Industrial relations Teaming Up for the Greater Good

Germany and France have historically been closely linked, but now is the time to really pull together on industrial policy to propel European growth.
The next step: Industry 4.0.

France and Germany have a long tradition of political and economic cooperation. Our countries are dependent on each other. Politically, because as the biggest countries in the European Union the nations inevitably have a leadership role they have to jointly perform. Economically, as each country is the other’s main export market.

Furthermore, French and German industry are closely linked via cross-border supply chains and innovation networks. This mutual dependence is a trump card that can be played in global competition and to make sure our voice is heard on the global political stage.

However, in view of the crisis situation in Europe and economic stagnation, we have to imbue this relationship with new life.

Reforms have to be initiated on both sides of the River Rhine. France must overcome its weak growth above all. To do that, it has to introduce the principle of “flexicurity” recommended by the European Union, a model that links flexibility with security for employees.

France also has to get labor costs under control to create new jobs. Germany has to maintain its competitiveness. For that to happen, investment has to be stimulated and the efficiency of the services sector improved. The country must also ensure the sustainability of energy reforms in agreement with its European neighbors.

In addition, France and Germany have to instigate either a joint industrial policy, or at least a closely coordinated one, in three central areas.

This concerns, firstly, the expansion and modernization of Europe's entire infrastructure, from road and rail to telecommunications, sewage systems and energy supply. The yearly financing requirements to achieve that would amount to €80 billion ($99.2 billion), money that can and must come from private financing sources.

Liquidity is available worldwide. To attract investors, the European Union has to offer lucrative conditions and a stable legal framework.

France and Germany have to create a "Digital Valley," a joint platform to develop the digital economy.

The second big area: France and Germany have to create a "Digital Valley," a joint platform for companies, experts and institutes working to develop the digital economy. The platform should function according to the open-source principle: What is developed is shared and used by others.

This means independent storage and computing infrastructures have to be created on a European level, to protect the intellectual property of developments. The governments of France and Germany already decided early last year to work more closely together in this area.

Industry – as represented by Federation of German Industries (BDI) and the Movement of the Enterprises of France (MEDEF) - is ready. I know that from discussions with leading figures in both organizations and with many German and French chief executives.

Finally, German and French industry should push ahead with the concept of “Industry 4.0,” Germany's strategy to computerize factories, as a European policy, which will revolutionize the organization of companies. That is the background of the strategic concept of my book “Light Footprint Management - Leadership in Times of Change," which I derived from American military strategy.

The concept combines new technology with a flexible and light-touch management organization. It is therefore ideal for an increasingly volatile and complex environment.

Germany and France, with their strong industrial bases, can profit from the opportunities of “Industry 4.0,” the so-called fourth industrial revolution. German-French industrial policy just has to create the corresponding environment for it and encourage cooperation, for example, by organizing a big data ecosystem in which companies could work together on the development of new products.

Better protection of data and company intelligence is also a key aspect, because only then can a trusting cooperative environment be possible.

If Germany and France can imbue their cooperation with new life in this way, they can act as a motor for Europe and secure the continent’s prominent position in a global constellation of power.


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