The German economy would be better off, and overall more competitive, if its participants collaborated on the development of open-source software they need to operate their business. They could free themselves from (some) of the dependencies (vendor lock-in) on the Silicon Valley while reducing overall costs, setting standards, etc.
(This is a position paper I submitted, hence the writing style.)
Such collaboration is typically industry-specific: Open-source software for the public sector, for the energy sector, for logistics, etc.
The results of such collaboration are necessarily competitively not-differentiating: None of the participating companies can win in the market over any of its collaborating competitors, because they all have the same rights to use the software. Anything competitively differentiating has to be built resp. provided outside / on top of / to the side of the open-source software.
Plain open source projects are not enough to make this work. The tool of choice are open source consortia a.k.a. open source foundations. Such a consortium can set up a level playing field that participants feel safe to join and invest in rather than stay away from. Existing examples of open source consortia are the openKONSEQUENZ consortium of energy network operators and the Open Logistics Foundation of logistics companies.
The scientific literature is thin on this topic. The notable exception is the work of my (close to finishing) Ph.D. student Elcin Yenisen. You can find our work on this here.
While open source knows no boundaries, and even American or Chinese competitors can use the open-source software, I expect subtle country-level benefits to accrue to the dominant country of an open source consortium and its participating companies (cluster theory). A predominantly German consortium will bring benefits to Germany by strengthening local network ties, by creating a more mobile and skilled labor force and corresponding knowledge sharing, and by enhancing overall competitiveness, to name a few.
Several obstacles stand in the way of making this happen. Such consortia are foremost industry-specific and driven by industry needs; open source is a tool, and important, but not the primary driver: Therefore it needs one or more parties from the specific industry to drive such an initiative. Then, such people are typically skilled in their industry, but not necessarily in IT let alone open source consortia. Hence, there needs to be outreach, explanation, examples. Finally, some industries are more at loggerheads with each other than others. The leaders of the involved parties need to develop the skills to soberly access their competitive situation and how, perhaps, much of their closed IT is no competitive differentiation at all and that they would be better off building a common base with country-local partners, and become stronger individually and as a whole towards the rest of the world.
Germany actually has a good base, and a significant opportunity. Existing research institutes often have a focus. The openKONSEQUENZ consortium has close ties with OFFIS, which is strong in energy informatics. The Open Logistics Foundation was created out of Fraunhofer IML. In general, the German Fraunhofer institutes tend to focus on one industry or segment, and each could be a great starting point for an open source consortium for the primary industry or domain they cater to.
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