2024-09-23 10:45:26
DIW President Fratzscher believes that industries moving out of Germany is positive for the economy. He gives VW some radical advice.
The President of the German Economic Institute (DIW), Marcel Fratzscher, believes that Germany is facing deindustrialization. However, this is a necessary process and offers opportunities, the economist explains in an interview with the “Neue Osnabrücker Zeitung” (NOZ).
“By the time the energy transition is complete, some energy-intensive industries will disappear from Germany,” predicts Fratzscher. They could produce more cheaply elsewhere. However, that is not a bad thing, “but rather a good thing if it enables companies to maintain their innovative capacity and their good workforce in Germany and thus remain competitive.”
There is a permanent deindustrialization, which affected the textile industry in the 1970s and electrical companies in the following decade. “Economically, this is a necessary process because it forces a new beginning.” The recipe for German prosperity is to produce where it is cheapest. Then the components are imported, installed here and the finished products are exported all over the world.
According to Fratzscher, VW and the car industry have missed the opportunity to work innovatively and efficiently in the field of electric cars. A further focus on combustion engines is pointless despite the current profit opportunities: “That would be economic suicide. Electric cars are not an invention to make life difficult for Germany’s car manufacturers.” After all, electric motors are the future.
He therefore urgently advises VW to mobilize billions “to catch up on the technological gap in e-mobility and software.” To do this, some plants would have to be closed and the remaining ones converted to the production of electric cars.