What the Shift in the US Business Model Means for Germany
Changes and disruptions are noticeable and visible in societies across Germany, Europe, and the US. My impression is that in most discussions about this topic, we are oversimplifying the explanations. I want to focus on the profound shift in the prevailing global business model as a driver of many years of globalization.
From my current perspective in the US, I daily experience how radically governments, science, and businesses are reinventing the US business model. AI, data, and demand management are the new levers – and the speed of this transformation is breathtaking. Germany lacks the innovation pressure, unity, and pragmatism. While the US takes action, we are still in discussion. But even more fundamentally, Germany lacks a common understanding of the situation and, therefore, a unified strategy. Why are there no true strategists in Germany speaking with one voice?
The end of centralized economies of scale
For the past five decades, there was a clear model: The US created insatiable demand with technology and its consumer-driven domestic market – and Germany served it with “made in Germany” machines for precise mass production. Both business models were complementary and based on one principle: the economy of scale. The goal was clear: more and more products for ever larger markets, produced more efficiently, cheaply, and in mass.
But this era is over. The idea that growth comes from scaling physical products no longer holds. The US has recognized this – Germany has not. In no entrepreneurial circle or investor round is this being discussed, nevermind politics. Today, the focus is shifting from supply-driven to demand-driven management. It’s no longer about producing cheaper physical products; it’s about access to platforms, data, and digital services. In this new logic, power lies with those who control demand – not with those who optimize production.
From a German perspective, Trump’s policies mainly represent chaos and provocation. However, behind the trade tariffs, protectionist measures, and bringing production back to the US, there is a clear strategy: The new US business model aims to secure control over demand – and with it, power over global markets. This explains why the US is already reducing its dependence on China and Asia and rethinking its energy policies. The US will no longer depend on ever-cheaper products and energy from other parts of the world.
But what does this mean for Germany?
Our business model relies on exporting machines to optimize physical goods – but a data-driven world with localized production needs fewer shipping containers and secure trade routes. It needs cloud infrastructures. The US business model is becoming a one-sided blueprint for the global economy, while Germany still clings to the virtues of machine-driven engineering and efficiency. But in an AI-driven world, efficiency gains in centralized production environments are necessary but no longer sufficient. The key is the ability to control demand. Only by doing so can wealth be preserved and created. Germany is at a crossroads: either we understand this new logic, or we will be controlled by the platforms of the US and China. When will the realization, and thus change, come?
50 years of a US-German symbiosis are over
The business models of the US and Germany were complementary in their differences. And this made them incredibly successful in the supply-driven industrial age.
While the US drove innovations in technology and platforms that made economies of scale possible, Germany’s precise mass production provided the physical goods that used and made these innovations globally tradable. A perfect symbiosis.
But the real secret to success was not just production – it was demand. The US, with its enormous domestic market and consumer-driven society, drove global demand. How did it work in practice? Cheap production abroad, technological leadership at home – this combination made the US business model unbeatable. The US provided consumers for the affordably priced products created by mass production.
The US also played its hand geopolitically. The US dollar as the world’s reserve currency and free trade agreements ensured its global influence. Production sites in Asia, combined with US technology and a global distribution network, made the US the hub and overseer of the world economy. This led to critical views of the US in many parts of the world.
But now this model is being renewed. Energy independence and AI-driven markets are changing the rules of the game. The US will no longer secure global trade routes because it no longer needs fossil fuel imports and is systematically reducing its dependency on Asian supply chains. The new goal: control over demand, platforms, and data. Globally. By controlling the data flows of its cloud providers, the US essentially controls the flow of goods worldwide.
Germany was more connected to the US world model than to Europe. The reunification, the euro, the expansion of the EU, and then the contracts for Russian gas distracted us and made us forget what our business model was actually based on. Germany has been dreaming for decades, not grasping the reality. The bitter truth: Our business model is broken and cannot be restored. We will not control demand – that power lies with platforms and data infrastructures, which are firmly in US hands.
But there is another way! Our strength lies in engineering. Instead of focusing on one-sided incremental efficiency gains in the old system, we must drive forward the model of decentralized production. Globally connected production sites that transfer economies of scale into the decentralized world, instead of central mass production. But no one in Germany is talking about this, no alliances of SMEs that think big, integrated, and networked – instead of in family-run isolation. World leaders in niches will not take us forward in this new connected world.
The harsh reality: The US has a strategy – Germany, none
What does this mean in practice? The US, as seen today, remains the global pace-setter. With or without us, they are using deregulation and data-driven innovation to rewrite the rules of the game – faster, more flexibly, and with a focus on digital value creation. With the new wonder weapon of AI, higher tariffs, and the deregulation of the US economy, the US is pushing the world into digital service realms. Growth will no longer come from production and higher efficiency in manufacturing. The bitter truth: What we do well in Germany will be enough for a few more years in machinery and robotics, but it will not be enough to sustain our prosperity.
All growth and productivity increase (the essential factors for the development of wealth) will mainly come from controlling data flows and managing services. This power is firmly in the hands of US companies. With control over the data flows of their cloud providers, they effectively control where and how physical products are consumed.
China and Russia have realized that destabilizing the other side and technological isolation from US dominance is their only chance.
Germany is stuck in the old model an must choose which side it wants to cooperate with in the next 20 years. The world no longer needs an unimpeded flow of goods as long as data can flow unhindered – we’ve already ensured that. Today, no car, no news broadcast, no machine manufacturing company operates without US IT infrastructure. At least in the West. The vote for European or German data sovereignty was already lost more than ten years ago. It’s absurd to try and change that now, and ultimately it weakens our remaining forces.
Germany and Europe, like the rest of the world, must reposition themselves in this future system and the new geopolitical reality.
Why tweaks won’t suffice: Germany needs a restart
Do we all know the reality? Germany is facing its probably last possible turning point. While the US shortens its innovation cycles through deregulation and AI-based business models, Germany is stuck in a web of bureaucracy, slow processes, and outdated certainties. Our former strength – optimizing physical production – is losing relevance because software, automation, and platforms are taking over value creation.
We must admit that the mistakes of the last 20 years are catching up with us. A failed energy policy with high prices has led to deindustrialization. The migration policy focused on quantity instead of quality – the result: Germany lags behind in education and productivity among peer industrial nations (G7, G8). At the same time, new tariffs and geopolitical block-building threaten our export-oriented model that depends on free markets.
But that’s only half the truth: Even if Germany corrected all its mistakes, it would not be enough to get back on track. And this point makes this situation different from any other crisis in the last 20 years. The core model of the German economy no longer works. The bitter truth: Organizing efficiency and production-scale effects no longer offers an advantage.
Germany needs a restart
Germany needs a complete reboot – a new focus on data-driven business models, local demand management, and agile, connected production systems. Without this change in direction, Germany will remain a passive player in the digital platform world – not the architect of a positive future.
Initiative for building new realistic options
Only through a hard transformation will Germany have a chance to secure a safe place in this changed and changing world. This can only happen with a clear commitment to the Western world, a focused use of our remaining innovation power, and a renewed commitment to performance. Germany must tackle the issue of deregulation decisively. Along with these mindset basics, clear substantive programs are needed. Politics, businesses, and society must work together on the following facts:
- Transatlantic cooperation in connected industrial production
Localized, connected factories: Germany can use its remaining industrial strength and push the digitalization of factories forward. These factories would produce locally but be operated in a connected way, transforming economies of scale from central to decentralized. Germany can and must become a leader in this development. - Focus on robotics and automation to promote local manufacturing
Robotics solutions for Western industries: Germany can apply its expertise in robotics and automation to provide technologies that enable local manufacturing without reliance on cheap labor. - Geopolitical reorientation
Clear positioning of Germany as a close ally of the US to emphasize shared values and interests and strengthen cooperation in key areas. Alignment on security issues, clear partnerships, and alliances with US companies and institutions to develop joint business models and market strategies. - Clear talent and performance promotion
Adapting migration policy to attract the best and brightest young people who want to further develop Germany. Germany has a claim to be socially just. But for this claim to be meaningful, we must recognize and promote the performance of each individual. Social justice is only tangible when it is based on achievement!
With a strategy like this and consistent implementation, Germany may still have a chance to get back on track. Clear strategy and joint execution are untested methods for Germany so far. Transformation, turning points – all clichés.
I will focus my energy on actively shaping this breakthrough – as an initiator, partner, and supporter. Can we make it a movement and finally set the course for the future?
