The German industry is experiencing a deep structural shift, but this does not amount to deindustrialisation. Three studies – from the Ifo Institute, the German Economic Institute (IW) and the Bertelsmann Foundation – have reached this conclusion, as reported by the “Frankfurter Allgemeine Zeitung”.
A key, somewhat surprising finding is that 76 % of the gross value added in manufactured goods comes from sectors whose products have seen growing demand over the past five years. Accordingly, the vast majority of industrial firms carry predominantly expanding products in their portfolios, from pharmaceuticals and semiconductor technology to machinery.
Even in fields that are often called “crisis sectors” such as metal production and chemicals, the researchers found that growth‑oriented segments still dominate. The primary concern is the automotive industry, employing nearly 900 000 people. Competition there is tightening, and German car exports to China have halved within a few years, showing that a successful pivot to high‑growth products has yet to materialise.
The scholars urge policymakers not to protect existing structures, but to create innovation‑friendly conditions. With the working‑age population shrinking, they argue that a sustainable model could involve designing products in Germany while manufacturing elsewhere-provided that capital markets, the tax system and regulation encourage innovation.
Overall, the studies paint a nuanced picture. Oliver Falck of the Ifo Institute notes, “I would not bet against German industry. I see absolutely positive developments”.