Many entrepreneurs complain about the current situation. At an evening event, two entrepreneurs had had enough of it – and presented five opportunities for the coming year
One of the nice traditions just before Christmas is these small evening gatherings of friends, neighbors and colleagues. Someone invites you over for a small meal, a beer or a glass of wine, you sit together and talk about all sorts of things: the tree, which will be a little crooked again, the presents for the children and how the year has been . I don't know how evenings like this have gone for you in the last few weeks (perhaps it's one of the deformations of life in the capital), but at least in Berlin these conversations have often quickly spiraled downhill.
There is the new election in Germany; an economy that hasn't grown for years; the war in Ukraine; high energy prices; uncertain prospects; and in the USA soon a president who threatens Europe with this and that, sometimes with punitive tariffs, sometimes with a withdrawal from NATO. When it comes to these topics, the mood at the table quickly deteriorates.
I experienced a small exception this week in a relaxed group of entrepreneurs, managers, politicians and a few journalists. Normally the requirement of confidentiality applies to these conversation formats, but in this case the implementation for this newsletter makes an exception.
Two managers break out
For several hours, the discussion initially took the usual, heavily depressive course when, late in the hour, two hands shot into the air: they were the economist and multi-supervisory board member Ann-Kristin Achleitner and the head of the Berlin management university ESMT, Jörg Rocholl. They obviously couldn't stand the devoted gaze into the abyss any longer.
You now want to start a counter-speech, announced Achleitner – and then, together with Rocholl, made a refreshing plea for a little more confidence. The two presented five arguments in essence, five arguments that do not provide the solution to every acute problem in the country, but which show that not everything is bad in Germany and Europe. And that opportunities may arise in the next few years – we just have to seize them.
Achleitner's first argument is orthodox on the USA. Donald Trump's America First doctrine will strengthen the USA in the short term, but is a danger for the country in the medium and long term – and an opportunity for Europe. In the competition for the best and brightest minds in recent decades, the old continent has never had a chance against the elite universities in the USA and the vibrant tech scene in San Francisco and Austin. But that could soon change if Trump announces that he will close the borders and expel millions of migrants from the country.
Such measures send a signal to the world, far beyond those directly affected. Many Americans apparently want to keep to themselves in the future – what has made the country great for decades will soon dry up: the constant influx of workers from abroad. The USA is transforming from a land of freedom into a country of unfreedom – a serious setback, especially for scientists and developers. Achleitner argued that this is a tremendous opportunity for Europe's universities and companies to distinguish themselves as a place of excellence and openness.
Dynamic startup scene
In any case, Germany and Europe already have a very dynamic founder and start-up scene – the second argument for Europe. Achleitner should know, she works and teaches at the Technical University of Munich, one of the most important startup incubators in the country. And in fact, Europe is already ahead of the USA when it comes to start-ups. With 35,000 young start-ups, Europe is number one in the world in the start-up rankings, according to the latest “State of European Tech” report by the London investor Atomico.
At this point, Jörg Rocholl, President of the renowned management school ESMT in Berlin, took the floor next to her. Rocholl first referred to the high number of patents that are filed with the European Patent Office from Germany every year. In 2023 there were almost 25,000, significantly more than from Japan and China. Only the USA is ahead of Germany with almost twice as many patent applications. Rocholl's message: Germany can innovate and does not have to hide from other powerful players in the global economy.
High savings rate
His fourth argument is the high savings rate in Germany, according to the Federal Statistical Office, a good 11 percent in the first half of 2024 – one percentage point more than in the first half of 2023. In times of crisis, Germans are saving even more money than usual. The problem is It's just that, Rocholl said, most of the money is sitting unproductively in savings accounts or life insurance policies and, for regulatory reasons, banks and insurers can do little or nothing with that money. Deregulation is urgently needed here so that at least a small part of this immense capital stock – almost eight billion euros in the first half of 2024 – is available for investments and corporate financing in the future.
Such a block in the investment regulations for life insurers has been discussed for a long time, but has not really made any progress so far. However, it is not impossible; unlike the debt brake, these rules are not even in the Basic Law – that is also good news in this country.
China as an opportunity
Last but not least, Rocholl talked about Germany's comparatively close relations with China. What some geopoliticians were worried about could also be an opportunity, said Rocholl, namely if the USA toughened its tone towards both China and Europe and only imposed punitive tariffs on foreign products. Europe could pursue its own interests with and in China; China's interest in Germany and Europe is still extremely high. It is the classic middle position between the two rivals and great powers – it should not just be a disadvantage. Virginie Maisonneuve, Chief Investment Officer at Allianz Global Investors, makes a similar argument in the latest issue of Capital.
Achleitner and Rocholl's plea lasted six, maybe seven minutes; it was objective, precise and yet passionate. When they were finished, it was for a brief moment. You could tell that her little dinner speech had quite an impact.
You don't have to agree with every argument completely; some of them can also be turned against Germany – such as the great dependence on the Chinese market, which makes Germany vulnerable to blackmail. But the concise and decisive intervention also showed that despite all the problems and challenges that Germany and Europe are facing, the future does not necessarily have to be terrible; the country's decline is far from a done deal.
