Australia could take a leaf from the restored German economy

There are 4600 German companies in Russia, 3000 of them in Moscow. German direct investment in China totaled 90 million Euros invested in 390 projects.

Some German companies involved in overseas projects include energy supplier Wintershall which has been doing a joint venture with a Russian company Lukoil for the last 10 years, the oldest joint venture between a west European and Russian company. German chemical giant Lanxess is in a joint venture with China’s Yaxing Chemical Company.

Because Germany is such a big exporter, it will have links with countries and businesses around the world which makes the joint venture a natural fit. For German companies, the joint venture overseas keeps costs down and provides a more flexible work environment. Germany’s propensity for joint ventures suggests that many exports coming out of these markets might originate out of a joint venture with a German company.

What are the lessons from Germany? Government support for strategically placed manufacturing concerns that work off Australia’s competitive strengths (e.g a highly skilled workforce, a booming resources sector, geographical features that are perfect for stress testing products) is critical. Other important features are developing closer links between industries and universities, and creating a nexus between manufacturers and their financiers. The German model shows there is much to be learned.