Futureless Debate

A Woeful Dearth of Ideas

Vehicles are assembled at a Tesla factory in the US by robots. Can Germany keep up? Source: Reuters

The TV debate lasted a full 97 minutes but failed to answer the all-important question of how Chancellor Angela Merkel and her challenger Martin Schulz plan to prepare Germany for the future. Instead of outlining an agenda for the coming years, the focus was far too backward-looking.

They spent more than half the allotted time talking about the refugee crisis, and especially about Ms. Merkel’s decision in 2015 to open Germany’s borders to hundreds of thousands of asylum seekers. That historic move is for historians to judge. The key issue now for researchers, the country’s middle class and business leaders is how the coming fourth industrial revolution, namely the switch to smart automation with factories that run themselves, will affect the future of work.

Digitalization could destroy millions of jobs. But it also has the potential to create millions of jobs.  It’s not enough for Ms. Merkel and the center-left Social Democrats of Mr. Schulz to reiterate their age-old pledges to ensure nationwide broadband coverage. The debate lacked creative proposals such as the sale of government stakes in Deutsche Post, Telekom or Commerzbank to finance investment in broadband. There was no mention of any plan for a national effort to give the country an up-to-date broadband infrastructure.

It’s not enough for Ms. Merkel and the center-left Mr. Schulz to reiterate their age-old pledges to ensure nationwide broadband coverage.

The brief clash between the two about calls to raise the retirement age to 70 showed that outdated industrial thinking remains deeply embedded in their minds. The SPD leader looked pleased with himself when he badgered the chancellor into ruling out raising the retirement age beyond the current 67. In fact, she has always ruled that out. Business leaders who understand the opportunities provided by digitalization and who are already thinking in terms of flexible working hours find such talk of fixed retirement ages deeply frustrating. Germany needs more flexibility rather than rigid limits and quotas.

The public would surely also have liked to hear Mr. Schulz’s opinion on the demand voiced by the leaders of top companies including Siemens, SAP and Telekom for the introduction of a basic income for all in response to the upheaval digitalization will bring to the labor market. If captains of industry are talking about this, why didn’t Mr. Schulz, who has been banging the drum for social justice in his stump speeches, see fit to address it?

Germany’s future will also hinge on education. Mr. Schulz has made proposals on this in recent weeks. It’s a mystery why he didn’t talk about them them in the debate. If he wants to be chancellor, he has to put this issue on the agenda even if journalists don’t ask him about it. It’s obvious that the central government meeds to take more responsibility for education given the divergent regional standards in Germany and that billions need to be invested in crumbling schools.

But the chancellor and her challenger missed a big opportunity to discuss the simple and justified proposal to invest €1,000 ($1,189) per pupil in digitalization training. Mr. Schulz should have pushed Ms. Merkel into promising cash here rather than telling her to call off talks on Turkey’s accession to the EU, which won’t happen in any case.

In addition, both appear to have forgotten about Germany’s energy revolution, the bold transition to renewable power which Ms. Merkel’s government has described as its biggest reform project. The surcharge on electricity bills that finances the expansion of renewables amounts to a total of €24 billion per year and is a major burden especially for private households and small businesses. Mr. Schulz waffled on when he was asked how much an average family would save with his party’s tax-cutting plans. But the cost of the nonsensical surcharge is clear: €250 per year for a typical three-person household. Mr. Schulz or Ms. Merkel could have shown guts by promising to get rid of it.

Instead, they went on and on about Turkey, immigration, Islam and Islamism for a full 40 minutes, which will likely play into the hands of the anti-immigrant Alternative for Germany party.  These are important issues to be sure, but the overwhelming majority of Germans is equally worried about everyday crime such as the growing incidence of burglaries.

Germany is undeniably doing well. But will it remain in good shape? In those 97 minutes, the word innovation wasn’t mentioned once. Neither was the concept of tax-funded research subsidies. That’s worrying.

To contact the author: sigmund@handelsblatt.com

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