Plenty of economists are warning that Europe could soon look like stagnant Japan. In fact, Japan could stand to look a little more European — or, to be more precise, more German.
Why has the "Made in Germany" brand thrived over the last 15 or so years, even as "Made in Japan" grinds toward irrelevance? All the more extraordinary, Germany has flourished in a savagely competitive global environment despite high labor costs, an overvalued euro and any number of regional financial crises. Its secret: adapting and innovating in ways Japan Inc. cannot even seem to contemplate.
"German executives didn't complain about exchange rates — they figured it out and restructured accordingly," says Stephen Jen, managing partner at SLJ Macro Partners in London. "In fact, the chaotic state of the global economy seemed to drive this change. Germany didn't fight it. It went with it."