Still Seeking Coordination? Assessing German Business Interests in Digitalized Manufacturing

Digitalization is fundamentally changing advanced manufacturing as the virtual and physical worlds of production increasingly merge, creating an environment in which intelligent objects communicate and interact with each other. Also Germany, the archetypical coordinated market economy (CME) is forced to adapt, if not reinvent, its production regime to sustain its position as a global leader in diversified quality production. Inspired by the still prominent Varieties-of-Capitalism (VoC) approach, scholars often assume that employers collectively seek to preserve existing and complementary sets of institutional features that support their product specializations and sustain their global competitiveness. This should also and especially be the case for digitalized manufacturing sectors at the core of the German economy, such as mechanical engineering or automobiles. This premise has become, however, quite contentious as many scholars argue that German employers increasingly opt for “neoliberal” solutions, “whacking away” historically grown compromises, whenever they have the opportunity to do so (e.g. Kinderman, Korpi, Streeck). In this paper, we thus seek to test the validity of one of VoC’s most crucial analytic claims by revealing employers’ institutional preferences empirically. Put differently, we offer insights to the question if employers genuinely want to and are capable of supporting coordinated solutions in digitalized manufacturing as assumed in the VoC literature. For this research, we rely on both a systematic review of a variety of key documents released by employer and business associations, as well as a series of expert interviews with employers, trade union representatives, and civil servants from relevant ministries.