The German economy faces a critical juncture, according to Princeton University economist Markus Brunnermeier, who is sharply criticizing the nation’s reluctance to fully embrace technological shifts and adapt its industrial policies accordingly. In an interview with “Der Spiegel”, Brunnermeier argued that Germany’s continued investment in legacy industries and technologies, particularly reacting to current market fluctuations, risks locking the nation into obsolescence.
“We cannot exist on an island. The world is changing” he stated, directly referencing the current challenges surrounding electric vehicle adoption as an example of a situation where defensive, reactive policy – such as increased support for combustion engine exports – provides a false and ultimately detrimental solution. Instead, he proposes a far more agile and forward-looking approach to economic policy.
Brunnermeier is scheduled to address a symposium hosted by the Federal Ministry for Economic Affairs and Climate Action in Berlin on Monday, where he will formally advocate for a more “resilient” economic framework – one defined by adaptability and an open embrace of innovation rather than an adherence to entrenched practices. He sees a clear opportunity for German economic resurgence predicated on systemic change.
A core element of Brunnermeier’s diagnosis focuses on the rigidity of the German labor market and the limitations of its vocational training system. He points to an over-reliance on highly specialized roles – bank clerks, insurance brokers, tax specialists – that are increasingly vulnerable to displacement by artificial intelligence. “These roles could become obsolete” he warned.
His proposed solution is a restructuring of vocational training towards a broader foundational skillset. Brunnermeier suggests a shift towards providing a general commercial education, upon which individuals can then build specialized expertise as needed, allowing for easier transition between evolving industries and minimizing the risk of widespread job insecurity. He emphasizes that the concept of a lifelong, fixed career is increasingly an artifact of a bygone era and that Germany needs to fundamentally rethink its approach to workforce development to maintain competitiveness on a global scale.