BERLIN, Nov 4 (Reuters) - High labour and high energy costs and a growing shortage of skilled workers are key potential burdens that could weigh on German industry, Economy Minister Rainer Bruederle said on Thursday.
Bruederle, a senior figure in the pro-business Free Democrats, said Germany must guard against a decline in its competitive position, while warning against government interference in industry.
"The markets will best decide which industries and which products will be successful in the years ahead," he said in a paper on Germany's position as an industrial nation.
The German economy quickly emerged from its deepest post-war recession last year and the government expects 3.4 percent growth in 2010.
Last month Bruederle said workers should reap the benefits of the swift bounceback with generous pay awards. [ID:nDE6960N2]
The paper said German industry has to react quicker and more flexibly to new market developments.
"The innovation climate in Germany is clouded by widespread public scepticism against new technologies," the report said. "Clinging to the status quo is the biggest threat to the hunt for innovations."
The report also renewed warnings against the government placing too much emphasis on environmental issues and green policies that place too heavy a burden on industry. Germany has some of Europe's most ambitious climate protection goals.
"Germany is interested in an affordable and internationally balanced climate protection policies," the report said, advising against pushing forward with climate protection goals that exceed those of its trading partners.
(Reporting by Gernot Heller; writing by Erik Kirschbaum; editing by John Stonestreet)