For BayernLB-Research and Prognos, the German business model is under threat. That’s why we’ve co-authored a new report analysing the global context for German firms and outlining ways in which they can ensure their business models remain viable.
This joint report from BayernLB-Research and Prognos examines the state of globalization in:
- cross-border trade
- technology and innovation
- the capital market and corporate structures
Multiple crises are impacting the current political and economic context
For years globalization has been slowing as a result of geopolitical tensions, such as those between the US and China, and political setbacks such as Brexit. Since the Covid-19- pandemic and Russia’s war of aggression in Ukraine, supply chain bottlenecks and new geopolitical threats have further exacerbated the situation, along with inflation and interest rate hikes.
"Ongoing deglobalization – an unravelling of global economic ties – has become a realistic scenario."
Dr Michael Böhmer, Chief Economist, Prognos
The report underlines that, globally, the trade in goods has been stagnating for more than ten years, while services have been playing an ever greater role.
"Germany has managed to steadily increase its services exports and was thus able to rapidly recover from the 2020 slump, thanks in part to its tourism industry."
Dr Jürgen Michels, Chief Economist, BayernLB
Conclusion: resilient sales markets and supply chains are the key to success
For German policymakers and businesses, there is urgent need for action. Companies need to build greater resilience into their sales markets and supply chains if they are still to thrive on the international stage, while the state needs to create the right environment to enable Germany’s export-oriented businesses to better withstand crises. If, however, German firms can look to their strengths and tailor them to the changed circumstances, then this new world can still present attractive opportunities. Our report is intended to outline those opportunities and inspire others to develop them further.
Information accurate as of 31 Jan. 2023
Dr Michael Böhmer
Chief Economist, Head of Corporate Solutions
