What is Germany doing right that we're not? And why?
Discussion
Otispunkmeyer said:
Carl_Manchester said:
In terms of U.K data, the office of national statistics runs a quarterly report here is an extract:
Source: https://www.ons.gov.uk/economy/nationalaccounts/uk...
But not everyone is cut out to work in banking and other service type jobs, surely we need to keep some form of manufacturing. Might not be as profitable...But keeps more in employment?Source: https://www.ons.gov.uk/economy/nationalaccounts/uk...
This is where globalisation has gone wrong - for a cheaper product the companies have moved manufacturing out of higher cost areas.
Problem is then whilst they've made products cheaper not everyone can afford stuff if they don't have a job to allow them to pay for cheap stuff.
We need some balance in the country
egomeister said:
From my observations, a lot of the things Germany do well have been covered in replies above.
The key one I've seen is the management attitude in business. There is much better long term strategy and investment than I've experienced in the UK - the German approach seems to be one of slowly building something whereas here there is a focus on this years bottom line and forget the future. On the whole German management seems to recognise that it is there to plan long term, and facilitate work short term. An example of this would be a colleague who requested a certain tool (relatively cheap) that would make his life easier. In Germany the management took the request, saw it was reasonable and he had the tool in days. In the UK, similar requests are met with "it's not in this years budget..." - the tool is never bought and efficiencies never realised.
Another interesting difference was in education. A colleague who had studied in both countries said the style of teaching was very different. In Germany he found there was much more emphasis on acquiring knowledge but in the UK it was more cramming for an exam. He said it wasn't uncommon for students to go back retake modules at a later date if they felt they could then get a better result, not just if they failed.
I agree. I think it's part of the 'bottom line' mentality versus the 'give good service/product;' mentality.The key one I've seen is the management attitude in business. There is much better long term strategy and investment than I've experienced in the UK - the German approach seems to be one of slowly building something whereas here there is a focus on this years bottom line and forget the future. On the whole German management seems to recognise that it is there to plan long term, and facilitate work short term. An example of this would be a colleague who requested a certain tool (relatively cheap) that would make his life easier. In Germany the management took the request, saw it was reasonable and he had the tool in days. In the UK, similar requests are met with "it's not in this years budget..." - the tool is never bought and efficiencies never realised.
Another interesting difference was in education. A colleague who had studied in both countries said the style of teaching was very different. In Germany he found there was much more emphasis on acquiring knowledge but in the UK it was more cramming for an exam. He said it wasn't uncommon for students to go back retake modules at a later date if they felt they could then get a better result, not just if they failed.
i wonder what will happen post brexit when we in the UK are struggling with loss of access to single market and not new trade deals (I assume in short term the UK will struggle but may prosper longer term). Will this affect Germamny after all do we buy more BMW's than say eastern europe or italy or France. its doewn not take huge % drops in sales to have big impact etc.
Someopne said to me did I really think we would stop buying german cars whats the alternative etc. This is true but oftern its not a choice but a nessiecity if german cars become 10% or 20% more expensive we will buy less same with german white goods and other products there are always alternatives.
Someopne said to me did I really think we would stop buying german cars whats the alternative etc. This is true but oftern its not a choice but a nessiecity if german cars become 10% or 20% more expensive we will buy less same with german white goods and other products there are always alternatives.
Gecko1978 said:
i wonder what will happen post brexit when we in the UK are struggling with loss of access to single market and not new trade deals (I assume in short term the UK will struggle but may prosper longer term). Will this affect Germamny after all do we buy more BMW's than say eastern europe or italy or France. its doewn not take huge % drops in sales to have big impact etc.
Someopne said to me did I really think we would stop buying german cars whats the alternative etc. This is true but oftern its not a choice but a nessiecity if german cars become 10% or 20% more expensive we will buy less same with german white goods and other products there are always alternatives.
10 or 20% on the monthly payments will probably be more palatable than having to lay the entire extra cost out in one go should prices rise due to import tariffs on german cars (i don't think they will). as most cars are financed/leased these days i don't think it will have the impact it would have in years gone by when more people bought them outright .Someopne said to me did I really think we would stop buying german cars whats the alternative etc. This is true but oftern its not a choice but a nessiecity if german cars become 10% or 20% more expensive we will buy less same with german white goods and other products there are always alternatives.
Halb said:
I agree. I think it's part of the 'bottom line' mentality versus the 'give good service/product;' mentality.
I wouldn't even say it's that, more the understanding of deferred gratification. Business there seems to be more willing to forgo the instant return for the bigger prize down the road.Carl_Manchester said:
Porsche does very well, their margin has been averaging around 15-16%.
This is only possible due to the assistance VW gives it via R&D, component, supply chain and capital access.
Using Porsche as an example is like using Apple, the problem is that these companies are exceptions.
Having said that, Porsche still would not register on the worlds top profit making companies, to do that it would need to hit far higher heights and there is only so much you can charge for a Macan Diesel.
In terms of U.K data, the office of national statistics runs a quarterly report here is an extract:
Source: https://www.ons.gov.uk/economy/nationalaccounts/uk...
Moving goalposts. Your earlier post referred to ">with manufacturing you are doing really well if you can hit 5% <" your ONS graph depicts substantially above 5% for manufacturing, although the method of measurement of the various margins / returns is not stated (risk of comparing apples & pears).This is only possible due to the assistance VW gives it via R&D, component, supply chain and capital access.
Using Porsche as an example is like using Apple, the problem is that these companies are exceptions.
Having said that, Porsche still would not register on the worlds top profit making companies, to do that it would need to hit far higher heights and there is only so much you can charge for a Macan Diesel.
In terms of U.K data, the office of national statistics runs a quarterly report here is an extract:
Source: https://www.ons.gov.uk/economy/nationalaccounts/uk...
VW may provide support for Porsche, perhaps VW charge Porsche for that support?
There is a case to made that a large proportion of the services sector is a parasitic load, i.e. it doesn't add real value.
One key item, if it hasn't been mentioned yet, is their infrastructure.
Germany has a great road and rail network allowing good and services to travel with ease.
It is also in central europe whereby good and services on an international level can transact.
It is a country that also wins on tourism. A very clean and maintained countryside with plenty to see and do.
A high national pride also combined with one of the best general work ethics in the western world.
edit to add : (apart from the recent cheating on emissions etc.)
Germany has a great road and rail network allowing good and services to travel with ease.
It is also in central europe whereby good and services on an international level can transact.
It is a country that also wins on tourism. A very clean and maintained countryside with plenty to see and do.
A high national pride also combined with one of the best general work ethics in the western world.
edit to add : (apart from the recent cheating on emissions etc.)
Edited by Atomic12C on Tuesday 28th February 09:40
Atomic12C said:
One key item, if it hasn't been mentioned yet, is their infrastructure.
Infrastructure is one of the things that is really holding back the physical economy - movement of goods and manual services - in the UK. The service sector, especially FS is far less impacted by this deficiency.Otispunkmeyer said:
But not everyone is cut out to work in banking and other service type jobs, surely we need to keep some form of manufacturing. Might not be as profitable...But keeps more in employment?
Of course we need to keep a manufacturing base, its just that, all the sectors that remain need to be highly automated, efficient and technology driven. The 100% services based economy is a nirvana state and its not realistic in our country without being invaded or starving to death, there are many manufacturing industries that remain strategic such as food, drink, aerospace, ship building (cough), defence, medicine.I don't have much time to write a post at the moment however need to point out that total u.k manufacturing sector output has increased since the late 1970's, even with the decimation of the mining and textile industries.
The problem, is that the U.K manufacturing industry has significantly increased its efficiency over the years which means that it can do its job with significantly less people due to improvements in technology, automation and such like.
The big mistake I think that happened with the transition away from mining and textiles (the big two that were killed off in the 1980s and early 90s) is that the U.K government never had the dialogue with the people that it affected, it never had a transition plan.
That said, what the government did is in the past. In terms of the future manufacturing is and will be a smaller part of our economic picture.
We will play to our strength and Germany to theirs, our respective governments and their economic strategies reflect the will of the people. Which is the Germans will be more guarded, will save more and will be happy to generally earn less in exchange for more stability.
The British in turn will spend more, borrow more, save less and more will want to pursue jobs that can make them millionaires at the cost of a more even, fairer, benign economy.
Which is right is down to the individual, personally, I identify more with the latter Anglo-Saxon way than the Germanic way even if it does mean that parts of our country remain a wasteland.
Carl_Manchester said:
..... personally, I identify more with the latter Anglo-Saxon way than the Germanic way ....
History is obviously not your strong point is it, or perhaps you're not native English?Anglo-Saxon means the Germanic inhabitants of England from 5th Century till about the Norman Conquest.
paul.deitch said:
History is obviously not your strong point is it, or perhaps you're not native English?
Anglo-Saxon means the Germanic inhabitants of England from 5th Century till about the Norman Conquest.
Or he is talking about it from an economic perspective, where Anglo-Saxon means the English speaking world, but predominantly the US and UK and Germanic relates more to Germany, Austria, Switzerland (and perhaps the Dutch). Anglo-Saxon means the Germanic inhabitants of England from 5th Century till about the Norman Conquest.
Paul, you know you learn something every day. i did not know that.
I think the 'modern' interpretations of these terms in the context of modern economic posture/attitude is definitely different though. the germans do not identify themselves with modern anglo-saxon economic policy even if by historical standards the term is an oxymoron
I think the 'modern' interpretations of these terms in the context of modern economic posture/attitude is definitely different though. the germans do not identify themselves with modern anglo-saxon economic policy even if by historical standards the term is an oxymoron
Germany has the massive benefit of sharing the Euro currency with a bunch of other EU states and, most importantly, calling the shots at the ECB which issues it. Interest rates were tailored for the German economy and possibly to the detriment of other member states - eg. it lead directly to a bloody massive housing boom in the Ireland from 2000 onwards which got low interest rates when high rates were needed to curb the boom.
Essentially, the Euro makes German manufacturing more attractive by stopping currency appreciation (the crapper Euro-using states hold the value of it down) and also provides a really handy market for German goods in nearby countries that use the same currency. What, they are poor countries where people can't afford to buy pricey German goods - no worries, we can loan German's surplus Euro savings to their banking systems to keep consumer demand high! That's worked out so well for the likes of Ireland and Greece. The Irish 'bailout' was nothing of the sort - it was a bailout for German and French banks with the Irish taxpayer picking up the massive debt.
It's no coincidence that even as German manufacturing has done well, the economies of EU states with traditionally weak currencies have tanked.
Essentially, the Euro makes German manufacturing more attractive by stopping currency appreciation (the crapper Euro-using states hold the value of it down) and also provides a really handy market for German goods in nearby countries that use the same currency. What, they are poor countries where people can't afford to buy pricey German goods - no worries, we can loan German's surplus Euro savings to their banking systems to keep consumer demand high! That's worked out so well for the likes of Ireland and Greece. The Irish 'bailout' was nothing of the sort - it was a bailout for German and French banks with the Irish taxpayer picking up the massive debt.
It's no coincidence that even as German manufacturing has done well, the economies of EU states with traditionally weak currencies have tanked.
It's not all a tale of slick efficiency for Germany though at present. I'm sure they'll be able to open Brandenburg Airport (Berlin's new airport) one day:
http://www.economist.com/blogs/economist-explains/...
http://www.economist.com/blogs/economist-explains/...
Not entirely sure it's fair to blame all of Ireland's and Greece's woes on big bad Germany to be fair. No one was forcing the Greeks or Irish to run up massive debt to buy German goods. Years of under-investment in infrastructure, industry and job creation opportunities, working practices which haven't changed for hundreds of years and a "relaxed" attitude to tax paying\collection while still wanting to enjoy all the benefits of a modern, 1st world lifestyle are at least partly to blame for their woes.
Much has been mentioned of the German mindset of not spending what you don't have, perhaps being the losers in 2 world wars is responsible for this mindset but it's a lesson many other European countries and citizens really could do with learning tbh.
Britain aren't in the Euro and we aren't too much better off either tbh because we as both individuals and a country spend more than we earn. Not sure where this bizarre ailment of living beyond your means has come from but surprisingly enough countries which don't seem to do rather well?
Much has been mentioned of the German mindset of not spending what you don't have, perhaps being the losers in 2 world wars is responsible for this mindset but it's a lesson many other European countries and citizens really could do with learning tbh.
Britain aren't in the Euro and we aren't too much better off either tbh because we as both individuals and a country spend more than we earn. Not sure where this bizarre ailment of living beyond your means has come from but surprisingly enough countries which don't seem to do rather well?
Guvernator said:
Not entirely sure it's fair to blame all of Ireland's and Greece's woes on big bad Germany to be fair. No one was forcing the Greeks or Irish to run up massive debt to buy German goods. Years of under-investment in infrastructure, industry and job creation opportunities, working practices which haven't changed for hundreds of years and a "relaxed" attitude to tax paying\collection while still wanting to enjoy all the benefits of a modern, 1st world lifestyle are at least partly to blame for their woes.
Much has been mentioned of the German mindset of not spending what you don't have, perhaps being the losers in 2 world wars is responsible for this mindset but it's a lesson many other European countries and citizens really could do with learning tbh.
Britain aren't in the Euro and we aren't too much better off either tbh because we as both individuals and a country spend more than we earn. Not sure where this bizarre ailment of living beyond your means has come from but surprisingly enough countries which don't seem to do rather well?
I'm not blaming al the woes of Ireland and Greece on Germany - I am pointing out how Germany has been a massive beneficiary of the Euro and weaker countries have seen their economies tank. Italy too - since the Euro came along their industrial base has tanked.Much has been mentioned of the German mindset of not spending what you don't have, perhaps being the losers in 2 world wars is responsible for this mindset but it's a lesson many other European countries and citizens really could do with learning tbh.
Britain aren't in the Euro and we aren't too much better off either tbh because we as both individuals and a country spend more than we earn. Not sure where this bizarre ailment of living beyond your means has come from but surprisingly enough countries which don't seem to do rather well?
I'm all for adopting the German mindset BTW. But when you share a currency and it's run to the benefit of one country (Germany effectively dictates ECB policy) it's never a good idea for anyone but the country that controls it. If there wasn't a Euro, the German economy wouldn't be in such a good state now and the economies of the weaker Eurozone countries would be in better shape.
The benefit of the Euro to Germany is a bit of a red herring, it was already an effective export nation before the currency union - the Euro simply turbocharged that.
I've somewhat softened my stance regarding the Germany/Greece/Ireland debt issues. Previously I was of the opinion that Greece etc borrowed irresponsibly but you can as easily say that the Germans/French shouldn't have lent either - time has showed that the risk was poorly judged.
I've somewhat softened my stance regarding the Germany/Greece/Ireland debt issues. Previously I was of the opinion that Greece etc borrowed irresponsibly but you can as easily say that the Germans/French shouldn't have lent either - time has showed that the risk was poorly judged.
egomeister said:
The benefit of the Euro to Germany is a bit of a red herring, it was already an effective export nation before the currency union - the Euro simply turbocharged that.
I've somewhat softened my stance regarding the Germany/Greece/Ireland debt issues. Previously I was of the opinion that Greece etc borrowed irresponsibly but you can as easily say that the Germans/French shouldn't have lent either - time has showed that the risk was poorly judged.
The 'debt warehousing' dodge that Greece used (courtesy of those ever-present vultures Goldman Sachs) to 'comply' with Euro entry requirements was not the only dirty deal when the Euro was created. France and Germany themselves had also transgressed the rules they wrote:I've somewhat softened my stance regarding the Germany/Greece/Ireland debt issues. Previously I was of the opinion that Greece etc borrowed irresponsibly but you can as easily say that the Germans/French shouldn't have lent either - time has showed that the risk was poorly judged.
http://www.bbc.co.uk/news/world-europe-16834815
Digga said:
egomeister said:
The benefit of the Euro to Germany is a bit of a red herring, it was already an effective export nation before the currency union - the Euro simply turbocharged that.
I've somewhat softened my stance regarding the Germany/Greece/Ireland debt issues. Previously I was of the opinion that Greece etc borrowed irresponsibly but you can as easily say that the Germans/French shouldn't have lent either - time has showed that the risk was poorly judged.
The 'debt warehousing' dodge that Greece used (courtesy of those ever-present vultures Goldman Sachs) to 'comply' with Euro entry requirements was not the only dirty deal when the Euro was created. France and Germany themselves had also transgressed the rules they wrote:I've somewhat softened my stance regarding the Germany/Greece/Ireland debt issues. Previously I was of the opinion that Greece etc borrowed irresponsibly but you can as easily say that the Germans/French shouldn't have lent either - time has showed that the risk was poorly judged.
http://www.bbc.co.uk/news/world-europe-16834815
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