Germany needs a new growth path.

Despite its recent successes, a broad evaluation of Germany in terms of welfare reveals a number of shortcomings, especially with regard to social indicators. These shortcomings include rising inequality, a sharp dualisation in the labour market, in both the private and the public sector, and a distinct lack of equal opportunities, which is already discernible in the education system and leads to low upward social mobility. Furthermore, an examination of environmental indicators shows clearly that Germany is not managing to increase energy efficiency to the degree required by the necessary turnaround in climate and energy policy. A sector analysis also suggests that innovation in industry and general progress in services are needed in order to ensure continuing productivity growth
in the future.