Export champion and Bazaar economy? How Germany is coping with globalization

13 September 20067TH OECD INTERNATIONAL TRADE STATISTICS

EXPERT MEETING (ITS)Dr. Claudia Wörmann

Germany in international competition

Export

Export quota 2005: 40 % (1990: 25 %)engineering: 75 %automotive industry: 70 %chemical industry: 70 %

International sales

DAX-30 74 % German Mittelstand:

Herrenknecht: 92 %Kässbohrer: 95 %

Germany in international competition

Internationalization strategies

Cost reduction / rationalization

Relocation

Reorganization of the value chain

Complementary production

Germany in international competition

German economic trends

Germany’s industrial production base is declining

“Made in Germany” is no longer originally produced in Germany

Transformation from a production site into a commercial hub

Bazaar economy: Statistical evidence and indications

industrial share in the economic value added: 1991: 25 % ↓ 2004: 21 %

vertical integration1991: 39 % ↓ 2004: 34 %

foreign share of intermediate inputs 1995: 20 % ↑ 2000: 26 %

import share of exports 1991: 26 % ↑ 2005: 42 %

• engineering: 30.9 %• chemical industry: 51.7%• automotive industry: 37.0 %

Bazaar economy:Shrinking manufacturing sector

Relationship between manufacturing industry and industry-related services

Outsourcing

Product support services

Boundaries between the sectors are fading

Bazaar economy:An international phenomenon

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Trade openness index

Bazaar economy:An international phenomenon

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Trade openness index

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Bazaar economy: Export-induced value added

German gross value added, in terms of merchandise exports: 1995: 2005:

13.7 % ↑ 20 %

• automotive industry: 2.4 % ↑ 4.3 %• engineering: 2.5 % ↑ 3.3 %• chemical industry: 2.0 % ↑ 2.2 %