U.S. firms should take advantage of recessions in France and Germany by investing in these countries now while prices are depressed and before their economies regain momentum later this year. This was the dominant theme of a technology conference held in Atlanta this week under the sponsorship of the new Center for International Business Education and Research (CIBER) at the Georgia Institute of Technology.
Brenda J. Fisher, the desk officer for Germany at the U.S. Department of Commerce in Washington, graphically described Germany’s current economic ailments, while pointing out that even during a time of recession its economy dominates Europe and maintains some $50 billion in combined trade annually with the U.S.
The German companies that are suffering most from the recession, she said, are those that were “too slow to adjust to a global economy.” These companies, she added, have been plagued by a system that guarantees long vacations and short work weeks.
The impact of global economic developments are felt at all levels of the society, she added. “The average German who sees BMW or Mercedes moving its plants to the United States is disoriented,” she said and forecasted that the “cushy props” of the German welfare state will come under attack.
This pessimistic climate is aggravated by the many elections taking place this year which have brought to the fore unemployment, internal security and housing as pressing political issues. Meanwhile, formerly harmonious government, business and labor ties are under strain.
She pointed out that not a single politician from former West Germany vacationed last year in former East Germany, and described the process of unification to be moving at a “snail’s pace.”
Nevertheless, she said that U.S. firms would do well to consider investing in Germany now, and that many U.S. companies already located there have been able to do well despite the recession.
David Wilsford, director of Georgia Tech’s Brussels Program and a German Marshall Fund Research Fellow based in Paris this year, predicted that France would pull out of its recession in 12 to 18 months. “This is the time to prepare for when the economy recovers,” he added noting that unemployment is 11-12% in France compared to 8.8% in Germany. France’s inflation rate is under 3% and the country has a positive balance of payments record. He said that France was particularly open to technological innovations, and envisioned that regulations guarding the government’s telecommunications monopoly would be loosening up.
The Center is in the process of organizing an executive tour of Munich, Stuttgart and Metz/Nancy — three areas known to be centers for technological innovation and commercialization. Executives of U.S. small and medium-sized firms involved with information technology, telecommunications and associated manufacturing technologies interested in the April 29-May 7 trip should contact CIBER by calling (404) 894-1463 or by faxing (404) 894-6030.
The Center was founded last year with a U.S. Department of Education grant to Georgia Tech’s Ivan Allen College of Management, Policy and International Affairs, and will provide for an array of activities focused on four strategic industry segments — telecommunications; paper making technology; manufacturing; and information technology, especially software