The Ossified Economy: The Case of Germany, 1870-2020

Drivers of Exports Competitiveness in Manufacturing: A Comparison between China and Germany

“…As a result of Germany's innovative development, the quality and irreplaceability of its products are also reflected in its manufacturing competitiveness. The German innovation sector has undergone several distinct periods of transformation [16]. The German state transformed itself from an industrially stagnant country to one of the world's leading innovators from the formation of the German state to the end of the First World War.…”

“…Its success can be attributed to its rapid growth in educational and scientific institutions and organizational innovation. Following the Second World War, in a period that suffered from the ravages of war, corporations such as BMW, Mercedes-Benz, and Volkswagen played an essential role in Germany's post-war economic recovery [16]. Innovation is at the core of the success of these companies, but they are also focused on improving product quality and customer demand.…”

“…Chinese productivity is significantly lower than that of Germany. As a result of the emphasis placed on educational institutions in the past few decades, Germany has a large number of highly skilled producers [16]. Germany also benefited from introducing the euro in 1999 by having a more significant cost advantage over countries in the Eurozone [5].…”

“…However, several worrying phenomena are currently affecting companies in Germany. Their performance in terms of product reliability and warranty claims may not match their reputation, and German innovation has decreased in recent years [15,19]. A lack of innovation may lead to a decrease in Germany's competitiveness in manufacturing exports.…”

“…A lack of innovation may lead to a decrease in Germany's competitiveness in manufacturing exports. A firm innovation policy and an education management capability are necessary for Germany to create a more entrepreneurial state-related social welfare system [19]. An over-reliance on exports makes both countries vulnerable to global economic fluctuations [5].…”