UdZ 02.21

UdZ 02.21 / 17 “ Dienstleistungswende ” – NewOpportunity forGermany as a Business Location? T he ship of Germany as a business location is swaying in increasingly rough seas. It is swaying not so much because the traditional German pillars of value creation (especially its flagships, the automotive and mechanical engineering industries as well as the chemical and logistics sectors) have lost their capabilities and expertise; rather, it is the major technological breakthroughs of the last decades that have caused the “German virtues” – which ensured a leading position among the major economic powers for more than a century – to lose in significance. Perfectionism, quality workmanship, and the reliability and durability of products of all kinds made sure that the German economy has had an excellent reputation internationally for many decades. However, this has led to a certain complacency – the German economy, it seems, came to take its strong position in the world for granted. Infatuated with its own perfection (the strategy consultant and blogger Sascha Lobo dubbed this the “Spaltmaßfixierung” of entire sectors of the economy – alluding to the typically German fixation on minute details such as the clearance between parts 1 ) and forever focused on purely incremental innovation, Germany is lagging dangerously behind the competition in important areas of future areas of value creation – especially in the area of digitalization, which is crucial for the future of the German economy. Need for Innovation in the Service Sector However, large-scale digital transformation of both the private and public sectors is the key prerequisite for innovative service business models that will decide whether or not a business location will be successful in the future. All highly developed, complex societies made the transition from an agrarian to an industrial to a service society. This trend will accelerate further as digitalization and automation bring about the transformation into a knowledge society – which is, after all, a particularly sophisticated form of service society. The future potential of digital technology could decisively transform the service sector and thus give new impetus to the diminishing competitiveness of the German economy. 1 Lobo 2016