Do: Only results count.

Policies to Future-Proof Germany's Automotive Industry until 2030, Part 3 of 3

This is the third – and last – segment on the necessary regulatory and sufficient economic conditions to protect and promote the triangle of competitiveness, sustainability and good employment in the German automotive industry. I’ll publish a summary shortly (both English and German!); make sure to receive it by subscribing:

I’ve advocated for a decidedly non-market approach to electrification in part 1, and a decidedly market approach to digitization in part 2, both with infrastructure at the core of each proposal. Today, I’ll discuss how to get better results quicker, both as society and state.

This might sound fuzzier than the climate crisis- and tech-driven topics of decarbonization and digitization. But it’s the conditio sine quo non of progress on either topic.


Do – fast, creatively, resolutely.

I’ve written (ranted) about the “Republik in Aspik” – Germany’s preference for the status quo while playing pretend when it comes to progress – before: here and here. IPPC released a loud report, NASA a picture of quiet urgency below. The Federation of German Industries – no friend of the Greens by any measure – recently chimed in.
Therefore, I will keep it short:

Map shows sea level measured by the Sentinel-6 Michael Freilich satellite in June 2021. Red is higher, blue lower than normal. © NASA Earth Observatory.

A future-proof industry thrives best in an environment that treats change not as a risk to the status quo, but as an opportunity, and even necessity, for a better future. Ideally, that environment includes a government biased towards action, enforcement, and results, while also placing a premium on transparency, communication, and empowerment.

Here are some tips on how to get things done:

  1. Radically speed up planning, implementation. Ditch feasibility studies, model projects, demonstration projects, and bridge technologies – anything that is not the real thing – especially, if it has been done before.1 Don’t modellprojekt it, but moonshot it.2

  2. Keep it simple and clear: Don’t over-engineer, trying to determine every little bit in advance. Decentralize, distribute authority, delegate decisions to those in charge and on the ground. Keep information and interaction flowing.3

  3. Allow for competition and pockets of creative disobedience. Rules are human-made, created to assure better results, not to prevent them. If they don’t serve that purpose, or even hinder progress or better outcomes: ignore them.4

  4. Favor maximum transparency and real input over performative pseudo-participation. Be clear about roles and responsibilities: only governments is accountable to the general public.5

  5. Combine procurement and leap innovation: procure what you need, even and especially if it doesn’t exist yet. Governments are the biggest purchasers around – use that clout for progress. Think DARPA and NASA.6

  6. Don’t outsource the future, but built internal capabilities and organizational memory. Commission only what is clearly outside of government’s scope and responsibility.7

  7. Don’t start before you’ve determined your goals, planned your milestones, established benchmarks, and defined how you’ll measure progress, results and success.8

Obviously, these seven suggestions go beyond automotive industrial policy in Germany. They are also short on detail.9 But let me give you an automotive industry-related example of how we talk too much about how things ought to be, and do too little to make them reality:10

Just yesterday, the German newspaper Tagesspiegel published a short review of the current transportation minister’s performance. Astonishingly, both minister and author measured ministerial performance in legislative acts – even though a federal minister is part of the executive branch. When government and parliament both trade in legislation, who’s in charge of executive action and results?

One of the minister’s legislative accomplishments: this years’ Act on Autonomous Driving. He rejoiced: “(We are) first country worldwide where this is possible. With this, we are setting international benchmarks… With the new Act, we ensure a leading position for Germany.” Other countries,11 as well as Waymo, Tesla and others with millions of miles of actual self-driving experience under their belt, might be forgiven for thinking otherwise.


Weiter so? Or results.

In future-proofing Germany's automotive industry until 2030 (e.g., via decarbonization and digitization), as well as anything else, only results count.
The next government will not only need the right strategies, but also the executional mindset and capabilities, to deliver progress.

The current parties in federal government have been in power for 16 and 12 years, respectively, since 2005. All promise progress, delivered with the soothing comfort of “weiter so”, or continuation, in varying colors.
They all warn against the destructive insanity of those advocating for a better future through more ambitious, progressive change. Here, Einstein’s witticism comes to mind: “Insanity is doing the same thing over and over and expecting different results.”

The German car industry will showcase their vision of the future next week at IAA Mobility. Germans will cast their votes for federal parliament on September 26.
Both will predetermine the route for future-proofing the automotive industry, and Germany: continuation, or change.

Thanks for reading. As always: please tell me where I’m wrong.

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1

The pan-European party Volt has a point when pointing to Zurich or Copenhagen for urban mobility solutions, or Helsinki for digital learning. We need not reinvent the wheel, but can adapt what’s already working elsewhere.

2

Mariana Mazzucato wrote an interesting book about moonshot projects and what she calls the mission economy, rethinking the role of government. (Spoiler: she’s definitely not advocating for the current German model of a moderating government.)
Allow me a short – and somewhat oversimplified – rant about some of Germany’s preferred delaying tactics:

  • Machbarkeitsstudien: Within the laws of physics, things are generally doable. Reserve feasibility studies for the likes of interstellar travel. You still have a full-blown planning phase in front of you.

  • Modellprojekte: What’s the use of proving you could do it, but not doing it? At best, you’re wasting precious time, resources, money. At worst, you’re playing pretend while preserving the status quo while others, e.g., US or China, charge ahead.

  • Schaufensterprojekte: The folly is in the name, “window-dressing”, “for show”. They are Modellprojekte carried out in public for all to see – and then to dismantle.

  • Brückentechnologien: bridge technologies sound like a great way to advance while keeping disruption at a minimum. But they often act less a bridge to the future, but as a bridgehead to retain the status quo, like those company plug-in hybrids, complete with fuel cards, that rarely get plugged in.

3

There’s a lot to be said about control, especially when public coffers are involved. But over-zealous rules that are uncontrollable, unenforceable, and at times unpractical, but work very well in signalling distrust, and will neither attract the best personnel, not inspire the most enthusiastic and creative engagement of your people.
Let maximum transparency be the control, while giving those that know best from experience, and are in charge of getting the job done, the authority to do just that.

4

Administrative reform is as necessary as it is daunting. Decades of tinkering hasn’t made German more agile, or more effective. Trying to fix administration and detangle regulation before getting to the nitty-gritty is a recipe for failure. In a way, concentrating your energy and spending your political capital on changing the legislative, administrative status quo, is succumbing to the status quo.
I know this is unorthodox, and can be slippery slope: the rule of law is one of the strongest bulwark against tyranny, graft and corruption. I’m not advocating to disregard the constitution or BGB, StGB etc, but to push against the sometimes kafkaesk rules and regulations that hinder progress usually at a lower, more operational level. I’m also not advocation to not attempt administrative and legislative reform. It should be done in parallel, with a focus on elimination and simplification, and without hindering progress in the meantime.

5

This advise rubs against the calls for ever more participative and deliberative democracy. I’m a firm (and proud minority) advocate for representative democracy, and the strengthening of existing forms of civic engagement in the political process – from party membership to petitions and consultations and everything in between.
Diluting responsibility and accountability of the institutional pillars of the republic will weaken, not strengthen democracy.
Instead of opening the doors to every NIMBY’s delaying and diluting tactic under the sun, maximum transparency is more effective in holding governments accountable, and creating civic engagement. I’m not advocating against citizen engagement. I do think asking for input before drafting legislation, like the State of Baden-Württemberg is doing, leads to better legislation than asking afterwards to comment on it. But that’s for another newsletter.

6

No, the German Federal Agency for Leap Innovations is not DARPA – they’re not procuring, since they don’t need anything (e.g., in the way that NASA needs a satellite). They are, unfortunately, just underfunded and underpowered cheerleaders.
Funding multiple hydrogen city bus development measures for twenty years, while not changing procurement procedures that hinder purchasing said hydrogen city buses, then wondering why companies don’t build up large-scale industrial production of said hydrogen city buses, and finally purchasing diesel buses while complaining of the lack of availability of hydrogen city buses, is folly. And that’s just one example for the disconnect between public promotion and procurement.

7

Too many public tenders,

  • either describe tasks I would expect to be fulfilled by the commissioning departments themselves, thus building the capabilities inhouse,

  • or describe projects without any discernible success criteria, expecting activity reports rather than proof of success at the end of said projects,

  • or both.

It seems an entire industry could thrive on commissions for performative measures, providing proofs of activity, with little attention to results, real or lasting impact. At the same time, departments in charge gain very little first-hand experience or build institutional knowledge.

8

In other terms: Be an effective project manager. Effectiveness is a better measure for success than efficiency. You are the executive branch. “This will have consequences” is a promise, not a threat.

9

There’s an upcoming post on effective government where I’ll elaborate more, albeit in German.

10

“Talk” includes drafting, debating, passing legislation. “Do” means executing, enforcing, producing results.

11

KPMG’s Autonomous Vehicles Readiness Index ranked Germany’s performance in 2018 at 6 out 20, in 2019 at 8 out of 25, and in 2020 at 14 out of 30 countries. Meanwhile, Singapore, The Netherlands, Norway, United States held top 5 positions each year, regardless of number of contestants.
The infrastructure score pictured above is calculated from six measures: EV charging, 4G coverage, mobile connection speed, broadband, quality of roads, and overall technology infrastructure change readiness. The 2021 report hasn’t been published yet.