West and South Germany will remain a protoindustrial economy on par with France and England, so there may be technological butterflies (but not that many since it remains politically divided and landlocked). More importantly, Germany will remain a net exporter of people at a very serious level. Where they will go is an open question. Unless you postulate a total Habsburg victory that turns Germany into a unitary state, colonial ventures are unlikely. Eastern Central Europe, on the other hand, could be in for serious changes. If the Habsburgs can use the greater weight of population and production for their purposes, they could win against the Ottomans earlier and more comprehensively, turning a larger part of the Balkans into German-dominated, Catholic land. Whether Germans would also move into Poland and Russia in larger numbers would depend on politics (is there a Deluge? a Swedish-Russian confrontation? Russian modernisation? Who needs loyal settlers for recently emptied lands?)
Macroeconomically, Germany is still fucked. The country faces inflation that undercuts its traditional mining industry, population pressures on scarce on scarce land, the forcible reintroduction of serfdom in the east and war in the west. It is cut off from most major new trade routes and has no chance of developing a banking centre on par with Genoa, Amsterdam, London or Paris for want of a unitary currency and geographic reach. But it is less fucked than IOTL. More parts of the country have the chance to thrive economically and retain local and regional dominance. The western provinces will not be lost to France (at least, not to the same extent). Germany has a better chance at staying linked into industrial development and profit early from a highly developed machine culture.
Another possible development is that this could strengthen the Netherlands greatly. The country always depended on German manpower for its merchant fleet, military, and colonial ventures. Its inland trade flowed mainly down the Rhine, a dangerous proposition IOTL with France on the left bank and hopelessly fractured uncertainty on the right. A stronger German state or states on the upper Rhine would be a better trading partner. Ultimately, we might see the coal of the Ruhr and the iron of Alsace feed the shipyards of Holland and the factories of Brabant. THat is, of course, assuming that unitary state is not a hostile Habsburg. That would be bad.