Newsletter March 2022

The world is in a crisis continuum and Germany is watching. This is the impression Moritz Schularick, professor of economics at the University of Bonn, gets when he looks at the state’s actions in recent years. He has written down his observations. In his latest book, “Der entzauberte Staat – Was Deutschland aus der Pandemie lernen muss” (“The Disenchanted State – What Germany Must Learn from the Pandemic”), he argues that Germany should move away from the typical ‘can’t-do’ mentality and adopt a stronger ‘can-do’ attitude. This can also be applied to Germany’s current action in the Ukraine war.

At the #ZEWBookTalk on 22 March 2022, ZEW President Professor Achim Wambach and Professor Moritz Schularick discussed not only the achievements and failures of the state in crisis mode. They also revisited their debate on the pros and cons of an energy embargo against Russia, published the same day in the German business newspaper ‘Handelsblatt’.

Whether you are interested in doing an internship, work as a student assistant or getting started in science: ZEW Mannheim – as one of the leading economic research institutions in Europe – is the ideal place to kick-start your career. This year, the ZEW human resources department will once again attend the University of Mannheim’s CareerFair to provide information on career options at ZEW. Students will have the opportunity to ask members of the HR team career-related questions on 5 April 2022 between 11 a.m. and 2 p.m. via the digital platform “talentspace”.

In Germany, 7 March 2022 symbolically marks the wage gap between women and men. With a wage gap of 18 per cent, women statistically work 66 days “for free”. In the 18th episode of the #ZEWPodcast, ZEW economist Professor Melanie Arntz shed light on various factors that cause the gender pay gap. She also talks about the EU Action Plan for Gender Equality, parental leave allowance and the challenges of digitalisation.

ZEW Mannheim is pleased to announce the international conference on the German labor market in a globalized world on 24 and 25 June 2022. The conference focuses on technology, trade, and demographic changes and the ways they interact with employment, wages, and participation in the labour market, with a particular emphasis on the role of institutions and on labour markets during the COVID-19 crisis.
 
Researchers are invited to submit empirical and theoretical contributions on this topic from all areas of economics and sociology with a focus on labour, education, health, or human resource management. Please submit a full paper, or a preliminary version, in PDF format, including up to four JEL codes to Martin Lange via dfg1764@zew.de no later than 28 April 2022.

Late on Thursday evening, the relevant European institutions agreed on new rules for the digital world. The Digital Markets Act (DMA) bans harmful business practices of large digital players that act as ‘gatekeepers’ and imposes others on them. For example, user data from different services may no longer be combined for advertising purposes without explicit consent, and messenger services on these large platforms must be compatible with other messenger services. Professor Achim Wambach, president of ZEW Mannheim, explains.

The German government has agreed that the German Armed Forces must be modernised quickly to fulfil both its NATO and legal obligations. Accordingly, the German Bundestag provided additional funds worth 100 billion euros solely to be spent on military equipment and assets. Minister of Defence Christine Lambrecht has made out two bottlenecks in that regard: mandatory EU-wide tenders are time-consuming and internal procurement processes are too bureaucratic. ZEW procurement specialist Leonardo Maria Giuffrida, head of the ZEW Junior Research Group “Public Procurement" explains how German Armed Forces procurement can be organised more efficiently.

Start-up activity in the field of artificial intelligence in Germany has been very dynamic over the past decade. The years 2014 to 2018 saw a veritable start-up boom with annual figures rising from 250 newly founded companies to over 450. AI start-ups have a high probability of survival in the market and are characterised by strong growth in employee numbers, as a comprehensive stocktaking of the AI landscape by ZEW Mannheim shows. “The high dynamics and the good performance of AI start-ups illustrate that artificial intelligence is an important growth field with a lot of room for development for newly founded companies,” says ZEW economist Dr. Christian Rammer from ZEW’s Research Department “Economics of Innovation and Industrial Dynamics”.

In response to Russia’s invasion of Ukraine – which is a violation of international law – the EU and Germany have imposed comprehensive sanction measures. The sanctions are designed to put pressure on the Russian economy and thus dissuade Putin from continuing the war. According to a survey of financial market experts conducted by ZEW in March 2022, amongst the enacted measures, the sanctions imposed on the Russian central bank and the exclusion of Russian banks from the SWIFT payment system are likely to have the most severe impacts on the Russian economy.

However, these measures are also expected to have limited negative repercussions for the economy of the eurozone. The main impacts to the eurozone will be higher inflation and – to a lesser extent – lower GDP growth. Nevertheless, the sanctions are unlikely to motivate a change in the interest rate policy of the European Central Bank (ECB).

The ZEW Indicator of Economic Sentiment for Germany fell more sharply than ever before in the March 2022 survey. The indicator plummeted 93.6 points to a current value of minus 39.3 points. This is the biggest drop in expectations since the survey began in December 1991. By comparison, the indicator experienced a decline of 58.2 points at the beginning of the COVID-19 pandemic in March 2020. Expectations are now similarly low as in summer 2019.

More than two million people have fled from war and violence in Ukraine, especially women and children. They have experienced terrible things in the war and while fleeing, which is why they need not only medical but also psychological help after their arrival in Germany. ZEW researchers have provided an overview based on Google Maps to enable the best possible access to psychological care.

Europe is showing unity and solidarity with the refugees of the Ukraine war. In Germany, they are being received quickly and unbureaucratically. However, there are still many unresolved issues. For example, it is not clear how long they will need protection. In the event that they cannot return to their destroyed homeland in the foreseeable future, strategies for successful integration are necessary. Studies by ZEW Mannheim show that the integration of young children can be particularly helpful for the successful integration of the entire family. Guido Neidhöfer, a researcher in ZEW’s “Labour Markets and Human Resources” Department, explains: “It is now important to provide education and care services for refugee children as quickly as possible."

Today, the Commission of Experts for Research and Innovation (EFI) presented its annual report to Federal Minister of Education and Research, Bettina Stark-Watzinger. The presentation had been postponed due to the current political situation. Professor Irene Bertschek, head of the ZEW Research Department “Digital Economy”, is a member of EFI. One of the core topics addressed in this year’s report is digitalisation in the health care sector. The expert commission points out shortcomings and calls for immediate action.

More than one million people from Ukraine are currently fleeing towards the west. Countless volunteers in Eastern Europe and Germany are organising emergency shelters and relief supplies to provide them with essential goods. Paul Berbée, a researcher of the Junior Research Group “Integration of Migrants and Attitudes Towards the Welfare State (IMES)” at ZEW Mannheim, explains the role of volunteers in supporting refugees.

The COVID-19 pandemic is a veritable stress test for German fiscal policy. In the midst of the crisis, the debt brake has increasingly lost public support. Voter support for the debt brake was initially strong, but began to wane as it neared entry into force. In 2021, only 59 per cent of Germans still supported the debt ceiling, while 20 per cent said they had doubts about it. More than 60 per cent were in favour of returning to a balanced budget at a later date. These are the results of a representative survey co-authored by ZEW Mannheim.

Our publications are available to download in PDF format. PDF files can be viewed using, among others, Acrobat Reader, which you can download for free at https://acrobat. adobe. com/us/en/acrobat/pdf-reader. html

Christian Rammer and Nordine Es-Sadki
Using Big Data for Generating Firm-Level Innovation Indicators – A Literature Review

This issue contains a Focus on Innovation with the following articles:
 

Sebastian Blesse and Justus Nover
Morgen, morgen, nur nicht heute! Wie die Deutschen ihren Blick auf öffentliche Haushaltsdisziplin ändern (Tomorrow, Tomorrow, Just Not Today! How Germans Are Changing Their View on Public Budget Discipline)

Irene Bertschek, Holger Bonin, Uwe Cantner, Carolin Häussler, Katharina Hölzle, and Till Requate
Gutachten zu Forschung, Innovation und technologischer Leistungsfähigkeit Deutschlands 2022 (Report on Germany’s Research, Innovation and Technological Performance 2022)

Christian Rammer, Marius Berger, Patrick Breithaupt, Sandra Gottschalk and Jan Kinne
KI-Startups in Deutschland (AI-Start-ups in Germany)

Irene Bertschek, Holger Bonin, Uwe Cantner, Carolin Häussler, Katharina Hölzle, and Till Requate
Sprit-Subventionen? Abmilderung sozialer Härten und nachhaltige Innovation nicht gegeneinander ausspielen (Fuel Subsidies? Trade-Offs Between Mitigating Social Hardship vs. Sustainable Innovation Should Be Avoided)

2022 Data-Report on Innovation Behaviour of Saxony’s Economy

Focus Study “Markets for Technology”

Innovation Indicators for Chemicals and Pharmaceuticals 2022

Innovation Survey 2022 for Berlin

Innovation Survey 2022 for Brandenburg

Due to the ongoing COVID-19 pandemic, the following event details may be subject to change. The current status of the events can be found in the ZEW Events Calendar. If you have any questions, please don’t hesitate to contact our event team at event@zew.de.

Speaker: Michael K. Price (The University of Alabama, Tuscaloosa, USA)
Location of the event: Online

Speaker: Kyle Myers (Harvard Business School, Boston, USA)
Location of the event: Online

Speaker: Sebastian Schwenen (Technical University of Munich)
Location of the event: Online

Speakers: Koen Schoors (Ghent University, Belgium) and Paul Smeets (Maastricht University, Netherlands)
Location of the event: Online

Speaker: Martha Bailey (University of California (UCLA), Los Angeles, USA)
Location of the event: Online

Speaker: Emilia Del Bono (University of Essex, Colchester, United Kingdom)
Location of the event: Online

Speaker: Minchul Yum (University of Mannheim)
Location of the event: ZEW, Mannheim

Speaker: Jan Krämer (University of Passau)
Location of the event: Online

Speaker: Cara Schwarz-Schilling (Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste (WIK))
Location of the event: Online

Speaker: Anthony Strittmatter (Institut Polytechnique de Paris, France)
Location of the event: ZEW Mannheim and online

Speaker: Lara Bartels (ZEW)
Location of the event: Online

Speaker: Susanne Ding (German Federal Ministry for Digital and Transport)
Location of the event: ZEW, Mannheim

Speaker: Carolyn Deller (The University of Pennsylvania, Philadelphia, USA)
Location of the event: Online

Speakers: John Van Reenen (Massachusetts Institute of Technology (MIT), Cambridge, USA) and Danielle Li (Massachusetts Institute of Technology (MIT), Cambridge, USA)
Location of the event: ZEW, Mannheim

Speakers: Lucas Bretschger (ETH Zurich, Switzerland), Arthur van Benthem (The Wharton School, The University of Pennsylvania, Philadelphia, USA), Paul Ferraro (John Hopkins University, Baltimore, USA), and Erica Myers (University of Calgary, Canada)
Location of the event: ZEW, Mannheim

Tenure-Track Postdoctoral Researcher (100 %, f/m/d) in the Research Department “Environmental and Resource Economics, Environmental Management”

Picture Credits: press release of 25.03.2022: Anna Logue Fotografie, news article of 23.03.2022: iStock.com/PeopleImages, press release of 11.03.2022: Kartendaten 2022 GeoBasis-DE/BKG (2009), Google, Inst. Geogr. Nacional, press release of 09.03.2022: BMBF/Hans-Joachim Rickel
All further pictures: ©ZEW