at the Johns Hopkins University in Washington, DC, where he has been affiliated since 1989.

Dr. Janes has been engaged in German-American affairs in numerous capacities over many years. He has studied and taught in German universities in Freiburg, Giessen and Tübingen. He was the Director of the German-American Institute in Tübingen (1977-1980) and then directed the European office of The German Marshall Fund of the United States in Bonn (1980-1985). Before joining AICGS, he served as Director of Program Development at the University Center for International Studies at the University of Pittsburgh (1986-1988). He was also Chair of the German Speaking Areas in Europe Program at the Foreign Service Institute in Washington, DC, from 1999-2000 and President of the International Association for the Study of German Politics from 2005-2010.

Dr. Janes is a member of the Council on Foreign Relations, the International Institute for Strategic Studies, and the Atlantic Council of the United States. He serves on the advisory boards of the Berlin office of the American Jewish Committee , Beirat der Zeitschrift für Außen- und Sicherheitspolitik (ZfAS), the Robert Bosch Foundation Alumni Association, and the American Bundestag Intern Network (ABIN) in Washington, DC. He is a member of the Board of the German American Fulbright Commission and serves on the Selection Committee for the Bundeskanzler Fellowships for the Alexander von Humboldt Foundation. He is a member of the Cosmos Club in Washington DC.

Dr. Janes has lectured throughout Europe and the United States and has published extensively on issues dealing with Germany, German-American relations, and transatlantic affairs. In addition to regular commentary given to European and American news radio, he has appeared on CBS, CNN, C-SPAN, PBS, CBC, and is a frequent commentator on German television. Dr. Janes is listed in Who’s Who in America and Who’s Who in Education.

In 2005, Dr. Janes was awarded the Officer’s Cross of the Order of Merit of the Federal Republic of Germany, Germany’s highest civilian award.

Education:
Ph.D., International Relations, Claremont Graduate School, Claremont, California
M.A., Divinity School, University of Chicago
B.A., Sociology, Colgate University

Expertise:
Transatlantic relations, German-American relations, domestic German politics, German-EU relations, transatlantic affairs.