Structural Change

International competition changes the economy. However, governments should refrain from trying to push structural change into a specific direction.

Hanno Kempermann / Agnes Millack ·
IW-Trends ·
11 Apr 2018

Digital Regions in Germany

The digital transformation is not only revolutionising the world of business but also affecting geographical developments. Picking up on this trend, the thematic focus of this year's IW Regional Ranking is on the digital prospects of Germany’s various regions.

Digital Transformation and Globalization in Germany and Japan

13Jun

Hubertus Bardt ·
Event ·
13 Jun 2017

Symposium: Digital Transformation and Globalization in Germany and Japan

This symposium Symposium of Japanese-German Center Berlin, Fujitsu Research Institute and Cologne Institute for Economic Research has brought together experts and affected companies from Germany and Japan to discuss their views on and strategies for digital transformation to gain productivity and overcome market obstacles across Europe and Asia.

Vera Demary ·
IW-Report ·
8 May 2017

The role of innovation in the sharing economy

While the sharing economy is generally perceived to be very innovative, it has hardly been analyzed what defines this innovativeness. The main aspect for the sharing economy as a whole is the peer-to-peer (P2P) organization of its businesses. This allows sharing platforms to enter markets more easily, consequently increasing competition in these markets.

Industrialised countries often react to the increasing competition from emerging markets by focusing on those sectors of production in which they are superior to their competitors. German companies, for instance, concentrate on highly specified tasks such as research and development in their home-country and perform simple manufacturing processes abroad.

Before the global economic and financial crisis, building a large service sector was considered indispensable for reaching economic prosperity. This has changed: History has shown that both countries with a large service sector and countries with an important industrial sector can reach high income levels. Therefore, governments should refrain from steering structural change into a particular direction. Rather, they should allow for flexibility in the labour market, so as to enable the downsizing of sectors that are no longer profitable and to encourage entrepreneurship and growth in growing economic sectors.