The whole world, including humanity and each individual, are facing significant structural challenges. The world is changing faster and faster, a point I have already mentioned in many articles. The Corona pandemic continues to dominate our lives since 2020, affecting our personal actions in both private and professional settings, as well as politics and the economy.
Moreover, developments that have been impacting the economy and society for some time and will continue to do so in the short-, medium- and long-term, include digitization, decarbonization, demography, and de-globalization.
I want to focus on these four Ds and aspects - and why we need to address them in design and user experience.
Digitization
Digitization is a challenge which affects everyone: businesses, the government, and society as a whole. The level of digital advancement varies greatly within the business world, with large companies, companies in southern Germany, and those in urban areas being the most progressed.
Decarbonization
The tightening of climate targets due to the EU Commission's Green Deal increases the pressure on the German economy. The required reduction in greenhouse gas emissions can only be achieved if renewable energy sources replace fossil fuels and emission-intensive production processes can be replaced by climate-friendly technologies.
Decarbonization requires a substantial transformation which will impact most areas of economic activity.
De-Globalization
The German economy relies more on export than many other comparable economies. Export orientation provides great opportunities, but also increasing risks, such as dependence on global demand.
Since 2008, significant crises have occurred much more frequently than expected: the global financial crisis, the Euro debt crisis, the Russia crisis, Brexit, tendencies towards de-globalization, Trump's protectionism, increased geopolitical rivalries, and the crisis of the World Trade Organization (WTO).
Demographic change
The demographic change will lead to a significant reduction in the availability of skilled workers in Germany in the next 10 to 20 years. The dampening effects of these shortages on Germany's growth dynamics could be offset by boosting labor productivity and total factor productivity. However, additional innovation impulses are necessary for this.
Innovations depend not only on research spending and new start-ups but also on the availability of skilled workers, particularly in the fields of mathematics, IT, natural sciences, and technology (MINT). It is expected that there will be an increasing demographic replacement demand for these workers. This means that there is not expected to be a sufficiently high supply of MINT workers necessary for additional innovation impulses.
In the past, the expansion of skilled workers in innovation- and export-strong industries was only possible because the potential of older workers, women, and immigrants was increasingly utilized. The critical importance of immigration is also evident in the rapidly increasing proportion of inventors with foreign roots in all patent applications in Germany.
And what does that mean?
Germany has extensive efforts ahead to meet disruptive trends' challenges - digitization, decarbonization, demography, and de-globalization. The economy is at the center of this transformation.
The key recommendation for digital policy, which broadly affects all the challenges addressed in this study, is the expansion of digital infrastructure. Particularly to advance digitalization in public administration, a well-equipped digital agency should be created that is ready for quick deployment. Promotion of the European platform ecosystem, GAIA-X (btw SAP is one of the Founding Members), aims to help businesses participate in the data economy.
The availability of renewable energy is essential for successful decarbonization. Domestic capacities and imports of renewable energy carriers are needed. In terms of climate policy, it is crucial to have smart tools that incentivize investments in climate-friendly procedures and equipment. International coordination of climate policy is also necessary. Otherwise, emissions will only be relocated to other sites instead of being genuinely avoided.
Research policy should support transformation through targeted, mission-oriented research funding and promote the innovation activities of small and medium-sized enterprises by expanding research allowances.
Education policy should tap all educational potentials, reinforce MINT competencies, and accompany the transformation process in digitization, decarbonization, and their interfaces through a significant expansion of further education at universities.
Immigration policy can support the securing of skilled workers by expanding immigration via the education system and improving administrative processes under the new Skilled Immigration Act.
In trade policy, it is crucial for Germany and the EU to continue advocating for open markets. To ensure fair competition, additional measures against competitive distortions through China are necessary. The size of the EU single market can be used to enforce market openings or fend off trade barriers.
Comments
Post a Comment