Engineering Summit in Germany: "Ten Lost Years"

"At the Berlin meeting of the key industrial sector, there is a lot of agreement - but also an unpleasant discussion. Has mechanical engineering overslept the digitization?

The German machine builders use their second national stage as well as they can. After the Hanover Fair has either failed or only been possible in a reduced form in recent years, the key branch of German industry used its mechanical engineering summit in Berlin for self-assurance and for tolerably good news. For example, that, despite all the crises, the expectations for the production level no longer need to be tinkered with.

Karl Haeusgen, President of the VDMA industry association and host of Chancellor Olaf Scholz, Economics Minister Robert Habeck and EU Commissioner Valdis Dombrovkis at the multi-day summit, confirmed the expected increase of one percent this year and a two percent decrease for 2023. The message: It is running modestly, but at least it's not getting any worse.

According to the Federal Statistical Office, production in mechanical and plant engineering fell by 0.8 percent in the first seven months of this year. But there is a "slight relaxation in the material bottlenecks," as Haeusgen said. Together with the high order backlog, which will secure employment for companies for around a year, this could result in the estimated production growth for 2022.

This confidence coincides with the personnel plans of many companies. A VDMA survey of 640 of its more than 3,000 member companies showed that half want to increase their workforce in the coming year. 30 percent plan to increase jobs by up to 5 percent, and almost 20 percent want to hire even more employees. 15 percent of the companies expect job cuts, mostly up to 5 percent. "We assume that the machine and plant manufacturers will do everything they can to keep qualified specialists and hire new ones, because good people are scarce and will remain so," said Haeusgen.

"Zero productivity gains after ten years of Industry 4.0"

Apart from these developments and the benevolent speeches by Scholz and Dombrovkis on Tuesday, however, the question was also raised as to whether the industry is making appropriate use of its technological expertise. In Michael Finkler, it was an insider who positioned himself so clearly that is rare for representatives of the association. Finkler is managing director of the Pro-Alpha group of companies from Weilerbach in Rhineland-Palatinate, which specializes in software for medium-sized companies and has more than 2,000 employees with an annual turnover of around 270 million euros.

He is also Chairman of the Board of the VDMA Software and Digitization Association. As such, he puts forward pointed theses. 

 

For example: There is "zero productivity progress after ten years of Industry 4.0"; today's level of productivity in industry is at the level of 2011; productivity in mechanical engineering has even fallen despite high capacity utilization; the broad mass of companies had made little progress; instead of organizing and standardizing, “the waste has been digitized”.

 

There was often talk of developing new, digital business models, creating added value through digitization, possibly setting up platforms. But in many places there is nothing to see. Finkler recognizes "ten lost years". Germany has "lost the connection in the industrial platform economy", while corporations such as Google, Microsoft or Amazon are pushing the development of industrial platforms.

 

"It's not about criticism for me," said Finkler in an interview with the F.A.Z. “Rather, the topic and the association with its members are very important to me. But it is not enough that we have a few flagships, but that the topic of digitization does not reach the breadth of the industry.” The flagships mean companies such as Trumpf, Feste, Homag and a few medium-sized companies. Much too little. "The attitude of the management is the most important thing, it's not a question of the size of a company, but of the will," he says. When it comes to digitization, medium-sized companies can “quite shift up a gear”.

The fact that IT companies could take on German mechanical engineering was initially considered a major threat, but over the years the assessment that Google, Amazon and Co. probably did not think so small-scale and were not interested in machine data prevailed. Finkler outlines their situation like this. “Companies like Google or Microsoft will not play the same role as in retail, where they have exclusive access to customers – but they also want their piece of the pie in mechanical engineering.” Deputy General Manager Hartmut Rauen spoke for the VDMA. Even the chancellor credited the machine builders with their skills praised in digitization. This is everyday. And with "Manufacturing-X" an alternative to the central platform solutions is being developed."

 

Nobeliu apdovanota už įžvalgas, padėjusias išgyventi finansų krizę

   „Nobelio ekonomikos mokslų premija pirmadienį buvo įteikta buvusiam Federalinio rezervo vadovui Benui Bernanke ir dar dviem JAV mokslininkams, kurių darbas padėjo vyriausybėms ir centrinių bankų vadovams įveikti pasaulinę finansų krizę ir išvengti ekonominės depresijos, kokia buvo praėjusio amžiaus ketvirtajame dešimtmetyje.

 

    P. Bernanke, kuris per krizę ėjo FED pirmininko pareigas, šiuo metu yra žymus Brookings instituto vyresnysis bendradarbis. Jo kolegos apdovanojimuose yra Douglasas Diamondas, Čikagos universiteto ekonomistas ir Philipas H. Dybvigas, Vašingtono universiteto Sent Luise ekonomistas.

 

    Stokholmo universiteto ekonomistas Johnas Hassleris, paskelbdamas premiją, sakė, kad jų tyrimai buvo neįkainojami per 2008 m. krizę, atvedusią pasaulinę finansų sistemą prie žlugimo slenksčio.

 

    Apdovanojime p. Bernanke buvo cituojama 1983 m. publikacija, kurioje bankų žlugimas buvo nustatytas, kaip raktas į ekonomikos nuosmukį paversti sunkiausia XX amžiaus depresija. „Tuo metu tai buvo lūžis su dabartiniu požiūriu“, – sakė J. Hassleris. „Bankai žlunga, bet buvo manoma, kad tai buvo krizės pasekmė, o ne krizės priežastis“.

 

    P. Bernanke pirmadienį sakė, kad jam „neįtikėtinai didelė garbė“ gauti premiją už bankų ir finansų krizių tyrimus.

 

    „Nuo 2006 iki 2014 m. buvau įtrauktas į pasaulinę finansų krizę, kai finansų sektoriaus problemos sukėlė didžiulių problemų realioje ekonomikoje tiek čia, tiek visame pasaulyje“, – sakė jis per renginį Brookings mieste Vašingtone. Dėl šių klausimų buvau labai pasiryžęs kartu su kolegomis padaryti viską, ką galiu, kad finansų sistema nesugriūtų, nes tvirtai tikėjau, kad jei taip atsitiks, tai sužlugdys likusią ekonomiką.

 

    Tylus akademikas, didžiąją savo karjeros dalį praleidęs studijuodamas Didžiąją depresiją ir centrinę bankininkystę Prinstono universitete ir Stanfordo aukštojoje verslo mokykloje, ponas Bernanke išaugo į politikos formavimo priešakį tuo metu, kai JAV pradėjo galimą šios temos kartojimą, temos, kurią jis išmoko iš istorijos knygų.

 

    Istorikai dabar vertina poną Bernanke už tai, kad jis išvengė ekonominės nelaimės, greitai sukūręs agresyvią naują pinigų politiką – žemiausias palūkanų normas, paskolas bankams ir kontroversiškas obligacijų pirkimo programas – per ir po finansinės krizės, kuri prasidėjo 2007 m. ir truko beveik dvejus metus.

 

    Jo mantra tapo ta, kad jis darys „viską, ko reikia“, kad išvengtų ekonomikos žlugimo, ir daugeliu atžvilgių jis tai padarė. Atsigavimas prasidėjo, praėjus maždaug dvejiems metams nuo panikos pradžios, ir tapo ilgiausia plėtra JAV ekonomikos istorijoje.

 

    Dėl lėto atsigavimo ir nepopuliarių bankų gelbėjimo P. Bernanke taip pat tapo žaibolaidžiu kritikai, ypač iš jo paties Respublikonų partijos.

 

    Apdovanojime ponui Diamondui ir Dybvigui taip pat buvo cituojama 1983 m. publikacija, kurioje paaiškinta, kaip bankai atlieka lemiamą ekonominį tarpininkų vaidmenį tarp taupytojų ir įmonių, į kurias jie galiausiai investuoja per „brandumo transformaciją“.

 

    Tačiau dokumentas parodė, kad imdami trumpalaikius indėlius ir duodami ilgalaikes paskolas, bankai yra „iš prigimties pažeidžiami“, sakė J. Hassleris. Papildomas pono Diamondo darbas paaiškino, kad bankai stebi skolininkus taupančiųjų vardu ir turi unikalią įžvalgą apie įmones, todėl bankų nepavyks greitai pakeisti naujokais, jei jie žlugtų.

 

    „Kai bankrutuoja, šios žinios dingsta“, – aiškino J. Hassleris. „Štai kodėl bankų krizės turi ilgalaikių pasekmių“.

 

    Kalbėdamas su žurnalistais M. Diamondas sakė, kad apdovanojimas jį nustebino. „Miegojau labai kietai, o tada staiga pratrūko mano mobilusis telefonas“, – sakė jis. Ponas Diamondas sakė, kad centriniai bankininkai perėmė jo tyrimų su Dybvig pamokas.

 

    „Gerai struktūrizuota finansų sistema yra labai pažeidžiama pačios baimės baimės“, – per spaudos konferenciją Čikagos universitete sakė D. Diamondas. „Benas [Bernanke] tai įtraukė savo pasiūlymuose dėl politikos, ir aš manau, kad centriniai bankininkai apskritai įsisavino tą pamoką.

 

    2008 m. finansų krizė parodė, kokie svarbūs ir trapūs gali būti bankai, sakė Harvardo universiteto ekonomistas Gabrielis Chodorow-Reichas. 2014 m. publikuotame dokumente M. Chodorow-Reich atnaujino P. Bernanke Didžiosios depresijos tyrimą ir nustatė, kad įmonės, kurios skolinosi iš nesveikų skolintojų, buvo mažiau linkusios samdyti ir investuoti nei įmonės, kurios pasirinko sveikesnius skolintojus.

 

    Visame pasaulyje didėjant palūkanų normoms, pastaraisiais mėnesiais atgijo susirūpinimas dėl bankų ir kitų finansinių institucijų atsparumo. Praėjusio mėnesio pabaigoje Anglijos bankas įsikišo į JK vyriausybės obligacijų rinką, siekdamas paremti šalies pensijų fondus.

 

    Ponas Diamondas sakė, kad reguliuotojai buvo „daug geriau pasiruošę“ grėsmėms finansiniam stabilumui, nei buvo prieš 2008 m., kai „nebuvo suvokimo, kad yra aukštas lygis pažeidžiamumo.“ [1].

1. U.S. News: Nobel Given for Insights That Helped in Financial Crisis
Hannon, Paul. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 11 Oct 2022: A.2.

Nobel Given for Insights That Helped in Financial Crisis

"The Nobel Prize in Economic Sciences was awarded Monday to former Federal Reserve chief Ben Bernanke and two other U.S. academics whose work helped governments and central bankers navigate the global financial crisis and avoid an economic depression of the kind seen during the 1930s.

Mr. Bernanke, who served as chairman of the Fed during the crisis, is currently a distinguished senior fellow at the Brookings Institution. His fellow recipients are Douglas Diamond, an economist at the University of Chicago, and Philip H. Dybvig, an economist at Washington University in St. Louis.

Announcing the prize, Stockholm University economist John Hassler said their research had proved invaluable during the 2008 crisis, which brought the global financial system to the brink of collapse.

The award to Mr. Bernanke cited a 1983 publication establishing bank failures as key to the transformation of an economic recession into the most severe depression of the 20th century. "At the time, this was a break with the current view," Mr. Hassler said. "Banks fail, but it was thought that was a consequence of crisis, rather than the cause of crisis."

Mr. Bernanke said Monday that he was "incredibly honored" to receive the prize for his research on banks and financial crises.

"From 2006 to 2014, I was involved in a global financial crisis where the problems in the financial sector caused tremendous problems in the real economy, both here and around the world," he said at an event at Brookings in Washington, D.C. "Thinking about these issues made me very determined to do everything I could, along with my colleagues, to try to prevent the financial system from melting down, because I strongly believed that if that happened that it would bring down the rest of the economy."

A quiet academic who spent most of his career studying the Great Depression and central banking at Princeton University and the Stanford Graduate School of Business, Mr. Bernanke rose to the forefront of policy-making just as the U.S. was entering a potential replay of the subject he mastered from history books.

Historians now credit Mr. Bernanke for averting an economic calamity by quickly devising aggressive new monetary policies -- rock-bottom interest rates, loans to banks and controversial bond-buying programs -- during and after a financial crisis that started in 2007 and spanned nearly two years.

His mantra became that he would do "whatever it takes" to prevent an economic collapse, and in many respects he did. A recovery began about two years after the panic started and became the longest expansion in U.S. economic history.

The slow recovery and unpopular bank bailouts also made Mr. Bernanke a lightning rod for criticism, especially from his own Republican Party.

The award to Mr. Diamond and Mr. Dybvig also cited a 1983 paper that explained how banks play a crucial economic role as intermediaries between savers and the businesses they ultimately invest in through "maturity transformation."

But the paper showed that in taking short-term deposits and making longer-term loans, banks are "inherently vulnerable," Mr. Hassler said. Additional work by Mr. Diamond explained that banks monitor borrowers on behalf of savers and have a unique insight into businesses that can't quickly be replaced by newcomers if they go bust.

"When a bank fails, this knowledge disappears," Mr. Hassler explained. "That is why banking crises have long-lasting consequences."

Speaking to reporters, Mr. Diamond said the award had taken him by surprise. "I was sleeping very soundly, and then all of a sudden, off went my cellphone," he said. Mr. Diamond said central bankers have absorbed the lessons from his research with Mr. Dybvig.

"A well-structured financial system is very vulnerable to the fear of fear itself," Mr. Diamond said in a press conference at the University of Chicago. "Ben [Bernanke] internalized that in his suggestions on policy, and I think central bankers in general have internalized that lesson."

The 2008 financial crisis showed just how essential and fragile banks can be, said Gabriel Chodorow-Reich, an economist at Harvard University. In a 2014 paper, Mr. Chodorow-Reich updated Mr. Bernanke's research on the Great Depression and found that firms that borrowed from unhealthy lenders were less likely to hire and invest than firms that stuck with healthier borrowers.

With interest rates rising around the world, worries about the resilience of banks and other financial institutions have revived over recent months. Late last month, the Bank of England intervened in the market for U.K. government bonds to support the country's pension funds.

Mr. Diamond said regulators were "much better prepared" for threats to financial stability than they had been in advance of 2008, when "there wasn't a perception that there was a high level of vulnerability."" [1]

1. U.S. News: Nobel Given for Insights That Helped in Financial Crisis
Hannon, Paul. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 11 Oct 2022: A.2.