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OECD says Germany needs greater innovation

AFP/The Local · 26 Mar 2010, 16:59

Published: 26 Mar 2010 16:59 GMT+01:00

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It is "of crucial importance for the balance of German economy" that it starts "relying less on price competitiveness and more on innovation," while also "strengthening the role of the service sector," OECD Secretary General Angel Gurria told a press conference in Berlin.

Improved education and more domestic market competition would help Germany emerge from the economic crisis with a stronger economy, the Organisation for Economic Cooperation and Development added in its 2010 survey of Europe's biggest economy.

"While many reforms have been put in place already, more needs to be done to boost potential growth in sectors serving domestic demand," it added.

The comments echo those of economists who say Germany's strong export sector needs help to ensure a sustained recovery from the country's worst post-war recession, when output contracted by more than five percent.

Some eurozone trading partners have also pressed Berlin to stimulate domestic demand rather than strive to become more competitive, suggestions that have gotten a cool reception from German media and authorities. They argue that Europe should take its lead from those best able to compete with economies in Asia and the Americas.

Gurria noted that "Germany was operating with the same currency, the same trade rules, on a level playing field" with its eurozone critics.

Meanwhile, while unemployment has resisted the downturn better than feared, at around 8.7 percent of the workforce in February, the OECD said: "The crisis has revealed the risk that a dual (level) labour market may emerge.

A growing trend to use more temporary workers could trap them in unstable jobs that hampered their careers and overall productivity, the report said.

"Countries with a large difference in regulation between regular and temporary work contracts are at risk of developing a dual labour market, as has occurred in Spain and Japan," it warned.

The OECD forecast that the German recovery would be "relatively slow" and that unemployment and the public deficit would rise further.

Berlin's fiscal policy "needs a specific exit strategy with focus on consolidating public finances over the coming years," the report said.

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The German government forecasts economic growth of 1.4 percent this year, while the OECD advanced an estimate of 1.3 percent, with a 1.9 percent expansion in 2011.

"The GDP (gross domestic product) level prevailing at the beginning of 2008 is projected to be reached again only by 2013," it added.

"The challenges going forward are to ensure the continued high performance of the export sector and broaden this performance to the other sectors of the economy," the OECD concluded.

AFP/The Local (news@thelocal.de)

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Your comments about this article

22:45 March 26, 2010 by LMB222
That's not new, but sadly I'm not sure Germany is going to be able to pull it. I'm in the "innovation sector", and I meet with the same "glass ceiling" any other creative person meets in Germany. It's not that tough, the ceiling, but it's there, and in present-day Europe's lazy labour market it's simply easier to become a banker, than to spend 5 years studying the bandgap of doped silicon.
01:26 March 28, 2010 by peschvogel
Brain drain....The best Germany can do these days is copy...
22:02 March 30, 2010 by dbert4
Yeah? Who is it that they're copying, not GM, Ford or Chrysler....German cars work and are SELLING!
06:50 March 31, 2010 by peschvogel
Everything else but German Cars dbert4. Get out of your German export business model. Just look at your culture and products. Your becoming "Americanized" faster than anyone else...Schade...
08:22 September 7, 2012 by honeybeee
Innovation literally means the development of new customer value through solutions that meet new needs, unarticulated needs, or old customer and market needs in new ways. This is accomplished through different or more effective products, processes, services, technologies, or ideas that are readily available to markets, governments, and society. It really can help a nation to become stronger and smarter as well as the same with a company¦#39;s situation.

As being heard Germany high-tech auto-parts supplier Schaeffler Ag has a good legacy of innovations. In 2011, the German Patent and Trademark Office (¦quot;Deutsches Patent- und Markenamt¦quot; ­DPMA) granted 1,832 patents to Schaeffler, an average of seven inventions per business day.The increase of 11.6 % compared to prior year again puts Schaeffler in fourth place in the DPMA statistical ranking of most innovative companies in 2012, once more demonstrating Schaeffler¦#39;s innovative strength, a deciding factor contributing to the company¦#39;s competitive position.The PACE award Schaeffler received for its valve control system UniAir and the Steel Innovation Award received for the centrifugal pendulum-type absorber in 2012 underlines .

The fact that innovation is deeply rooted within ¦quot;Schaeffler¦#39;s DNA¦quot; and innovation really prompts this group become stronger .So maybe all high-tech companys¦#39; needs to do more researches in the real innovation which can let them become the ahead of whole industry. Let the whole society become more innovation to deal with current economical recession and reboom it soon .
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