Outside of the Handelsblatt community, you quickly get a blank look when you start the small talk at the cocktail party with the nonchalant question: “Don’t you agree that the recent decline in investment in equipment is really worrying?”
But here we are among ourselves and can agree: Germany has a massive investment problem. For 2022, the Association of German Chambers of Industry and Commerce (DIHK) expects investment in equipment to grow by 3.5 percent.
The number, which is based on a survey of 28,000 companies, means that the Corona slump will not be made up for in the current year either. The decline in investments in 2020 was more than eleven percent. In the following year, the German economy was only able to catch up by just over three percent.
Gabriel Felbermayr, President of the Wifo Institute, says: “Germany is facing serious difficulties in terms of investment activity.”
The federal government has recognized the problem. “If we want to go in the direction of renewable energies, if we want to digitize our economy, then we need a huge amount of investment,” said Chancellor Olaf Scholz’s chief economic adviser, Jörg Kukies.
The federal government wants to start extensive programs for this – on the one hand by reducing bureaucracy, on the other hand by state investments.
As a taxpayer, you can also perceive the second part of the statement as a threat. Investments are the decisive factor for the long-term growth of an economy – but only if they actually increase the growth potential. There are considerable doubts about additional government spending, because it often goes into investment projects that are politically opportune but not necessarily productive. In recent years, the authorities have not even managed to spend all the money that the state earmarked for additional investments.
Real investments that increase growth and prosperity in the long term can only come from companies on a relevant scale. But it seems as if they have lost all interest. My colleague Julian Olk didn’t have to ask around for long to find out from companies and experts why they were reluctant to invest. Particularly frequently mentioned: delivery bottlenecks, concerns about rising energy prices, high taxes.
Across the Atlantic, an entrepreneur isn’t afraid of big investments: Last week, Meta boss Mark Zuckerberg disclosed for the first time figures for the investments of his company formerly known as Facebook in the construction of virtual realities. The “Reality Labs” segment generated a loss of around ten billion dollars in 2021. Last year it was $6.6 billion. Zuckerberg is banking on the metaverse actually being “the next big thing,” as Silicon Valley calls the really important technology trends.
Today we dedicate our cover story to the dream of the Metaverse. That bundle of technologies and business ideas that are intended to transform the Internet from a two-dimensional screen window into a three-dimensional experience. To a deceptively real-looking world in which you can lose yourself like in a real jungle, a nightclub or a love adventure. The instruments for this: data glasses, mega-fast computers, AI software – and ultrasonic waves, which are supposed to give the hand the feeling of feeling something where in fact there is nothing.
(Illustration: Mario Wagner)
But the truth also includes: A lot is still jerky, the virtual conference room from Facebook has the graphic quality of a cartoon. And some of the business models in the Metaverse seem as if the craziest excesses of real capitalism have been transplanted into the virtual world, where they don’t seem any more reasonable.
Or what else to call it, in December a buyer paid $450,000 to own a parcel next to rapper Snoop Dogg’s property in the Metaverse’s virtual community, The Sandbox. Mind you: It’s about a few lines of software.
Conclusion: As with the conventional web and later with the mobile Internet, there will be many exaggerations and disappointments before the Metaverse technology becomes part of our everyday life. The metaverse is not a product but a process. And like all great innovations, it is hype and promise at the same time.
Little hype and even less promise are left from the Dax group Delivery Hero after today. The price of the food delivery service closed with a record-breaking daily loss of more than 30 percent in the red, while the Dax closed slightly higher overall. Apparently, the group’s somewhat subdued quarterly outlook unsettled investors. Delivery Hero is the only Dax group that has never made a profit.
Wealth manager Markus Schön describes the descent in one sentence: “When interest rates rise, the insubstantial values go under.”
In his opinion, Delivery Hero is an “air number” that buys low-margin sales with loans in order to eventually have a dominant position in the market. The latter is an illusion.
Crisis diplomacy in Ukraine continued today with a meeting in Berlin between Chancellor Olaf Scholz and the tips of the three Baltic states of Estonia, Latvia and Lithuania – all three states are NATO members, former Soviet republics and border directly on Russia. The common message: Russia should not underestimate the unity and determination of NATO allies. Scholz said: “We stand by your side. That is very important to me.”
Conclusion: The meeting was symbolic politics, but it also has an important function in such a crisis.
British Prime Minister Tony Blair, US President Bill Clinton, French President Jacques Chirac and Russian President Boris Yeltsin sign an agreement.
An important symbol for Russia is the allegedly first given and then broken NATO commitment not to expand eastwards after the end of the Warsaw Pact. A carefully constructed myth, as the longtime Paris correspondent of the Handelsblatt wrote, Thomas Hanke explains in a historical essay. In fact, Russia only began to protest against NATO’s eastward expansion after the event, when the systemic conflict between the eastern European democracies and the increasingly autocratic Russia became ever clearer.
And then there was the meeting between British Foreign Secretary Liz Truss and her Russian counterpart Sergey Lavrov, which apparently went much less harmoniously than the Scholz talks in Berlin. No wonder – the British government is taking a particularly hard line towards Russia in the Ukraine crisis, also to distract from the domestic political problems surrounding Prime Minister Boris Johnson. The “Financial Times” quotes from those close to Truss: The talks in Moscow were “robust, but with a high degree of mutual respect”.
Anyone who thinks this is a friendly way of describing the fact that they didn’t feed each other from mother-of-pearl caviar spoons is obviously correct: Lavrov described the meeting as a “dialogue between a deaf and a dumb person” – who played which role, left it to his own Directness known minister openly.
I wish you a robust day with a high level of mutual respect.
Best regards,
Her
Christian Rickens