THE INCREASING IMPORTANCE OF GERMANY

I opened an office in Berlin in 2000 and have conducted business in that city since 1986. Times were very different then. Some of my colleagues took a lot of convincing that we should have an office there. We did so for a number of reasons. One of them is that Germany has approximately half of the worlds’ post-doctoral talent in the hard sciences. This generates investment opportunity. I also took a long term view that Germany would regain its prewar(s) status as an economic and political powerhouse and so it has proved to be. Interesting to note that the new French President flew to Berlin within a week of taking office.

There is a report from Dr Clint Laurent of Global Demographics noting that some manufacturing production is moving from China to Eastern Europe. “There is a large underused workforce…..eastern Europe’s GDP will grow very rapidly as a result of the change in the size of the labour force of the Chinese economy”.

My long term analysis was based on the fact that East European countries are like the Mexico of Europe: cheap skilled labour, proximity to markets, the Euro (much maligned at present), great transport infrastructure, and huge manufacturing infrastructure in Germany which leads the world. Some of this is happening in former German lands: all of it is happening in Berlin’s former economic hinterland.

Add German manufacturing competence and product innovation to low cost labour: that will produce a world powerhouse of the future provided the Euro does not appreciate in value too much. Keeping some countries on life support might be a small price to pay for such a prize.

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