A common complaint about Germany is that it lacks a “dare to fail” culture for innovation. On Monday, German politicians helped counter that perception. The country’s unpopular leader, Olaf Scholz, gladly led a vote in parliament to dissolve his government.
One reason for the downfall of his three-party coalition: The world’s fourth-largest economy has lost its competitive edge in manufacturing, reflected in Europe’s biggest carmaker, Volkswagen, planning its first factory closures in its 87-year history.
A snap election is expected Feb. 23. The campaign will provide a window on how a country struggles to make a mental shift to become more creative and more open to taking risks and developing new ideas as it addresses a new fear: deindustrialization.
Often enough, Germany’s 84 million people have heard promises on the many ways to speed up innovation, from lessening red tape to improving universities. “My goal is for Germany – and especially our industry – to be at the forefront of future technologies,” such as quantum computing, said Chancellor Scholz in October. “The reality, however, is that too little has happened for too long.”
He cited the fact that the United States invests three times as much in venture capital as does Germany. “This cannot continue,” he said. “Only with a greater affinity for risk can we tackle our major projects.”
Germany has a solid record in innovation. It re-created itself after World War II, boosted the economy of east Germany after reunification in the 1990s, and quickly reduced its dependence on Russian gas after the invasion of Ukraine. It also has nearly half of the world’s “hidden champions,” or the types of small manufacturing firms that provide well-engineered goods to big companies.
This has given hope that the next government, perhaps led by center-right leader Friedrich Merz, will make a new try for deep changes. Mr. Merz told a radio station in November that Germany needs a “new political course that tackles the root of the problems.”
Much of Europe looks to its largest economy to revive its techno-creativity. Welcoming the failure of a governing coalition to make room for a new one sets a good example for just the kind of innovative spirit that the economy needs.
