Germany: From Economic Champion of the Past to a New Superpower of the Future
Strategic thoughts on bringing Germany's economy back on track, from the perspective of an entrepreneur.
For decades, Germany was one of the world's great economic success stories.
"Made in Germany" became much more than a label of origin. It became a global promise of quality, reliability, engineering excellence and industrial strength.
German companies conquered international markets. The Mittelstand (SMEs) became admired around the world. Our automotive, chemical, mechanical engineering and manufacturing industries established global leadership positions. Germany combined industrial strength with social stability and became the economic engine of Europe.
But economic leadership is never inherited forever.
It must be earned again and again.
Today, Germany finds itself at a crossroads.
Growth has become weak. Industrial competitiveness is under pressure. Companies are reconsidering investments. Energy costs remain a concern. Bureaucracy has become a significant burden. Demographic change is putting increasing pressure on the labour market and social security systems.
Meanwhile, the global economy is changing faster than perhaps at any time since the industrial revolution.
Artificial intelligence, robotics, biotechnology, energy technologies, digital finance, advanced manufacturing, defence technologies and entirely new business models are creating tomorrow's economic champions.
The question Germany therefore needs to ask is not:
How can we return to the Germany of yesterday?
The much more important question is:
How can we build the Germany of tomorrow?
I write these thoughts not as an economist or politician, but as an entrepreneur who has spent more than three decades building companies across different industries, countries and continents.
And entrepreneurs tend to look at problems differently.
When a company begins losing competitiveness, we cannot simply discuss the problem for years. Eventually we run out of customers, capital and time.
We analyse what went wrong.
We make decisions.
We restructure.
We invest.
And most importantly, we execute.
Perhaps Germany needs some of exactly this entrepreneurial mindset.
Germany Is Not a Poor Country, It Is an Underperforming Asset
If Germany were a company, I would certainly not sell it.
I would buy it.
Why?
Because the fundamentals remain extraordinary.
Germany still has one of the world's largest economies. It has outstanding industrial know how, world class engineers and scientists, globally recognised companies, thousands of highly specialised Mittelstand businesses, excellent universities and research institutions, sophisticated infrastructure, substantial private wealth and a reputation for quality that generations have built.
Very few countries possess this combination.
The problem is therefore not that Germany has lost all its strengths.
The problem is that we are not using them effectively enough.
Germany has increasingly created an environment where building something new can be unnecessarily difficult, expensive and slow.
Too much bureaucracy.
Too many regulations.
Too long approval processes.
High taxation and social costs.
High energy costs.
A shortage of qualified labour.
Slow digitalisation.
And, perhaps most dangerously, a growing culture in which avoiding risks can sometimes appear more important than creating opportunities.
An entrepreneur confronted with such a situation would not abandon the company.
He would launch a turnaround.
1. Declare Germany a Country of Entrepreneurs Again
Every successful economy ultimately depends on people willing to create something.
Someone has to start the company.
Someone has to risk capital.
Someone has to hire the first employee.
Someone has to develop the product nobody knows whether customers will buy.
Someone has to transform an idea into economic reality.
Germany therefore needs to put entrepreneurship back at the centre of economic policy.
Starting a company should become dramatically easier.
My proposal would be simple:
Make it possible to establish a standard company digitally within 24 hours.
One digital procedure. One identification. One platform connecting the tax authorities, commercial register, municipality and other relevant institutions.
But we should go further.
Create a genuine German Founder Package.
For the first three years, young companies should benefit from simplified accounting and reporting requirements, substantially reduced administrative obligations, better treatment of reinvested profits and easier access to private growth capital.
We should stop asking:
"How can we regulate every possible problem a new company might create?"
And start asking:
"How can we help 100,000 new companies become successful?"
2. Turn the Mittelstand Into the Mittelstand 2.0
Germany's Mittelstand is one of the greatest economic assets in the world.
But thousands of these businesses face transformation and succession challenges.
Instead of allowing successful companies to disappear because there is no successor, Germany should create a national Mittelstand Transformation Initiative.
Bring together entrepreneurs, investors, universities, technology companies and the next generation.
Help traditional companies digitalise.
Introduce artificial intelligence.
Automate production.
Expand internationally.
Find successors.
Provide growth capital.
And connect established industrial companies with young technology entrepreneurs.
Imagine combining 50 years of German engineering knowledge with the speed of an AI startup.
That could become one of Germany's greatest competitive advantages.
3. Make Germany Europe's Best Place to Invest
Capital is international.
Capital does not have a passport and it does not wait forever.
Investors compare countries.
Where can I build faster?
Where can I hire people?
Where is energy competitive?
Where are taxes reasonable?
Where are regulations predictable?
Where will government facilitate investment rather than delay it?
Germany must compete for investment just as companies compete for customers.
I would establish a Germany Investment Fast Track for major domestic and international investments.
Every significant investment project should have one responsible government contact coordinating the necessary authorities.
Not five years of procedures.
Not dozens of agencies communicating separately.
One project.
One coordinator.
One deadline.
One decision.
Germany should set itself an ambitious target:
Become one of the three most attractive investment locations in the world within ten years.
4. Bureaucracy Must Become a Service, Not an Industry
Regulation is necessary.
But bureaucracy that prevents productive activity ultimately damages the society it intends to protect.
Germany needs something far more ambitious than another programme promising "Bürokratieabbau" (bureaucracy reduction).
It needs a regulatory reset.
For every new substantial business regulation introduced, existing obligations should be reviewed and outdated ones eliminated.
Government services should become digital by default.
Applications should follow standardised procedures.
Authorities should operate with binding decision periods wherever possible.
And regulations should increasingly be assessed according to a simple question:
What does this regulation cost a company in time and money, and is the benefit worth that cost?
An entrepreneur understands opportunity cost.
Every hour a business owner spends unnecessarily filling out forms is an hour not spent developing products, winning customers or creating jobs.
5. Energy Policy Must Also Be Economic Policy
Germany cannot remain a major industrial economy if energy is structurally uncompetitive.
The energy transition is necessary.
But ecological transformation and economic competitiveness cannot be treated as opposing objectives.
Without competitive industry, there will ultimately also be less money available to finance environmental transformation.
Germany therefore needs a pragmatic long term energy strategy based on three principles:
security, affordability and sustainability.
Industry requires predictable energy prices.
Companies making investments worth billions need to know what their energy environment will look like ten or twenty years from now.
Ideology should never replace engineering and economics.
Technology neutrality, infrastructure expansion, storage, renewable energy, grid modernisation, international energy partnerships and future technologies must all form part of a realistic strategy.
6. Make Germany the AI and Deep Tech Factory of Europe
Germany missed opportunities during parts of the first digital revolution.
It cannot afford to miss the AI revolution.
But Germany should not try simply to copy Silicon Valley.
It should build on its own strengths.
Combine AI with:
manufacturing,
automotive technologies,
robotics,
industrial automation,
energy,
chemicals,
healthcare,
logistics,
defence,
and advanced engineering.
That intersection between German industrial expertise and artificial intelligence could create an entirely new generation of global champions.
Germany should create special innovation zones around universities, industrial clusters and research institutions where startups can access laboratories, computing infrastructure, corporate partners, financing and accelerated regulatory processes.
And Europe urgently needs deeper capital markets capable of financing companies beyond the startup stage.
We should not educate brilliant founders in Germany, finance their first years with German resources and then watch them relocate abroad when they need €100 million to become global players.
7. We Need More People Creating Value
Germany's demographic challenge cannot be solved through slogans.
The mathematics eventually wins.
Fewer working people financing more retirees will put increasing pressure on salaries, companies and public finances.
Germany therefore needs a new social contract.
Those who can work should have strong incentives to work.
Those who want to work longer should be encouraged rather than penalised.
Parents need childcare structures that genuinely allow them to participate in the labour market.
Germany needs qualified immigration, but immigration connected much more effectively with education, skills, integration and labour market demand.
At the same time, automation, robotics and artificial intelligence must compensate for parts of the shrinking workforce.
The debate should therefore not simply be about how many people Germany needs.
It should be about how productive every working hour can become.
8. Reform Pensions Before Demography Forces Us To
Pension reform is politically difficult precisely because the consequences of doing nothing appear slowly.
But entrepreneurs know that ignoring a predictable future liability does not make it disappear.
Germany needs a pension system combining solidarity between generations with capital formation.
The existing pay as you go system should gradually be complemented by substantially stronger funded pension elements.
Imagine if millions of Germans accumulated long term retirement capital that was professionally invested into productive assets, infrastructure and companies.
That would simultaneously strengthen retirement security and create a deeper domestic pool of investment capital.
Germany could transform part of its demographic challenge into a capital market opportunity.
9. Government Must Invest, But Investment Alone Will Not Save Germany
Germany undoubtedly needs modern infrastructure.
Railways.
Bridges.
Energy grids.
Digital networks.
Schools.
Defence.
Research.
Housing.
But spending €100 billion is not an achievement.
Building something valuable with €100 billion is the achievement.
Every entrepreneur understands this distinction.
Germany therefore needs not only more investment but dramatically better execution.
Major infrastructure projects should have clear responsibilities, measurable milestones, transparent budgets and public performance reporting.
Government needs some of the disciplines we consider completely normal inside successful companies.
Strategy.
Responsibility.
Deadlines.
KPIs.
Execution.
Accountability.
10. Transform the Social State From Repair Shop Into Launchpad
A strong social system is one of Germany's achievements and should remain so.
A wealthy society should protect people who genuinely need support.
But a sustainable social state must also help people become economically independent whenever possible.
Education, retraining, childcare, entrepreneurship and employment should therefore become central elements of social policy.
The objective cannot simply be administering social expenditure.
The objective must be enabling as many people as possible to participate in creating prosperity.
The best social policy over the long term is an economy capable of generating opportunity.
11. Germany Must Think Globally Again
Germany became wealthy because German entrepreneurs went into the world.
We exported.
We invested.
We built factories.
We established partnerships.
We entered difficult markets.
We became global.
That spirit needs to return.
Africa will become increasingly important.
India and Southeast Asia are expanding.
The Gulf states are investing enormous amounts into their economic transformation.
Latin America possesses enormous resources and entrepreneurial potential.
Central Asia is gaining strategic relevance.
Germany should build new economic bridges with these regions rather than remaining excessively dependent on traditional markets.
Government can open doors.
But entrepreneurs must walk through them.
A German Economic Mission for 2035
Countries, like companies, need ambition.
Managing decline is not a strategy.
Germany should therefore define a national economic mission for the next decade.
By 2035, Germany should aim to become:
Europe's leading entrepreneurial economy.
Europe's industrial AI powerhouse.
One of the world's most attractive locations for investment.
A global centre for advanced manufacturing and engineering.
A leader in energy and environmental technologies.
A country where founding and growing a company is easier, not harder.
And once again one of the world's strongest sources of globally successful companies.
These are ambitious goals.
Good.
Germany needs ambition again.
From Weltmeister to Weltgestalter (From World Champion to Shaper of the World)
I do not believe Germany's best economic years have to be behind us.
Quite the opposite.
Germany possesses almost everything necessary for another economic success story.
But yesterday's strengths will not automatically create tomorrow's prosperity.
The old German economic model was extraordinarily successful.
Now we need to build its successor.
And perhaps the most important transformation is not economic at all.
It is psychological.
We need to rediscover the courage to build.
The willingness to take risks.
The respect for entrepreneurs.
The excitement of innovation.
The ambition to compete.
And the belief that creating prosperity is something positive.
Germany does not need another decade discussing why things cannot be done.
It needs a decade of asking:
How can we make it happen?
That is how entrepreneurs think.
That is how economic champions are created.
And that is how Germany can move from being an economic champion of the past to becoming an economic superpower of the future.
Not by recreating yesterday.
But by building tomorrow.
Germany does not need a comeback.
Germany needs a new beginning.
About the Author
Mario Diel
Author, "Germany: From Economic Champion of the Past to a New Superpower of the Future"
A global entrepreneur with more than thirty years of building businesses across multiple sectors and continents, he teaches entrepreneurship as a visiting professor.
Founder & President, Salvator Mundi Global
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