On Thursday, September 8, 6.30-8.30 pm, Das Progressive Zentrum in cooperation with the Progressive Policy Institute (PPI) hosted a roundtable discussion on the App Economy in Germany. The occasion was the publication of PPI’s latest study “The App Economy in Europe: Leading Countries and Cities”.
An input for the debate was provided by Michael Mandel, Chief Economic Strategist at PPI. Michael Mandel holds a Ph.D. in economics from Harvard University and was formerly working for BusinessWeek. Currently, he supervises PPI’s research and policy network across topics such as the data-driven economy, the impact of regulation on innovation, and policies to improve production, investment and job growth. Mandel presented the key findings of his recently published comprehensive study on the European App Economy. A response to Mandel’s input was given by Corinna Visser. Her area of expertise includes telecommunications, high-tech and the internet, which she has been using since 1993. Working as an economic editor in Berlin, she has had a profound interest in the start-up economy since the early 2000s. Today, she is the editor-in-chief of the leading start-up magazine BERLIN VALLEY. The subsequent discussion was chaired by Laura-Kristine Krause, Policy Fellow at Das Progressive Zentrum and Advisor at Bernstein Public Policy. Dominic Schwickert, Director of Das Progressive Zentrum and Lindsay Mark Lewis, Executive Director of the Progressive Policy Institute (PPI) – a close American ally of das Progressive Zentrum – provided welcoming remarks.
Mandel’s starting point, which was much commented on, was the question: Does innovation create or destroy jobs? He then argued that his study shows that the app economy – as one very current form of technical innovation – does indeed create jobs, which furthermore tend to be well paid. However, the importance of the app economy is so far still widely underestimated. This is surprising since the app economy essentially amounts to a „front door“ to the Internet of Things via our use of smartphones. Furthermore, Mandel argued that „density counts“, i.e. that his study suggests that those countries where one city is the clear front-runner in regards to app economy jobs (for example, the UK) are better off than countries, in which the jobs are split between different cities (for example, Germay). Nevertheless, Mandel held that overall Germany with its strong manufacturing base and its potential for digitalization is the only possible future competitor to the US on an economic level.
Visser began her response with a brief historical sketch. She argued that Berlin has a long yet ambiguous tradition when it comes to innovation and the economy. After the second world war, major industries left Berlin, which was once home to Siemens and many other top and innovative companies. In the 1990s mostly service-oriented businesses such as call centers sprang up like mushrooms. Then, in the 2000s, the first tech start-ups were founded in the German capital. Concerning the future of the German app economy, however, Visser took a sceptical position. Her main arguments were that the app economy is both lacking acceptance within the German business world and that it is highly dependent on American companies. Furthermore, she argued, that the current excellent state of the German economy is potentially detrimental to innovation. What is more, a strong link between the „old“ companies and newer, more innovative ones is missing up until now.
The discussion centered on the hindrances to a thriving German app economy and a digitalized German economy, more generally. The German tendency to view technology and technological innovations with scepticism was identified as an obstacle. Related, but perhaps even more relevant is the fact that German tech start-ups are normally either mere copycats or else quickly snapped up by American companies. Many agrred that both new, more innovation-friendly mentalities and well-designed public policies are needed for the German App Economy to thrive and to become a job motor.
The event took place with the friendly support of the SAP SE software corporation.