From the AICGS Bookshelf: The Seven Secrets of Germany: Economic Resilience in an Era of Global Turbulence
A simple question runs through this book—why is Germany different? The authors are deciphering the secrets to answer that question and, in their analysis, offer explanations for Germany’s ability to steer through challenges.
The authors are essentially looking at how Germany has managed to arrive as an economic success story against so many odds and how other countries in Europe have failed. In the wake of the global meltdown in 2008, how did Germany come out stronger? In the 1990s, when Germany was declared the sick man of Europe, how did the country turn itself around to be strong enough to weather subsequent storms?
The thesis is that Germany has secrets…that are really not secret at all. But Germans have advantages that have provided an opportunity in dealing with major transitions in a global economy.
The seven “secrets” have to do with a combination of factors that are interwoven and interdependent, cultural and structural, policy and practice. Although they might not be transferable to other countries, they can be studied, which is what the authors have done.
The focus of the study is the strength of the so-called Mittelstand—highly focused smaller companies that have identified, polished, and nurtured a niche in the global competitive market. It is focused on the nurturing of a labor force that is capable of both implementation and innovation. It involves a holistic approach to the structure of the economic foundation of Germany—its governance of industrial relations and its investment in the environment or infrastructure in which it operates. It requires understanding that even after unification and becoming the largest and most powerful economy in Europe, Germany remains a small country in a global economy in need of staying competitive in all corners of the market. It illustrates a paradoxical equation involving Germany’s perseverance of some practices and pillars, while still able to reform and rethink others. Even the history of postwar Germany, starting from the zero hour through the next seven decades, shows how the legacies of WWII, including the foundation of the Federal Republic in 1949, provided a platform from which Germans could take advantage of a decentralized economic and political framework to rebuild a democracy and a successful economy. And in the process, Germans could gradually recognize for themselves not only what they had to remember, but also to renew.
At a time when modern Germany is coping with its biggest crisis in decades—the refugee and immigration challenge—many of the tools that have worked in the past to sustain economic growth and political stability are under pressure. In a bit more than a quarter of a century, Germans have had to redefine their country and themselves in the wake of unification, the opening up of Europe, and indeed in facing increased opportunities, expectations, and responsibilities on the world stage.
The authors have pointed out not only what resources Germans have in reserve, but also what they have to develop to deal with these new chapters. None of the “secrets” would have been sufficient for success by itself. But the combination of them is in fact the real secret of Germany’s success. Can any of those skills and practices be adopted, say in the U.S.? Maybe not wholesale. The authors point out the unique characteristics of German experiences, perspectives, and indeed values. But they also offer a good deal of comparative assessments, particularly in the U.S., where a lot can still be learned from Germany.
Reference is often made to the recent success of the German national soccer team—not made up of mega stars, but still able to win the World Cup a fourth time in Brazil by working together so brilliantly. Of course, there were occasions where that didn’t work in the past years. So, Germany cannot take things for granted. But the authors answer some questions as to how Germany got this far—even if there are still a lot of tough challenges ahead.
This book is a good introduction for anyone looking for ideas and innovative approaches to understanding what can make a difference in a changing and indeed turbulent world arena.