At this points it looks like Germany is almost allergic to innovation.
Their government introduces more bureaucracy for companies, discouraging investments there. Berlin had a chance to take #1 spot as the tech capital of Europe post-Brexit, instead we rarely see any new unicorns coming from there.
Auto industry is another example - Volkswagen and Volvo groups are #4 and #5 when it comes to battery-only electric cars, and they're behind Tesla, BYD and SAIC (both Chinese). They're not innovators, they're still behind and I don't know if they'll catch up.
As an EU citizen I feel more and more negative about the economic future here, with UK having left and the biggest countries (Germany, France, Italy, Spain) struggling to stay relevant, especially in tech industry where AI can soon turn cause a major power shift.
> At this points it looks like Germany is almost allergic to innovation.
It is ultimately the German culture that is to blame. Germans are way too conservative and risk-averse. And pessimistic to boot. You can say all you want about bureaucracy and all that ease-of-doing-business gibberish, but ultimately it is simply that Germans do not believe they can actually innovate and are too scared to take the risk. And this is true across the whole of society, from the plumbers to the board members of Siemens and Bosch.
I could write a whole book about the problems with German culture. This is really only one aspect of a much bigger issue.
I suppose a large component of this is that it's an ageing society, with a median age of 47 - second only to Japan, excluding microstates.
Maybe it's just a very German thing to not have too many children - if it weren't for immigration, the country would have peaked in population in the 70s.
Germany also has a housing crisis at the moment, at least in the major metro areas where the jobs are.
Tough to increase native population when you don't build enough housing because you have CO2 caps, and you also turned the existing housing stock in a speculative casino table designed to enrich the few asset owners and the banks, and hoping unrestricted immigration that will suppress wages and prop up housing prices enough to get economic "growth".
Basically, Germany is just burning the candle on both ends, economically speaking.
I guess germany's ambition has been wholly crushed following ww2. Certainly an interesting effect. All the more surprising that they managed to aspire to so much when it comes to the EU.
West Germany had a very dynamic, bustling era in the decades after WW2. The foundation established there made them the world's top export economy pound-for-pound and one of the elite manufacturing economies. If they're lacking for ambition nationally-culturally, that would be a more recent event (post Euro).
I would speculate that there is cultural identity and dynamism value in having your own independent currency, just as there is in having your own language.
Germany's economy for example would be more potent if they weren't on the Euro. Artificially cheap exports is like a sugar high that is ultimately unhealthy for them, they have ridden that horse too far (relied on it to too great of an extent).
> As an EU citizen I feel more and more negative about the economic future here
Yea, it's rather tragic. It's especially visible in tech sector. There is basically no success large player/story in EU (Spotify is more licensing and Skype was moved out) and instead of fixing the environment, EU just adds regulations and fines giants from US.
Let's regulate metaverse, let's regulate AI.... Large players from overseas will pay lawyers and small ones will avoid EU and local ones are stifled.
Tech ... nothing. Automotive ... will be killed by Chinese EVs (good luck with tarifs when most profits of domestic OEM are from Chine)... Manufacturing... Most of it is gone, but some are still hanging on (Siemens et al). I guess there is a fasion/brand and turism.
The Human race is basically screwed and civilization will collapse in a few decades anyway. Most of your children's lives will be spent either starving, freezing, drowning, burning or fighting.
> At this points it looks like Germany is almost allergic to innovation.
> Their government introduces more bureaucracy for companies, discouraging investments there.
I made the mistake of trying to build a startup in Germany. Not only is the overall total level of taxation absolutely killing us, not to mention the absolute lack of R&D support that is available almost everywhere else in the EU, the local tax authority just handed me an assessment for 2024 and pls pay up in 6 weeks time.
I’m writing them a “no, thank you” note because I’m shutting up shop. We are self funded, were about to reach MVP and look for some seed funding, and the German taxation essentially killed us at short notice.
There are two types of businesses that can work in Germany: small businesses and massive enterprises. Everyone else is forced to stay in their place.
That is at odds with the observation that the German Mittelstand arguably carries the country’s economy in large parts. There are many world leaders there, hiding in niche markets. For how that lasts remains to be seen.
The German Mittelstand model is indeed successful for those organisations that fit that model. Very often, many of the properties that make the Mittelstand work are not that successful for startups.
My personal story is just anecdata, but the German (and European, in general) startup stories are relatively few and far between, so I know I am part of a wider pattern.
It is clear that the EU Regulates (and taxes!) whilst the USA innovates. Once I dig myself out of this taxation hole I’m trying again in the USA.
For Europe's sake I hope the same thing doesn't happen to Germany that happened to Detroit, as the world moved on and it wasn't able to innovate fast enough to keep pace.
Not sure but from what I've read it's a pain and takes several weeks. Inferior cycling infrastructure too. Though I still love visiting the place. Certainly beats NL when it comes to mountains!
I wonder how much age and general ossification are playing a factor.
Germany is essentially the oldest nation in the world at the median (very close to or beyond Japan's figure). The median closing in on being 50 years old, is going to tend to crimp the output of the labor base vs the population scale (active workers vs retired ratio). The only offset to that is either extreme productivity increases (have to make your remaining workers far more productive), or immigration.
I rarely hear anything about the kind of high-skill immigration efforts that, for example, Canada is known to pursue the past few decades. Germany should be a tech juggernaut.
You haven't realized yet the EU is basically a temporal version of the USSR? Watch closely how every power mechanism slowly gets roped into the hands of Brussels.
That explains why the UK is such a success story. They managed to avoid the tight grip of Brussels. The inflation rate in the UK is significantly lower than in the EU due to the foresight of competent politicians like Nigel Farage and Boris Johnson.
Germany is in an overall tricky spot right now – and likely at the beginning of a long term, downwards trend. It’s the only major EU country whose economy shrank last quarter, it’s mired in endless bureaucracy and red tape and its governing coalition is adding to the problem by discontinuing existing (nuclear) energy supplies, introducing cumbersome legislation and having an overall agenda that purely focuses on redistribution with no concern for value generation.
Germany had its Heyday when the technologies it specialised in – namely cars, industrial equipment, and components where at the peak of the technological demand curve. But this peak has long ago moved to software and Germany has nothing to offer in this regard (yes, I am aware of SAP.)
Having said that – and despite what this article says – I’m confident that Germany’s car manufacturers will be able to leverage their (in many regards world leading) abilities to succeed in the electric car sector. But Germany’s economy as a whole needs a fundamental change of direction if it is to succeed in the next decades.
SAP is one of the worst pieces of software I've had the misfortune of using in multiple companies that I've worked for in the past 10 years. I'm not sure it should be used as a positive example.
Fair - but they've created a piece of software that has become the backbone of many of the world's largest company's processes. And, as far as vendor lock-in goes, they are unbeatable. Adopting SAP alone is a multi million project with 20+ SAP consultants and once you've introduced it, there is nearly no way to rip it out.
The software itself may be bad - but their ability to capture value is incredible.
I guess "capturing value" is equivalent to a "rentier oligarchy". Aka the thing you have in the US.
Looking at the timescales of climate chaos I'd say European social democracies will not be the worst place to be for the next 30years (and no amount of software will help you unless you are part of the oligarchy...).
And if you think we'll all freeze and starve: if we do as the US currently tells us (this is indeed a problem) we can still burn a lot of lignite (which is likely not much worse than leaky fracking fields....).
>I guess "capturing value" is equivalent to a "rentier oligarchy". Aka the thing you have in the US.
It really isn't equivalent, this opinion just reads like copium.
If I jump ship to a better paying job to capture more value, am I now the "rentier oligarchy"? No, I just move to where the money is as it benefits me and also benefits the state who's taxing me to fund social welfare.
Similarly it's the job of any country to do the same and orient its economy to where it can capture more value (hopefully in an ethical and environmentally friendly way), as staying behind and falling to do so means less wealth, less tax revenues, and less welfare for its citizens.
>we can still burn a lot of lignite
It will also heavily reduce your lifespan, which is good for the state I guess, as that means less pensions will have to be paid out.
> It really isn't equivalent, this opinion just reads like copium.
So what is "capturing value" other than rent? And yes, I would hope that water wars were copium, but they might be a bitter reality soon...
> If I jump ship to a better paying job to capture more value, am I now the "rentier oligarchy"?
Yes that's fine, I guess you are anyways not very interested in community (which seems to be the thing with many people around...) - btw: what exactly will happen in that place if you have a car accident and can't work for 1-2 years?
> No, I just move to where the money is as it benefits me and also benefits the state who's taxing me to fund social welfare.
Good. But don't complain once you wake up in a dystopian, oligarchic nightmare.
> as staying behind and falling to do so means less wealth, less tax revenues, and less welfare for its citizens.
The US is clearly leading in the money metric and yet most metrics much more associated with human welfare (such as lifespan) are trending down... In that metric even Cuba is now better than the US ... There might be more to that than you assume...
> It will also heavily reduce your lifespan,
I guess either it's ChatGPT here or you are very deep in copium-territory...
Offering better products and services than your competition.
>Yes that's fine, I guess you are anyways not very interested in community
Where does it say I can't care as much about the community despite me getting a better paying job? In fact, me getting a better paying job helps my community because I'll spend the extra money there at shops, bars, cafes and barbers.
You're clutching at straws at this point embarrassing yourself further.
>Good. But don't complain once you wake up in a dystopian, oligarchic nightmare.
Damn, I didn't know Austria and Poland are distopic nightmares.
>The US is clearly leading in the money metric and yet most metrics much more associated with human welfare (such as lifespan) are trending down
No, Switzerland and Luxemburg are leading the money metric and yet are far from living nightmares.
You keep trying to die on this whataboutism hill by brining in the US in the discussion at every point even though I never mentioned it once.
>I guess either it's ChatGPT here or you are very deep in copium-territory...
Guess breathing in all the lignite Feinstaub got to you good, huh?
Ok, now look back to the life of ordinary swiss when things around were not good (aka worldwar 2 rationing. do you really think germany, france and italy will not pull a ukraine/belarus on them if they need to?) ...
Can you tell me, how normal people will prosper in these countries if things go bad around? Spoiler: they won't.
> You keep trying to die on this whataboutism hill by brining in the US
For all matters, people in Germany are EU citizens. They go down and up with the EU. I don't think it is a relevant comparison what some EU-landlocked microstates/money-laundromats do now if you think about the future: There is the EU. There is the US. There is China. There is the 3rd World. Largely EU might not be the worst bet all things considered (incl. now)...
> Damn, I didn't know Austria and Poland are distopic nightmares.
And now tell me about the innovative industries there which germany doesn't have?
OK mate, you keep cherry-picking some random unrelated facts for some cheap whataboutism, thinking that makes an argument. I'll end my conversation here to save my sanity thank you. Good evening and enjoy your lignite.
> I’m confident that Germany’s car manufacturers will be able to leverage their (in many regards world leading) abilities to succeed in the electric car sector
sadly politicians give in to their lobbying so it seems they are betting on fossil fuel cars until it's to late, because it makes more profit
Manufacturing cars by assembling parts from 1000+ suppliers is inherently inefficient. This is fine as long as every car company uses the same model. BYD doesn’t; they make 70% of the components used in their cars themselves. This gives them a fundamental cost advantage and European car shoppers are extremely price sensitive.
Personally I don't like this shift to more parts being produced exclusively by the car manufacturer. It means the only real place to buy the part is the OEM who has an interest in selling me a whole new car. Meanwhile Denso and Bosch and whoever wouldn't mind just selling me a part through the many retail car parts stores.
> It’s the only major EU country whose economy shrank last quarter, it’s mired in endless bureaucracy and red tape and its governing coalition is adding to the problem by discontinuing existing (nuclear) energy supplies, introducing cumbersome legislation and having an overall agenda that purely focuses on redistribution with no concern for value generation.
This is pretty spot on. People voted socialism, people got socialism, shrouded in green utopianism. There is no positive vision of the future, only guilt and shame about the things we consume and hare-brained schemes about where energy is supposed to come from. Redistribution without concern for value generation sums it up pretty well.
I don't know what you are talking about. Greens are probably the most hated party in Germany. Second place goes to AfD but only because they welcome literal Nazis.
SPD is a CDU clone. The word 'social democrat party' is the socialist equivalent of north korea calling itself democratic. No that is not a socialist party. It is actually a conservative party. 50% of the votes went to conservative parties. 14% to greens. 11% to liberals. 10% to AfD and then a whopping 4.9% for the actual socialists. Let me remind you that you need 5% to enter the parliament so the socialist party that so many people warned against is so unpopular it isn't even eligible to participate in national politics.
So my conclusion is that you are looking for a boogeyman to blame.
Europe has been seeing a collapse in per-capita energy availability [0] since 2007. The invisible hand of the market is probably working out out what hard cuts are needed to make the best use of what is still available. It wouldn't be remotely strange if Germany was deindustrialising.
Without affordable energy prices, Germany just can’t compete with Korea (LG, Hyundai, etc), China or even the US. They’re in big trouble - especially when the tax revenue needed for their generous social benefits collapse. They need to sort this out asap because once you deindustrialize, you not only lose your facilities (deterioration), but the know-how (US as case in point).
Efficiency and electrification will also reduce it. As we try to get to net zero we're expected to double or triple the supply of electricity, while still reducing primary energy as we reduce the colossal amount of fossil fuels wasted as heat during burning them.
German car manufacturers need to start taking Chinese competitors and BYD in particular way more seriously. For the past two decades they have been able to coast and keep their sales numbers up by minimally tweaking their old designs.
German car companies are not vertically integrated and are bad at software. They will get beaten badly on price and software quality, and consumer loyalty won’t last. They will have to reinvent themselves if they want to survive.
I generally agree with that. Though I'm not sure it's the right focus when it comes to what makes a car desirable. Looking at BMW's I series cars or Mercedes EQ(X) cars, they are absolutely solid and attractive offerings with the "traditional German" qualities of built quality and refinement. Yes, their software may be lacking, but I'm not quite sure that's the differentiator when it comes to cars.
Software isn't just a pretty UI. It also covers (partial) autonomy, emergency breaking, traffic sign recognition, drowsiness monitoring, automatic parking, air bags, voice control and much more. It's not a differentiator today because all premium car brands are very bad at software. Cars are not computers on wheels yet, but that's the direction. Sensors are dirt cheap now so cars get loaded with them and software becomes a big differentiator.
BMW makes pretty good cars, but most Europeans can't afford them. In Germany (which has favorable taxes on cars) the average new car costs €36,000. BMW has nothing at that price. Chinese cars will probably first compete in the budget segment. Only after having established a reputation for making good cars will Chinese brands try to compete directly in the 50k-100k segment, which has consumers who have car ownership as a big part of their identity.
If you look at the best braking cars (fastest 60 to 0 and smallest distance), excluding the supercars and hypercars, it's all Audi, Mercedes, BMW and especially Porsche.
A lot can be criticized about german cars but not braking well isn't part of it.
> In Germany (which has favorable taxes on cars) the average new car costs €36,000. BMW has nothing at that price.
A BMW 1-series start at 30 K EUR. Sure it's a "little" car but so are many of the cars people shall buy at 36 K EUR.
Unsurprisingly the BMW 1-series is nearly the best selling BMW series in the EU: neck to neck with the 3-series.
There are sure a lot of BMW 1-series where I live now (a country neighboring Germany).
I don't think BMW, VW and even Mercedes are going to give up that easily. They are trying to shift to EVs and I wouldn't rule out a country who's been producing the finest cars for decades yet (especially jot VW, who's not exactly been the first to adapt new technologies).
EU being started in the 1990s was a huge mistake. They need Big Fiscal like the US so they can. get rich again, but their constitution largely prohibits it. If they did an infrastructure build-out it would be amazing cause they are currently way more efficient at building things than we are.
Anti nuclear is also stupid, but with a big infra push France would simply build so much nuclear Germany would begrudgingly import everything they need. Good enough for now and also hilarious.
There is a thing I rarely see on HN in discussions about nuclear power in France. French nuclear "success story" is based on colonialistic exploitation of African uranium mining. With the increase of US, Chinese and Russian influence in Africa, France may one day find themselves in a position where they won't have cheap fuel for the power plants.
This is not a thing on HN because this is not a thing in real life. Over the sixteen-year period between 2005 and 2020, nearly three-quarters of the 138,230 tonnes of natural uranium imported into France came from four countries:
Kazakhstan: 27,748 tonnes (i.e. 20.1%);
Australia: 25,804 (18.7%);
Niger: 24,787 (17.9%);
Uzbekistan: 22,197 (16.1%).
Only Niger is in Africa, and France has 10 years stored in case of geopolitical conflicts.
I would not generalize to the whole of Europe. This is true of Germany, which dictates what happens in Europe. But even France is more dynamic. And if you look further North or East or South you also see more willingness to take on risk.
Every Germany manufacturer has EV models, and there are a quite a manufacturers so that means a there lot of German EV's to choose from. That's because their government has put in strong tax incentives towards EV's. And most Germans seem to prefer to buy German cars and that goes for EV's, so you see of lot of German EV's in Germany.
But ... all the German EV's I saw were their existing ICE car bodies retrofitted with batteries and an electric motor. Right down to still having the exhaust hump going down the centre of the car. Even to a pleb like me it was obvious this layout sucked compared to say a something that was built from the ground up to be an EV, like a Tesla. Move outside of Germany, and German EV's are rare - true EV's like Tesla's dominate.
I guess the cost of re-doing the car body design must be huge. But until they do it I'd avoid them. And I'd say if they don't make the investment, they are doomed to suffer the fate of the dinosaurs.
I dont see a problem even if they are retrofitting cars. German cars are still higher build quality than Tesla. But if german auto industry is going to have trouble upgrading batteries in 10 years, that is a concern.
German EVs are not rare in the rest of europe either
Their government introduces more bureaucracy for companies, discouraging investments there. Berlin had a chance to take #1 spot as the tech capital of Europe post-Brexit, instead we rarely see any new unicorns coming from there.
Auto industry is another example - Volkswagen and Volvo groups are #4 and #5 when it comes to battery-only electric cars, and they're behind Tesla, BYD and SAIC (both Chinese). They're not innovators, they're still behind and I don't know if they'll catch up.
As an EU citizen I feel more and more negative about the economic future here, with UK having left and the biggest countries (Germany, France, Italy, Spain) struggling to stay relevant, especially in tech industry where AI can soon turn cause a major power shift.