There was an interesting article in The Observer today which argued that the German Economic Miracle maybe coming to an end. The argument was that the obsession with balanced budget had resulted in years of underinvestment in infrastructure and innovation and that the country was therefore unprepared for the challenges of it’s changing demography.

The Observer quoted Christian Democrat politician Jens Spahn saying:

“While we have been enjoying our success, we’ve been falling behind in key areas such as the digital economy. Today people across the world may be buying BMWs and Mercedes cars because of their quality engineering, but tomorrow we may be choosing one car over the next because it has superior software.”

I must say I agree with him on the car front – German cars definitely don’t prioritise software and to my mind it is unquestionable that software functionality will become more and more important for car buyers – to the point that it may indeed become a deal-breaker.

At the same time I’m not sure I really buy the picture of German industry starving for investment in advanced technologies. I have recently (and co-incidentally) been very struck by the number of times it has been a German firm behind innovative precision engineering products which have popped up in various TV programmes. In Grand Designs, for instance, any really innovative module systems seem to be built in Germany and then shipped in on the back of lorries to some forlorn plot in rainy England. And I seem to recall the huge tunnel boring machines which are cutting Crossrail tunnels under London are – you guesses it – German. And I seem to remember that the dramatic lattice work for the roof of the new Canary Wharf Crossrail station is also German.

I realise this is all rather anecdotal – but still…. it makes me wonder if the article is writing off German industry a bit too soon….