Innovation and risk-taking in the German economy

¶ … Germany: a few good risk-takers," by Andreas Tsortzis. It was printed in The Christian Science Monitor. Although this newspaper is American, it provides excellent coverage of foreign events as well. The article I chose was a news article. It focused on complaints by some German economists that there is no innovation in German industry. The author, Andreas Tsortzis, explained that the problem was partly caused by the government funding research and finding out too late that the invention would not be worth the investment.

The article reflects a macroeconomic concept in showing that government support for projects wastes money. A private company would 'cut its losses' a lot sooner because it needs to protect its profits. The government does not need to make profits. Because the government can raise more money through taxes, it does not spend wisely.

A second economic principle the author explained was about Germany's big companies. The author pointed out that they wouldn't even look at new technologies that might make money. He quoted people who said the German government and German industry were both afraid of risk.

According to Mr. Tsortzis, the German economy decreased in size by 0.1% last year. He said the reason was that the government had not invested in research into new technologies. He said that industry had not invested enough, either. Germany's economy is the biggest in Europe. But Germany employs fewer IT workers than its neighbors.