Yeah, but how many middle class families, can these niche super-high end sectors making state of the art optics for the semiconductor industry, feed vs the automotive and industrial sector.

What will happen to Germany's famous manufacturing sector based middle class? Have you seen the job requirements for working at a company like Zeiss? It's MSc and above. All those factory workers can't go get a PhD in optics and physics and switch to designing mirrors and lenses.

It will mean a speedrun of UK's deindustrialization which itself went horribly, with dead cities, homelessness, unemployment and drug abuse. Or it will be like current day France with constant rioting and looting as all those cheap migrant workers Germany invited for their factory work, will be left without jobs.

So the way I see it, the German gov is stuck between a rock and a hard place, needing to use taxpayer money to subsidize a manufacturing industry that depends on cheap labor and cheap energy, to stay in Germany and not off-shore immediately and create mass unemployment.

Sure! But it's a really substantial part. If this branch of "Germany-AG" gets into trouble this will have noticeable consequences.

> Carl Zeiss, for example, is a big company doing state-of-the-art work.

There is always some company which makes good money and is important. The point was about the big picture. And by now even the usual big players, which are "too big to fail" and are strongly supported by the state, start to get nervous. The article cited quite some of the most important players and some of the most influential economy think tanks.

> Do you know by the way why Germany and software don’t go well together? What do you think?

Complicated question. I don't know, to be honest.

It's not like we don't have any SW industry. But it seems not to catch up.

From the global viewpoint Germany has SAP, but else?

I don't think it's because we "can't do software". But it seems we can't do any relevant software.

Two points come to mind:

We don't have a culture of "pure software products". Most SW is in industrial applications. But this SW isn't very visible, and most of the time it is considered just a secondary or even tertiary part of a product. In the eyes of the management it's often still "just a byproduct" or even "pure cost". The car people for example really didn't get it until just lately that SW is now a primary sales argument. They're still trying to catch up. But actually it's quite laughable what they're doing because they still think you can "produce SW as any other car part"… Same goes for a lot of other companies. SW is just a matter of expense. They don't try to innovate here, they preferably would order somewhere some box with the "needed parts" in it and "concentrate on their business".

Likely related: People who "built mostly machines until now" don't really know how to build SW. So even if they realized that they need SW to make their products competitive they don't know how to get there.

The other thing is: Nobody here really tries to compete with the leaders on the world market. There is no motivation to do so. Even the state buys everything from US companies.

There is at the same time almost no support for local SW companies.

The only exception I know of is actually gaming. Germany invests some (imho symbolic amounts of) money in local game developers. But there are no (proper) big state financed projects that try to create something in the business and/or mass market related sectors.

There are some projects but all the money gets wasted on feeding the big industry players like Siemens or Telekom—which won't produce anything in the end, like always here when it comes to this kind of projects.

In my opinion Germany could actually do something about the software industry issue. We were able to build high-end machines (at least in the past). Software is "just" a different kind of machine… But as long it's politically not wanted to compete with the US software industry nothing will happen, imho.

Germany could inhabit a quite interesting niche, if they would take it serous: High-quality, actually secure, and privacy oriented software, in the high-price segment. This is an area currently under explored. Everything else from the competition is optimized to be cheap, just about bearable from the quality standpoint, and of course it's very insecure. We can't compete with that. But we could compete with the others doing the opposite. (Biggest problem would be to create a market with demand, as most buyers currently also only look at the price tag. One would need to change that, with really outstanding quality. We have here still some good foundational research, also when it comes to IT and software. So we could try to tackle this from that angle.)