On to the next economic miracle

Anyone who is currently loudly proclaiming that the measures taken during the coronavirus pandemic are the reason for the downturn in the German economy or that cities are becoming deserted must have been wandering through the years before 2020 with their eyes closed. After all, the structural disruption that is forcing industry and commerce to readjust has at best been accelerated by the pandemic. Industry 4.0 and automation have already been ensuring for several years that processes in almost all sectors have to be completely rethought, often at the expense of simple jobs. In the automotive sector, which is still a key industry in many industrialized nations, the transport revolution is reinforcing these trends.

Amazon and co. have also reported immense growth, and not just since the shutdowns, which is causing problems for bricks-and-mortar retailers in cities in particular. In the next blog post, I will outline an approach as to how a new regulation of support measures could counteract this decline. Corona is more of an accelerator than a trigger.

In my opinion, however, a readjustment of market economy structures is essential in order to stop the downturn and possibly allow the delicate seedlings of an economic miracle to sprout. The road to a social market economy is a short one from the economic miracle. In my opinion, its original guiding principles of “social security”, “social justice” and “secure freedom” are still suitable today for finding a path between a free market economy and a planned economy. However, we urgently need to find a new balance point between unregulated and state-controlled markets in order to make “prosperity for all” possible again, to quote Ludwig Erhard. This is where the scales have tipped significantly in recent years. Corona has also accelerated this trend once again, and not just in Germany. There is no doubt that the premises of the new world of work must be taken into account in a new social market economy.

It is not entirely unlikely that automation and Industry 4.0 will bring us to a point where there is less work than people who are willing to work. In my opinion, the “social security” factor must therefore be given significantly more weight in the future, especially as demographic change is also presenting the current system with new challenges. I already threw the certainly radical idea of an unconditional basic income into the ring here some time ago.

When it comes to the financial viability of such a restructuring, it is crucial not only to invest in promising technologies and innovations, but also to create a solid basis, for example by reorienting the education system, so that the next generation is prepared for a digitalized working world. After all, a country that is not particularly blessed with raw materials has to use its expertise to establish its position in a global environment. Skilled workers are therefore the best way to secure Germany’s future as an industrial location.

The state and the economy are equally challenged. Both must make good use of a significant part of the harvest they have reaped from almost ten years of upturn. And a new, broad-based start-up offensive is needed to ensure that SMEs – from bakeries to digital start-ups – remain the backbone of the German economy and are able to create well-paid and secure jobs. To achieve this, however, we must overcome the paralysis of fear that corona has put us in in many places. After all, those who pull the levers now to develop a perspective for the time after the pandemic will provide a positive impetus for society as a whole.