Amid political chaos, smart executives keep their eyes on real growth—green tech, innovation, and long-term resilience.
These are disorientating times for business leaders, especially for those headquartered in Europe. Blame our international time zones. It works like this: the President of the United States decides he needs to let off steam about an issue, maybe around 9pm on the East Coast. He announces something controversial or inflammatory on Twitter (now known as X). This means that bosses will wake up in Europe to the news that tariffs are going to be imposed on major trading partners, or that climate change is a myth, or that NATO members should increase defence spending to 5 percent of GDP.
In circumstances such as these it could be hard to hold your nerve or remain focused on your true commercial priorities. This does not feel like “business as usual”.
All of us – business leaders, observers, citizens – should try not to be too distracted or confused. President Trump’s preferred way of operating is to make repeated announcements of things he may or may not really want or expect to happen. He likes being the main story and keeping those around him off balance. He has survived for decades in business this way, without ever being consistently successful in normal terms. In Europe, we may sometimes envy the US’s more flexible approach to bankruptcy and recovery from financial setbacks. But no European figure would remain credible after the number of commercial bankruptcies that Trump’s casinos and hotels have suffered.
At the World Economic Forum in Davos this year, there was excitement and much hype about the possibilities of Artificial Intelligence (AI). As Gillian Tett noted in the Financial Times, in the ski resort’s central promenade containing the prime advertising locations, “AI slogans were plastered in places that used to carry ESG signs.”
But smart business leaders are not abandoning environmental, social and governance concerns. They are merely considering how to talk about these issues in a more widely understandable way. As Tett explained: “That means focusing more on growth, less on phrases such as ‘net zero’ or ‘green transition’… and embracing buzzwords such as ‘infrastructure investment’ and ‘energy efficiency’.
This is clearly no time to abandon the green agenda. As Will Hutton reported in The Observer newspaper, China is pressing on with bold and radical investment. The government there “defines the drivers of its economic growth as the ‘new three’ – solar cells, lithium-ion batteries and electric vehicles (the old three were household appliances, furniture, and clothing), in all of which it is the dominant producer.”
And while critics like to sneer about Europe’s current problems, their analysis is often wrong. “It is not regulation, high taxes and eco-fanaticism that has laid the European car industry so low, as Trump and co like to argue,” Hutton wrote. “It is that Europeans did not grasp the growth possibilities of beating the climate crisis fast and aggressively enough. Heading off civilisational disaster and promoting growth are not at odds; they are two sides of the same coin… The American and British right are plain wrong. Growth, cheap energy and averting the civilisational threat of the climate crisis are all possible.”
A crucial general election in Germany sits at the centre of this tension, between those who want to maintain a more progressive and sustainable approach to business and those who would like to burn everything down in homage to Donald Trump. And even while the famous motor of the European economy wrestles with some serious and deep-seated problems, the gloom over Germany and German business is overdone. Another Financial Times correspondent, Tej Parikh, argues powerfully that reports of Germany’s industrial decline are exaggerated. “German manufacturing is, in fact, surprisingly resilient and agile,” he writes.
“Germany’s long-standing expertise in engineering can be repurposed towards new growth sectors (at home and abroad). And though exports to the US and China may be affected by rising trade tensions, the nation remains the dominant industrial force in Europe,” Parikh says. “Demand for defence equipment and green technologies is rising across the continent. Germany has a specialism in both, leading Europe for patents in green tech (and overall).”
While we hear endless chat about the US’s so-called “magnificent seven” of tech-based companies – Nvidia, Microsoft, Apple, Meta (Facebook), Amazon, Tesla and Alphabet (Google) – Germany can also boast of an equally impressive cohort – SAP, Siemens, Siemens Energy, Allianz, Deutsche Telekom, Rheinmetall and Munich Re. Internationally focused, these industrial giants have been to some extent protected from domestic economic weakness.
And then there is the still powerful Mittelstand, often underappreciated or misunderstood outside Germany. Parikh cites as examples ZARM Technik (which makes devices that rotate satellites in space); Sick (a sensor manufacturer); KAEFER Isoliertechnik (which makes insulation technology); and König & Meyer (a musical stands maker).
Freed from the short-term constraints of public capital markets, the “hidden champions” of German business continue to innovate and compete in a way that President Trump would struggle to understand. And Germany is better set for the future than some recognise, Parikh concludes. It is a leader at integrating robots in industry and is well positioned in several growth markets – medical technology, wastewater treatment, electric cars and heat pumps, for example.
Don’t panic. Civilized human values are timeless, unlike Trump, who is time- and term-limited. Yes, the next few years will be noisy and distracting. And yes, some things will have to change. But it will also be possible – indeed, necessary – to run and lead businesses in a responsible way, to employ people on good terms and conditions, to make money and solve customers’ problems profitably. That was always the best way to run a business, and it still is.
Stefan Stern is an accomplished writer who has contributed to the BBC, Management Today magazine, and the Financial Times, where he served as the management columnist from 2006 to 2010. He is currently a Visiting Professor in Management Practice at Bayes Business School, City, University of London. Previously, Stern held the positions of Director at the High Pay Centre and Director of Strategy at Edelman.