Whether it refers to microscopes or cars, the phrase “German engineering” is synonymous with quality.Ten percent of all Nobel prizes ever awarded have gone to German scientists.Albert Einstein famously won the prize in 1921 for the law of the photoelectric effect, in which light was first described as a particle. In 2005, the last time the prize was awarded for contributions made in optics, it went to German scientist Theodor Hänsch and two Americans.However, the global economic down-turn has taken its toll on German optics. According to the central bank of Germany, or Bundesbank, and the Federal Statistical Office, seasonally adjusted volume of total foreign and domestic orders received by German electrical and optical equipment manufacturers decreased to 2006 levels by the end of the fourth quarter of 2008. Because of declines in manufacturing and exports, the fourth quarter of 2008 was marked by a substantial economic downturn for the entire German economy. The Bundesbank predicts that the German economy will recover in 2010.The optics and electronics market in Germany has skyrocketed over the years in terms of volume sales, but it began a plunge in the fourth quarter of 2008. Sources say that photonics manufacturers lost even more sales in the first quarter of 2009. Courtesy of Deutsche Bundesbank.“In most cases, the photonics industry is a component supplier for other industries and, for that reason, dependent,” said Birgit Ladwig, manager of photonics and precision technology at Spectaris, a German trade organization that provides services such as compiling market data, helping with regulatory affairs and lobbying at a countrywide level. In the first quarter of 2009, the economic conditions in the German photonics industry declined sharply, but Ladwig expects the industry to begin its recovery in the second term of 2009.German Chancellor Angela Merkel faces a tough re-election battle because of the ailing German economy. (From Wikipedia).What makes this situation even more volatile is that this is an election year for Germany. The country’s most powerful leader, Chancellor Angela Merkel, faces a re-election battle versus Foreign Minister Frank-Walter Steinmeier. Both lawmakers are members of the same Social Democratic Party of Germany. Although polls suggest that Merkel and her rival are equally well-regarded, the situation could change if the economy continues to deteriorate. Playing politicsAt the G-20 economic summit, Germany and France adopted hard-line stances on various issues, including financial regulation, tax havens and banking security. Although Merkel has acknowledged that the recession is the worst since World War II, she made a public statement after attending Hannover Messe, a large engineering trade show, that the economy probably will swing upward again by mid-2009. “I think the conditions will not change before end of 2009, due to elections and restructuring the financial market,” said Berndt Zingrebe, CEO of Sill Optics GmbH and a member of the EuroPhotonics editorial advisory board.Solar panels are a €4.9 billion industry in Germany. Courtesy of BP Solar.There is a sunny side to the economic situation. German solar technology has become a €4.9 billion industry, according to the Federal Ministry of Economics and Technology. German solar companies are not only looking for funding from their own country but also are looking to take advantage of the “stimulus bill” – the $787 billion American Recovery and Reinvestment Act signed by President Barack Obama. The bill provides tax credits or grants worth 30 percent of the cost of renewable energy projects starting this year.Ladwig said, “Because of the scarcity of raw materials, the trend [is toward] renewable energies.” Zingrebe cited several other factors contributing to this trend, including the price of energy, environmental awareness and the high level of technology in Germany. Europe has its own stimulus package worth €400 billion, to which Germany has committed €80 billion. “Many EU public projects [have] limited efficiency from the point of German industry in many cases,” said Bernhard Klimt, director of marketing and sales at Lumera Laser GmbH. Spectaris is involved in an EU-supported project called “Production for Micro – Empowering Europe for the μ-century.” The objective of this undertaking is to improve the competitiveness of the European optics industry and its subcontractors in relation to their Asian competitors through improving the entire process for manufacturing optical components in Germany. In the past, Chinese companies sold simple components at low prices, Ladwig said, but because manufacturing in China has improved over time, China now competes with Germany in the medium- and high-end markets.“The US is the most important single-country market for German companies,” Ladwig said. The Berlin Wall fell in 1989, and Germany has made a lot of progress since then but is still experiencing growing pains. Germany was importing laser technology as late as the 1980s.Research and laborOn the research front, the Federal Ministry of Education and Research by 2009 had dedicated approximately €15 billion to its “high-tech strategy.” Its stated goal has been to make research funding 3 percent of the country’s gross domestic product by 2010. It plans to make the 21st century the “century of the photon,” in part by growing jobs in the optical technologies sector by 40 percent. “The high-tech strategy … is optimizing links between science and industry … [and] shortening time to market,” Federal Minister Annette Schavan has said.OptecNet Deutschland is an organization similar to Spectaris. Whereas Spectaris operates at the countrywide level, OptecNet functions at the regional level. The two organizations often work together. For example, they jointly run the German pavilion at Photonics West, an important event for both groups. Laser Munich is another important show for both organizations, and Spectaris plans to organize a panel to address the battered semiconductor market at that show. For German companies large and small there is great demand for optical scientists and engineers.Everyone interviewed for this story said that demand is high for optical scientists and engineers in Germany. “Larger companies [are] requesting skilled labor, but smaller companies like Sill Optics have provided better education and training in order to have more skilled workers,” Zingrebe said. Spectaris is campaigning to recruit skilled workers by emphasizing the industry’s positive outlook and superior working conditions. To get young people interested in optics, the Federal Ministry of Education and Research sponsors a traveling educational show called FaszinationLicht. Despite the shortage of skilled labor, higher education in optics is strong in Germany, with 900 classes by 400 teachers offered annually countrywide. Hot sectors in Germany include biophotonics, high-performance diode lasers, femtosecond laser technologies, organic solar cells, and LEDs and organic LEDs.