A view from Davos
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At the World Economic Forum, hundreds of leaders from business, politics and the NGO community gathered to tackle the most complex questions of our time. Roland Berger was one of them.
Roland Berger, Chairman of the Advisory Board of the company that bears his name was among the decision-makers to weigh in on the state of global affairs as part of the annual World Economic Forum in Davos. Rising fears of a global recession resulting from the real estate crisis in the US dominated the agenda.
Participants were "very concerned indeed" about the turbulence on the financial markets. "We are currently experiencing a general financial crisis that began in the United States as purely a mortgage crisis and that is now affecting the entire world. The American economy is on the verge of a recession", Berger told Bloomberg Germany. That will affect not only Europe's economy, but also China's, whose main export market is the US.
Roland Berger, Chairman of the Advisory Board of the company that bears his name was among the decision-makers to weigh in on the state of global affairs as part of the annual World Economic Forum in Davos. Rising fears of a global recession resulting from the real estate crisis in the US dominated the agenda.
Participants were "very concerned indeed" about the turbulence on the financial markets. "We are currently experiencing a general financial crisis that began in the United States as purely a mortgage crisis and that is now affecting the entire world. The American economy is on the verge of a recession", Berger told Bloomberg Germany. That will affect not only Europe's economy, but also China's, whose main export market is the US.
In Berger's view, participants had understood the gravity of the situation for the entire global economy. Germany could, however, detach itself from the crisis, to some extent, Berger said. Emerging economies such as China, India and Russia were investing heavily in building up their infrastructure. This would continue to drive demand for German exports, such as capital goods, infrastructure, chemicals and expensive luxury goods.
Reflecting on the role of German business in an international environment, Berger said: "Most German companies today have a very good position. They have excellent, truly modern product ranges." Nevertheless, they have no choice but to continue to increase productivity, cut costs and possibly even relocate factories abroad. "Nokia will not remain an isolated case," Berger said. "Other German companies will have to follow suit in order to achieve an overall cost mix that remains globally competitive in the long term." Berger's advice to German companies?: "Offer the global market more innovation, more new technologies and more superior services."
Berger pointed to the fact that economic growth for 2009 was already expected to be less than 1%. This would create additional unemployment and new burdens on social security systems, he said.
He was alarmed by the fact that the financial crisis was not being sufficiently managed worldwide. The US Federal Reserve had cut its key lending rate, while the ECB had taken a more conservative approach. Berger called upon politicians in the leading economies to act together to tackle this difficult situation, suggesting the G8 take a concerted approach. Most of the players were not prepared for the sudden crisis. He himself has been expecting the situation to destabilize for months: "I sold all my stocks last fall."
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Reflecting on the role of German business in an international environment, Berger said: "Most German companies today have a very good position. They have excellent, truly modern product ranges." Nevertheless, they have no choice but to continue to increase productivity, cut costs and possibly even relocate factories abroad. "Nokia will not remain an isolated case," Berger said. "Other German companies will have to follow suit in order to achieve an overall cost mix that remains globally competitive in the long term." Berger's advice to German companies?: "Offer the global market more innovation, more new technologies and more superior services."
Berger pointed to the fact that economic growth for 2009 was already expected to be less than 1%. This would create additional unemployment and new burdens on social security systems, he said.
He was alarmed by the fact that the financial crisis was not being sufficiently managed worldwide. The US Federal Reserve had cut its key lending rate, while the ECB had taken a more conservative approach. Berger called upon politicians in the leading economies to act together to tackle this difficult situation, suggesting the G8 take a concerted approach. Most of the players were not prepared for the sudden crisis. He himself has been expecting the situation to destabilize for months: "I sold all my stocks last fall."
If you have questions regarding this, or any other story, please do not hesitate to contact us:
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