“Why Germany Still Makes Things” – a commentary

When thinking about the strong economies in the world, we often wonder about questions such as “What is the secret to the German economic success?” or how Germany managed to surpass US in exports and manage to remain relevant in manufacturing sector in an age when the jobs are constantly flying to Asia? In the October issue of the Scientific American Stefan Theil authored an article titled “Why Germany Still Makes Things” in which he explains how the strong relations between the universities and the industry makes Germany a competitive country in the manufacturing sector.

As Theil explains, the reason why Germany did not lose jobs to the rising Asian countries such as China or India is mainly that Germans were able to show high degrees of flexibility when the occasion demanded. They demonstrated this through shifting their focus in manufacturing to those goods that are sophisticated enough not to be copied easily by other countries. For example the clockmakers in Baden-Württemberg after many generations of working in this trade, have changed their focus to producing the high-precision surgical instruments which are easy to patent and difficult to copy. But this swift shift in manufacturing could not be made possible without the help of the network of universities and the research institutes across Germany. Fraunhofer Gesellschaft is the largest of these networks which is the result of complicated but continuous cooperation efforts between 60 research centres along with partners in private and governmental sectors. In the German model, businesses usually approach the researchers with specific demand in product development. This direct interaction insures that funds arrive where they are most useful which in turn increases the efficiency in the system. This comes into contrast with the American model in which companies usually make general donation to universities.

These close interactions on part of industries and universities in the framework of the Fraunhofer Gesellschaft open the way for the free movement of scientists between different poles. Whereas an American researcher starting her career in university tends to stay their permanently, according to Theil, a Fraunhofer scientist is likely to switch from university jobs to businesses on average between five to ten years. This flexibility brings better career prospects for the researchers which popularizes the science for the future generations.

Popularity of engineering and research in Germany is partially attributed to the long-term and inclusive government investments in the entities such as Fraunhofer Gesellschaft. Whereas the state investment in research tends to be influenced by political factors in US, the secular approach toward the sciences in Germany ensures the budget stability regardless of the political party(s) in power.

The Fraunhofer Gesellschaft model has proven to be an effective way in transferring knowledge from the laboratories to factories and is probably one of the backbones of the German economic system establishing Germany as an important economic weight in the world.

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