Herbert Henzler at IZA Tower Talk: Germany - From Champion to Bench Player?
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The renowned political advisor and former head of McKinsey Germany, Herbert Henzler, was the invited speaker at the IZA Tower Talk on June 7, 2005. His presentation dealt with the long-term prospects of the German economy, which Henzler sees as threatened by the still widespread illusion about Germany’s actual position in global competition. The creeping loss of market power in such growth industries as pharmaceuticals and telecommunications reveals, according to Henzler, that the title of "world champion in exports" hardly reflects reality.
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At the same time, public awareness of how strongly Germany’s economic prospects are influenced by exogenous factors is still underdeveloped, claimed Henzler. The international integration of the world’s financial markets cannot be slowed down, nor can Germany forever evade the need for deregulation in the face of growing global competition. Given the rapid progress in information and production technology, today’s firms must continually assert their productivity advantages as they disappear ever more quickly. This exposes Germany to a constant pressure to perform.
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In this context, Henzler criticized the insufficiently developed entrepreneurial culture in Germany. He warned that the share of entrepreneurs in the workforce has continuously fallen for the past 25 years while the share of government employees has risen over the same period. Apparently, many people are “avidly opposed” to the idea of entrepreneurship. Henzler attributed this attitude in part to the German system of higher education, which seems largely disconnected from entrepreneurial practice.
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Henzler's concrete proposal consisted of five key components: (1) a fundamental reorganization of the German social security system, (2) increased productivity growth, e.g. through investment in information technology, (3) a more favorable business environment through an improved image of entrepreneurship and the removal of bureaucratic obstacles, (4) a massive promotion of technological innovation, and (5) a program to boost education, including pre-schools as well as universities. In conclusion Henzler warned, "As a player in the global game, we are not yet confined to the bench, but we are no longer in the starting lineup."
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