Resurgent Germany

Citation

(2007), "Resurgent Germany", International Journal of Productivity and Performance Management, Vol. 56 No. 8. https://doi.org/10.1108/ijppm.2007.07956hab.004

Resurgent Germany

German productivity is rising at an annual rate of 1.7 per cent, more than double the rate from 1998 to 2004. This trend is one of several that indicate the rising economic power of Germany. This does not seem to an infrastructure issue. Jörg Krämer, chief economist at Commerzbank in Germany, said, “If we had radical reforms, I might be willing to interpret these rises as changes in the trend of productivity growth. But we didn’t, so I don’t.” In other words, the government did not do anything to better productivity.

But businesses did. There are numerous examples such as the Wittenstein factory, which has radically reshaped both the configuration of its plant and the processes its workers follow; having abandoned the traditional management structure, company policy now places engineers next to assembly-line workers. Productivity consequently rose from 15 per cent to 20 per cent in just 18 months.

This improvement – as much in spite of government as because of – is expected to continue. German companies have recovered their confidence!