The Federation of German Industries (BDI) warns of deindustrialization and calls for ‘bold’ measures. Secure energy and raw material supply is essential.
Bad times for Germany’s industrial sector: According to the Federation of German Industries (BDI), nearly one-fifth of domestic industrial value creation is at risk. Deindustrialization is a real threat, according to a study commissioned by the BDI from the consulting firm Boston Consulting Group (BCG) and the Institute of the German Economy (IW).
The report identifies numerous challenges, including high energy costs and other cost disadvantages such as taxes, as well as geopolitical factors and internal crises like a shortage of skilled workers and increasing bureaucracy. Considering this “polycrisis,” the BDI calls for a “strong industrial policy agenda” and provides 15 recommendations to enhance competitiveness and economic resilience.
The report details possible policy levers and necessary investments to modernize infrastructure, advance digitalization, and boost demand for green technologies, among other things. Overall, additional private and public investments of 1.4 trillion euros will be needed by 2030.
Critical Raw Material Supply Is Central
A competitive energy supply is the most urgent task, requiring over 400 billion euros alone. The report also frequently addresses the supply of critical raw materials like rare earths and cobalt, which are crucial in many green and digital technologies. The BDI advocates for strategic import partnerships and expanding German and European raw material extraction and processing to reduce critical dependencies and avoid new ones. The BDI calls for implementing the planned German raw materials fund and a similar fund at the EU level. In addition, especially for mining projects, improving societal acceptance is essential.
Additionally, the federation suggests increasing material efficiency, strengthening the circular economy, and improving conditions for storing critical raw materials and intermediate products.
For more on this topic: Recently, Bernd Schäfer, CEO of EIT Raw Materials, also called for a dedicated fund to facilitate the extraction of critical minerals for the European economy.
Photo: iStock/industryview
