Market Intelligence for Germany +
Risk Intelligence for its Hinterland*
*Originally “hinterland” meant the backcountry of a port or a river, in other words: the land you trade with.
Places and Explosions
We offer market intelligence for Germany with a geographical focus on Eastern Germany, but our focus is on the risk environment in Germany’s hinterland.
That hinterland is Poland, the Czech Republic, Hungary, Turkey, Greece and Vietnam. We selected these countries because of their strong and often strategic trade relations with Germany as well our “family relations” (the large immigrant populations that bind our countries together).
Following trade and family relations we will also regularly track developments in Italy. Except for the modest Czechs and the far-away Vietnamese, these countries will also make or break the EU as well as decide the potential for war or peace in our part of the world.
Finally, once in a while we will look at the business environment of the cross-border “Euro regions” on our Eastern and Western borders. Some of them are dense trade and production centers for centuries, others to the East are emerging as such as we speak. Certainly all of them are notably ignored by the media and professional analysts alike.
We have no set market and sector focus. We cover the strategic sectors of each country, not a given set of sectors. Some of these like the hazelnut industry in Turkey might be rather small but still strategic (since it corners more than 70% of the world market with a superior product as well bringing in much-needed forex). On top of that, we look for sectors and companies with growth potential and feature portraits of companies to watch.
(for more details see: What we do)
Truth in Numbers
Napoleon studied the corn prices every day, always being afraid of bread riots. Risk intelligence has come a long way since then. Still, risk analysis today is lacking in historical perspective, depth and overall scientific method and rigor. There are a myriad of macroeconomic indicators, indices and benchmarks that dare you to compare countries on almost any variable imaginable, claiming to quantify things to a Mu. They create a fall sense of security and validity of judgement, which can literally wipe out your assets.
Don’t get us wrong, we are Germans, we love sausages, but we want to understand how the sausage gets made. And as you will probably agree, most metrics just don’t “taste” the same when you see how they were cooked up. Inflation or unemployment numbers are more or less doctored in all countries of course (and printed nevertheless). Other metrics are such blunt tools, they miss the truth entirely.
The OECD metrics on SMEs are a case in point: In Turkey and probably most of Southeastern Europe easily two thirds of SMEs are family businesses employing at most one or two people (often only part-time). The OECD measures these with a catch-all category of so-called micro-SMEs (companies with less than 10 employees), which misses the economic reality of the region entirely. This underestimates the precarious nature of these economies as well as the risk environment. Selling two packs of chips a day, while paying a busboy to bring over ten glasses of tea, is hardly a business but rather a form of hidden unemployment.
(for more see: What we do and Research-Focus Turkey and try out our Newsletter)
Trapped in Time
Many advisories promise to predict decades ahead, exploring alternate futures or scenarios. We go further: we go centuries back into the past to see the full century ahead of us. When it comes to institutions change can be glacial. Sociologists or economic historians know this of course, among others things they call it path dependency. It’s the famous QWERTY keyboard layout we are stuck with or the CCP cadre who often bears a striking resemblance to an ancient Mandarin. We therefore look for events unfolding and institutions changing in different time scales, from glacial to the blink of an eye. We reveal these forces or vectors: the path dependencies, continuities, trends and disruptions that move and reverberate across a century. Like tectonic plates they overlap, push or crash into each other, creating fragilities and imbalances that remain hidden if you don’t slow down time.
Trapped by geography and institutions
Countries are not just trapped by geography, they are also trapped by their institutions. By Institutions, we mean their total structures, practices, norms or attitudes, i.e. their marriage norms as well as their scripts, their tax system as well as their contract law. Most Chinese people for example would probably still be illiterate if Mao had not radically simplified the Chinese script, as did Ataturk in Turkey by doing away with Ottoman and the Arabic script with similar success.
Escaping the double trap as well as the chatter
By slowing back time and taking a total view of the environment, we want to look through the uproar and chatter of the news. Most news these days is hardly newsworthy and hardly fact-checked or even worse factual. Of course “non-events” or idle chatter move markets, Kyle Jenner is a billionaire after all. But we are not chasing the sentiment on Twitter or Reddit. Instead, our focus is on where the real and lasting damage is done or break-through opportunities are created.
… You now read both, a promise and an agenda. We start our work with comprehensive coverage of Turkey and will add more countries as we go along, building expertise and capacity on the way.
Research by Newsletter, Note or Report
A bi-weekly Newsletter (Sign up below!), Research Notes, an annual Country Risk Report as well as our Focus Reports on strategic industries like the Turkish construction, defense and tourism industry or industries like the jewelry industry. The latter officially ranks as the fifth largest industry but is hardly more than an expensive way of buying gold for Turks (more about this in an upcoming issue of our Newsletter).
Custom Research
But we also take orders for custom research: We will create qualitative scenarios for you that identify, forecast and assess the risks, threats and vulnerabilities of your financial assets, your companies brand, strategy and operations or transactions from M&A to distribution partnerships or supplier negotiations.
(For more see What we do and Who we help)