Despite a few localised outbreaks, Germany has won plaudits for its effective response to the pandemic. The next step is rebooting the country’s economy by focusing on key strategic sectors, says Achim Hartig, managing director of Germany Trade and Invest.
How have you adjusted to the new way of working?
Achim Hartig: I’m using the flexibility to either work from the office or at home with my family. Many colleagues are coming back to the office, because they cannot work from home all the time. I’m learning what is possible with remote leadership and team management.
What lessons have you learned during the crisis?
Hartig: It’s a question of how closely we can work with industry associations in Germany and the government ministries involved in the crisis. We are in close contact, looking at the supply of personal protective equipment and addressing concerns about supply chains and logistics.
How have your investment promotion strategies changed?
Hartig: Many investors delayed decisions to invest in Germany, but have not cancelled. We have kept in contact but limited our consulting activity, because [we realised] that investors will stay.
The question was then how we can support the German economy and German companies, focusing on the industries hardest hit by the crisis.
Industries with specific assets, like machinery or buildings, might have more difficulties regaining traction than industries such as consumer goods. We are currently trying to support these industries as much as we can.
We also identified five industry areas in which to focus our investment attraction efforts until the crisis is over. The five areas are: pharmaceuticals, medtech and e-health; automation and robotics; digital infrastructure; sustainable supply chain solutions; and international trade promotion.
How have you digitised your services?
Hartig: Due to the international nature of our business, we’re forced to rely on video conferencing and online collaboration tools when organising projects. But that is nothing new.
However, the crisis brought [digitalisation] to our internal processes – it’s not an option anymore, but an obligation.
Will start-ups or SMEs lead the post-Covid recovery?
Hartig: We have 1.3 million SMEs in Germany, which generate 98% of gross revenue of all companies. They are the backbone of the economy. SMEs will lead us out of the crisis.
Are you expecting a ‘V-shaped’ or ‘U-shaped’ recovery?
Hartig: Looking at current analysis, a ‘V-shaped’ scenario is most likely. The development of business confidence, assessed by surveys, gives room for hope.
We have contingency plans if the recovery takes longer. I discussed the five industry segments we are focusing on, but we have a second stage with ten [focus] industries.
Depending on the economic situation in Germany, we will decide to focus earlier or later on an enlarged portfolio of focus industries.
What’s your advice to other economic development leaders?
Hartig: The crisis is temporary. We are mainly working with companies that are looking beyond the crisis. They are not significantly changing their decisions and strategies.
[Development leaders] need to keep in contact with their clients, address their fears and provide information.
We did an analysis of our home economy and really looked at how we could better help [companies and clients] during the crisis. We issued two new lines of coronavirus-specific information for both foreign and German companies to provide transparency.