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Hubertus Bardt / Michael Hüther / Hans-Peter Klös IW-Report No. 22 4. June 2021 Modernization through investment

The German economy is facing extensive modernization challenges that have to be overcome with new technologies, new business models and the necessary investments.

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Modernization through investment
Hubertus Bardt / Michael Hüther / Hans-Peter Klös IW-Report No. 22 4. June 2021

Modernization through investment

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German Economic Institute (IW) German Economic Institute (IW)

The German economy is facing extensive modernization challenges that have to be overcome with new technologies, new business models and the necessary investments.

While the automotive industry, with its strong innovation and investment performance, is already experiencing significant transformation dynamics, energy-intensive industries are facing greater challenges. In particular, there is a lack of adequate state support measures in order to be able to make the necessary investments in climate neutrality in Germany that have not yet been economically viable. A catching-up process has also started in digitization so that the combination of industrial strength and digital innovation can create a strong competitive position for the next few decades. While many infrastructural prerequisites are still lacking, the state initiative is going in the right direction. For economic policy, the necessary modernization is linked to three core tasks: The prerequisites for private investments in Germany must be strengthened through locational policy and transformation support, the complementary public investments must be made and the state itself, with its lengthy planning and decision-making processes, must be modernized and integrated. 

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Modernization through investment
Hubertus Bardt / Michael Hüther / Hans-Peter Klös IW-Report No. 22 4. June 2021

Modernization through investment

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German Economic Institute (IW) German Economic Institute (IW)

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