Mr Groschupf's alarming view is not borne out by the current state of the German economy, which in 2016 grew at 1.9 per cent - its fastest pace in five years. The country is an industrial titan and the eurozone's economic powerhouse. Its products, especially its cars, are a byword for quality and high performance. BMW, Audi and Mercedes-Benz account for 80 per cent of the global luxury car market.
Yet there is a big fear gnawing in Germany, stalking its corporate boardrooms and keeping its politicians up at night, that the forces of digitisation could sweep away the country's economic and industrial pre-eminence.
The question urgently being asked is this: as the pillars of German success - its cars and machines - are increasingly mediated by software and digital technologies, could the country's relative weakness in IT become a fatal flaw? Could the traditional industries that Germany dominates, such as chemicals, mechanical engineering and logistics, now face the same kind of disruption seen in music, media and travel? The angst has only intensified with Google's recent forays into cars, energy and robotics, three areas Germany excels in.
The issue clearly exercises Angela Merkel, the country's chancellor. "We have the opportunity for a digital economic miracle," she said at a summit in 2014. "The question is whether or not it will happen in Germany."
Peter Altmaier, her chief of staff, spelt out the dangers at a panel debate in Berlin in November. Would Germany still lead the automobile industry when the world shifts to self-driving, electric cars and software overtakes engines as a vehicle's most important component? "In the future, 50-60 per cent of the value of a car will consist of digital devices and tools, and 20 per cent of batteries," he said. "So if we're not careful, we'll only be responsible for the windows, seats and wheels."
That fear is spreading across the broader auto industry, but it is felt acutely in Germany where the sector is one of the largest employers. Suppliers are affected as much as the vehicle manufacturers. "If you look at all the companies that make car parts - the transmission, gearboxes, clutches, pistons - they're all in a difficult spot right now," says one Frankfurt-based banker. "People don't want to invest in them because they are not sure there will be any demand for these things in future."
Germany is no slouch when it comes to innovation. Its scientists invented aspirin, the electron microscope and the MP3 music format. But its tech sector is nothing like as large as Silicon Valley. Germany's biggest listed tech company is business software group SAP, which was founded 45 years ago. It has one large digital player, the Berlin-based incubator Rocket Internet, which grew by copying ecommerce models in the US and applying them to emerging markets. According to New York-based CB Insights, only four of the world's 174 unicorns - private companies with a valuation of $1bn or more - are German.
As a result, Germany continues to be dominated by stalwarts of the "old economy". A ranking by EY showed that 55 of its 100 top companies by revenue are in industrial sectors such as machine-building, cars, mining, energy and chemicals, and only five in IT. Contrast that with the US, where 20 of the top 100 companies are from IT and media.
Mathieu Meyer, managing partner at EY, finds the dominant role of carmaking troubling, since it is the auto industry that will see the most disruptive change in the next two decades - a process being driven by US and, increasingly, Chinese IT groups.
"There's a lot at stake for Germany," he says. "We rely much too much on the current successes of traditional industrial sectors, but in future-oriented industries we are losing ground."
The potential losses are huge. Roland Berger says Germany faces a decline in industrial value added of €220bn by 2025 if it fails to transform digitally, based on the growing share of IT in value chains, which the consultancy says will rise to 15 per cent in the car industry over the next eight years. "If European companies are unable to stake their claim in this fast-growing market with their own products and solutions, value will be added by new competitors instead," it says.
At issue, experts say, is the German approach to technology. "Germany's great strength is evolutionary, incremental innovations, particularly in the car industry," says Christoph Keese, best-selling author of Silicon Germany. "To make a BMW, you need people who have spent their whole lives doing nothing but power trains or whatever."
Yet the big new digital businesses often emerge at the "intersection points of sectors that previously had nothing to do with each other - like software and biology". The problem, he says, is that in Germany, the sectors do not intersect.
Politicians are aware of the problem. Sigmar Gabriel, deputy chancellor, said in 2015 that the typical approach of a German company was to take a product and try to make it more competitive. That ignored the fact that "platforms are increasingly inserting themselves between the hardware and the customers", he said. The danger is that German-made products could turn into interchangeable commodities, and the companies themselves into mere subcontractors for the platforms.
Germany has tended to respond to these growing risks through regulation, earning the scorn of Silicon Valley. Many of its cities have banned platforms such as the car-hailing app Uber and home-sharing site Airbnb. The government is clamping down on hate speech on Facebook and its companies have lobbied in Brussels for curbs on Google.
Some consider that the wrong policy. "You try to think of all the excesses that are possible and try to regulate them away," says Peter Terium, head of Innogy, Germany's largest energy group. "The US approach is let's first roll out the market, then legislate the excesses that we see and not the ones we can theoretically think of."
German officials still think the country has a chance to lead the next wave of digital innovation, particularly the industrial internet. Ms Merkel speaks frequently of the "fourth industrial revolution", known in Germany as "Industrie 4.0" - a future of networked factories and connected robots deployed in fully automated production.
"This 'internet of things' is beautiful because Silicon Valley has the internet and Germany has the things," says Mr Terium. "You're connecting the virtual world with the physical world, and that's what Germans are very good at."
But the lifeblood of connected factories will be data, and the ability to analyse vast amounts of information could end up playing an even more important role than the automated systems. The big question is whether the data-crunching niche be occupied by German companies or the likes of Google.
One German company that thinks it can harness this opportunity is SAP. It is pitching to be the technological partner of choice for the Mittelstand - the small and medium-sized enterprises that are the backbone of the German economy - as they digitise their businesses.
"We have lots of hidden champions in the Mittelstand with deep, deep domain expertise and the intellectual property in every aspect of their business where they are often world leaders," says Bernd Leukert, SAP's head of products and innovation. But Mittelstand companies are often reluctant to team up with tech groups. "They are used to doing everything on their own - having all the technical competence in-house," he says. But if they think they can digitise on their own, he adds, "they will fail".
The problem for SAP is that companies that are open to partnering with tech groups often look abroad.
Konstantin Guericke, the German-born co-founder of LinkedIn, says his country lacks the "ecosystem" to take advantage of the internet of things. "It has the physical appliances in the home, and the industrial equipment," he says. "But a lot of the brains are in Silicon Valley, so . . . do you set up your own competing brains trust in Germany? Or do you develop partnerships with the US leaders?"
Matthias Wissmann, president of the German car industry body, the VDA, says Germany accounts for 58 per cent of the patents for connected and self-driving vehicles filed since 2010, and that German carmakers plan to invest €16bn-€18bn in digitisation over the next three to four years. Many German cars can already drive themselves for limited periods.
German companies also claim to be at the forefront of the internet of things. Bosch, whose products range from dishwashers and power tools to car parts, is a world leader in sensor technology and plans ultimately to make all of its electronic products web-enabled. At the recent Consumer Electronics Show in Las Vegas it unveiled Mykie ("My Kitchen Elf"), a countertop robot that controls all the connected appliances in the home and can suggest recipes based on the food in your smart fridge.
Yet Bosch faces challenges from the US. One is Amazon's Alexa, the ecommerce giant's intelligent voice assistant, whose technology is being integrated into dozens of home gadgets: the wider plan is clearly for Amazon to own the operating system for voice.
Klaus Hommels, a venture capitalist, says that could threaten a huge spectrum of companies, not only appliance makers like Bosch but also food retailers like Lidl. "If you look at Alexa, it could turn into a hub that not only raises the curtains or lowers the temperature in your house, that plays music or switches on the TV, but also buys your milk and controls whether you order it from Tesco, Aldi or Amazon," he says. "It's the new monopoly-in-waiting."
Ms Merkel caused hoots of laughter in 2013 when she called the internet "Neuland" - new land, or uncharted territory. The internet was already some 20 years old at the time.
Her rhetoric has changed since then. But for Mr Groschupf there is still a lack of urgency in Germany's approach. "Companies are still very afraid of investing in emerging technologies," he says. "They're still sitting in a rowboat while others are flying rockets."
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Copyright The Financial Times Limited 2017
