You're meeting with the chancellor a little bit later at the behest of — well, really you guys having founded this initiative of Made in Germany. We now have pledges of upwards of 600 billion euros worth of investment. What do you hope that Made in Germany can deliver?
Well, thanks, first of all, thank you for the invitation. Look, I think we all strive for the same goal, which is to finally have growth and competitiveness back in Germany and in Europe. And I do believe, and we do believe, if growth is coming back to Germany, it's also good for Europe. In this regard, growth cannot only be debt financed by the government, cannot only be stimulated by the government. Actually, we need the economy. Therefore, a small group around Roland and myself and others, within a couple of months after the solid start of the government, actually said we also want to step up, we want to show what potential Germany has, and therefore we founded this initiative. I think it's quite impressive what we have collected after a couple of months with over 600 billion of investments, 61 companies, and to be honest, I think more to come over the next months. But it shows what the sentiment is and that we have a chance.
And so I'd like to get an idea sort of more concretely, because we're sort of in the age of large pledges to government and spending and local economies. So I'd like to get an idea from Siemens, for example, how much of that money is coming from Siemens and specifically what are you targeting those investments into?
Well, so I mean, this goes much beyond Siemens. These are more than 600 — 631 billion euros which we're talking about. And it's a combination of, as you said, 61 companies — it's corporations, it's financial institutions, but it's also small and medium-sized enterprises and startups. So it's a combination. They're all geared for deploying capital into a country where we believe in its innovation strength. We have small and medium-sized companies, hidden champions. They are unique in their technology, and we believe that with the people which we have, we can drive this to the next level. Yet you need a little bit of structural changes in order to really attract the capital, that we all know. So they've identified nine action fields, and they are almost completely in sync with what's written in the coalition contract.
And then coming to Siemens: I mean, we're investing in manufacturing innovation in Erlangen, for example. We want to invest in what we call the industrial metaverse — manufacturing, driving digitalization to the next level. We're about to deploy that capital as we speak, the same as what happens here in Berlin. It's a completely new precinct in Berlin where we're investing, leveraging also other financial investors' capital. It's a fully digitalized city — living, working, and manufacturing at the same time. Capital will be deployed as we speak, and so on. But we have more than that. We have more than 50 lighthouse projects from all the companies where they say: these are my ideas, this is what I use the capital for.
And so let's sort of zoom out and see, looking into the future 5, 10 years from now, Christian. When we're trying to imagine if this initiative is successful and the initiative of the government, what the German economy looks like — how different it might be from these sort of traditional ideas that we have about the German economy, which is a lot of smoke stacks, a lot of heavy industry, very energy dependent. What do we look like? What does the economy look like in 5 to 10 years?
Always hard to exactly zoom out and say what it looks like in 5 to 10 years, but you know, sometimes history tells you what is possible. If you think about how the German economy actually changed over the last 30 or 40 years — when I started in banking, in the location where I started, this was an area which was dominated by textile and the printing industry. Completely changed. And if I think about family-owned companies, if I think about Siemens, if I think about others, how they now actually apply artificial intelligence for industrial processes, I think Germany can be and must be a technology-led country. If I think about sustainability, technology with regard to sustainability — we haven't talked about sustainability so much over the last 12 months. Well, this is a key topic. Germany has the leading technology to actually master that challenge, to export that. I do believe by the way that Germany will always be an export country.
And then with leading technologies, we can master that. For that you need investments. For that you need to be up to date, and therefore it is so important that we actually invest into our capabilities. Third point could be defense. I'm actually glad that we are upscaling our defense, not only in order to defend our own continent, but moreover that most of the defense investments will actually do very well for future technologies. So you can actually initiate a new industry with defense investments. So I think we will see a further development of the German industry. But I do believe that technology, artificial intelligence, but also sustainability will be something where German industries will be leading in 5 to 10 years.
And Roland, you are sort of coming from this company that has this heavy industry heritage and has now transitioned to do exactly sort of what you're describing there. To what — so how do you appraise Germany's structural advantages in order to take advantage of what we're talking about here?
So let's take the AI technology as one of those fundamental technologies which are fundamentally changing everything. We talk about industrial AI. So what you do need is data. I mean, better data beats better algorithms. So we are sitting on a massive amount of data. This is one of the most industrialized economies in the world, and again small and medium-sized enterprises, large ones. They're creating data from their buildings, their manufacturing sites, their engineering. So this is number one. We can leverage that data and bring it into what we call industrial foundation models which are not hallucinating. They are really working on the shop floor. Agents which act on your behalf, doing things on a shop floor, managing lines or even whole plants together with people trained on AI technology. This does not go without people. We need people who use these technologies, and the combination of this innovation strength, domain know-how, but also the data available, that can help us a bit.
The only point here is we need less regulation to release the power and the speed with which this technology can really hit the market. So there are a couple of things which we have to change. I'm constantly saying that, but the potential is there.
Well, while we're on the subject, I'll stay with you, because this is my next question. The road map to getting there, right? We've laid out the ambition, now the road map to getting there. Specifically, what have you been encouraged by what you've heard from this government, and what reforms concretely would you like to see in the next 6 months?
So we have nine action fields, and again they are in sync with what the government is planning to do anyhow. And just to spell out some: number one is coming back to innovation — the way how we are supporting innovation, universities, schools, education system. The other one is the labor market. We need the best talents in the market. We need to deploy the working forces which we have. We have to bring people who are coming to us into work. Another one is the investment climate, that you have incentives for investing and deploying money. And we see some first actions already taken by the government. We talk about less regulations, faster decision processes. It doesn't help if it takes 5 years to get an approval for a plant when you want to deploy capital in the next three years. And the other one is digitization. You have to digitize the companies but also government processes, because you can be much faster and much more productive in doing so. So just to line out some of those areas — it's not that we know what to do. It's about doing.
But Christian, we've heard about cutting red tape in Germany for how many decades now, right? This is something that we keep hearing about from the government. What do you think, again, concretely, what would you like to see from this government? You speak to basically every business within Germany. What are the three things that you could really concretely put into place in the next six months which would encourage these companies and give them the confidence to invest?
Well, the three main complaints of the people, in particular of family-owned companies but also larger companies, clearly regulation and bureaucracy and their speed. And this is an issue where it's not only Germany; we also have to have a far bigger influence on what is happening in Europe. Therefore I also think more leadership, a stronger government in Germany will also help to do structural changes in Europe which we need. Number two, energy prices. It's still an issue now. I think the government is going in the right direction, but this is something we clearly need to have in mind. Number three is the labor market and flexibility around the labor market. This is kind of the feedback we get from our clients. Now I think there is a force one. As I said, the government had a good start. We need to focus on our pension plans, because I do believe it's not only important that we have a secured system for our people for retirement, people also in 10, 15 years time. I think it's actually the key to success for investments. If we have a capital-based pension plan, that also means that more investments will go into our economy. It's nothing else than the real start of a domestic capital market. That's what we need. If we can focus on that, I think even more foreign investments will flow into Germany.
