The productivity conundrum among German companies

There has been a significant corporate modernisation effort in Germany. T he country also has a highly skilled labour force. And y et productivity gains in Germany are very low (even negative in the recent period) and the level of labour productivity is lower than in France, despite the latter’s lagging corporate modernisation and low labour force skills. What accounts for this low - productivity conundrum among German companies? The ageing of the labour force? A determination not to reduce employment? A lack of attention given to productivity when corporate profitability is high? All three explanations seem relevant. Germany’s lack of productivity gains is heavily eroding the competitiveness of its companies at a time of rapid wage growth .